Online sales in China are expected to jump from CNY1.84 trillion ($303.3 billion) to CNY4 trillion ($652.9 billion) in 2016-2017, powered mainly by urban multi-channel shoppers and the newly emerging middle class.
The State of E-Commerce in China research report published by published by international research and training group Econsultancy, predicts that within a few years, multi-channel shoppers will make up nearly half of urban China’s consumers.
“This report, a first for the region, examines in detail country-specific industry developments, as well as the many challenges and risks organisations of all shapes and sizes may encounter,” Econsultancy Senior Research Manager, Monica Savut, said. “Taking into consideration that an astounding one in seven Chinese consumers turn to the internet for a purchase every day and more than 60 percent shop weekly, the opportunities for both local and international brands in China are indeed staggering.”
Despite these opportunities and the fact that many Chinese companies use or are planning to use the Internet as a selling tool, the report finds that, in general, multinational companies have been slow to take advantage of this fast-growing channel to reach this vast new market in the last few years.
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The report noted, however, that retailers who want to continue growing in China need to begin focusing on third and fourth-tier cities (such as Changshu, Dandong, Foshan and Yantai), which are likely to become the main focus for China’s retail business development as competition gets tougher in tier one and tier two cities (including Beijing, Shanghai, Nanjing and Dalian).
The report also reveals that the size of the mobile shopping market is expected to reach CNY1 trillion (USD163.2 billion) by the end of 2017. With the shift from PC to mobile as a more dependent device to access the Internet, it’s natural that consumers are rapidly taking up mobile shopping.
“China has a unique landscape which is powered by 302 million online shoppers, where mobile Internet users exceed PC users and where social media usage is one of the key reasons driving eCommerce use in China,” said Burghardt Groeber, Vice President of Greater China, hybris software.
“Its consumers are now more digitally connected, socially networked, and better informed than ever before. They inform themselves, make their own purchases, or get assistance on any channel they choose. As China’s retail world rapidly swings towards multi-channel formats, consumers will expect these interactions to happen seamlessly, with each new interaction personalized in the context of the last one,” he added.
Thus, he recommends that it is essential that local retailers, or those who are looking to gain a foothold in this burgeoning market, ensure that they deliver harmonized, digital and physical experiences to help attract, retain, and grow a profitable customer base.
Date: November 17, 2014