Download - Prestudy China eCommerce Growth, 27.10.2015
China’s ecommerce
boom opens up for
new opportunities
INNOVATION BUSINESS ACCELERATOR
ERIC CHENG, [email protected]
OCTOBER 22, 2015
China ecommerce Market Overview
Despite a macroeconomic slowdown in China,
online consumer spending is growing at close to
50 %, particularly in fast-growing second and
third-tier cities.
The Chinese Government is supportive of
ecommerce as it’s in line with their long-held
policy aim of driving domestic consumption.
China has around 417 million online consumers.
According to China’s National Bureau of Statistic,
China online shopping accounts for about 10.7 %of total retail sales of consumer goods.
According to eMarketer ecommerce will
account for nearly 30 % of all retail sales in 2018.
$472,91
$672,01
$911,25
$1 208,31
$1 568,39
0,00%
10,00%
20,00%
30,00%
40,00%
50,00%
60,00%
0
200
400
600
800
1000
1200
1400
1600
1800
Y 2014 Y 2015 Y 2016 Y 2017 Y 2018
Billio
n U
SD
Year
Retail ecommerce sales in China 2014-2018
Retail eCommerce
Sales
% Change
% of total retail sales
Ecommerce Market – Two Main
Players control 80 % of the Market
Around 90 % of the online retail transactions in China occur on
marketplaces – including Taobao, TMall – where
manufacturers, retailers and
individuals list products to sell
to consumers.
Alibaba’s Tmall holds the
largest market share with more
than 60 % of retail ecommerce
sales in 2014. Alibaba has an
even more commanding share
of mobile retail ecommerce
and C2C sales, at over 85 %.
61,40%
18,60%
3,20%
2,90%
1,70%
1,40%
1,30%
1,30%
1,10%
0,70%
6,50%
0% 10% 20% 30% 40% 50% 60% 70%
Tmall
JD.com
Suning
vip.com
Gome
Yihaodian
Dangdang
Amazon.cn
Yixun
Jumei
Other
B2C Retail E-commerce Sales Share in China, by Site, 2014
Ecommerce Trends & Developments
MOBILE
BRICK AND MORTAR ARE
TURNING INTO “PRODUCT
SHOW ROOM”
GROWTH IN RURAL AREAS
THE RISE OF CROSS-BORDER
ECOMMERCE
FROM C2C
TO B2C
Connected Consumers – Drivers
According to Nielsen research, the typical online buyer of imported products in China is
female, younger than 30 and with an income of more than RMB 11,000 per month.
Frequently cited reasons for shopping online include:
Accessibility
Convenience
Low prices
Greater assortment
Detailed product information & customer reviews
Confidence: consumers place higher levels of trust in the authenticity of purchases
made on major B2C platforms such as Tmall, JD.com and Yihaodian
Cross-Border ecommerce
International ecommerce is called cross-border ecommerce.
Cross-border retail ecommerce has grown in recent years as the number of channels, payment methods and offerings has improved.
There are 18 million online cross-border shoppers in China, 78 % are cross-border mobile shoppers.
Chinese cross-border shoppers spent RMB 216 billion in 2013 – with up to 35.9 million expected to spend up to RMB1.0 trillion a year by 2018.
Top 5 cross-border purchase categories over the past 12 months are Clothes, shoes and accessories (RMB 22.0 billion) Health and beauty products (RMB 17.6 billion) Computer hardware (RMB 13.5 billion)
Jewelry, gems and watches (RMB 13.1 billion) Personal electronics (RMB 12.9 billion)
Cross-border online shoppers’ top shopping destinations: US (84 %), Hong Kong (58 %), Japan (52 %), UK (43 %), Australia (39 %).
Ecommerce Search Engines
The top 3 search engines are
Baidu, 360 and Sogou. Google,
Bing and Yahoo, together with
other small Chinese search
engines only total to of 2.03 %
of the entire search engine
market.
Baidu is often compared with
Google but actually operates
differently.
Ecommerce Marketplace vs Brand Store
Marketplace store (Tmall, JD)
90 % of all sales
50 % of the brand’s SKUs (mainly bestsellers)
Heavy marketing
Needs a perfect quality of service (chat function, etc)
Sales are public
Volume driven
Enclosed world –the marketplace owns the customers and the data
Vague search results on Baidu
Brand store (.cn store)
10 % of all sales (some brands have less than 1 % sale on their own website)
Full assortment of SKUs
Branding
History
Values
E-magazine
Shop locator
OmniChannel
eCRM
Digital marketing in China is dominated
by local players
Tmall
Taobao
Baidu
Alipay
Wechat / Weibo
Youku / Tudou
Amazon
eBay
Paypal
Facebook / Twitter
Youtube
Future Trends & Market Demand
Aspirational trading up
Chinese buyers continuously look for products that:
have strong brand heritage outside of China
replace local brands that are not trusted (particularly if the end user is
an infant or is elderly)
are innovative and novel
are lifestyle products (e.g. healthcare, vitamins and education)
are ‘natural’ alternatives to artificial products.
Summary
Despite a macroeconomic slowdown in China, online consumer spending is growing at close
to 50 % a year, particularly in fast-growing second and third-tier cities.
Mobile is the most commonly used device for making online purchases.
Apparel is the most popular and widely purchased product. Packaged foods are the most
frequent products people purchase online.
Some18 million Chinese are already paying premium prices for foreign products like food,
cosmetics and luxury items. These are directly imported through ‘cross- border’ ecommerce
trading platforms in seven cities.
The reduced import taxes and simpler quarantine and inspection procedures within these B2C
cross-border channels presents new entry channels and opportunities to Finnish companies.
Digital marketing in China is dominated by local players.
China’s online consumers will continue to trade up and look for specialized imported products.