Prestudy China eCommerce Growth, 27.10.2015
Prestudy China eCommerce Growth, 27.10.2015
Published on: Mar 4, 2016
Transcripts - Prestudy China eCommerce Growth, 27.10.2015
boom opens up for
INNOVATION BUSINESS ACCELERATOR
ERIC CHENG, ERICC@INNOVBA.COM
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
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.
Y 2014 Y 2015 Y 2016 Y 2017 Y 2018
Retail ecommerce sales in China 2014-2018
% 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
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 %.
0% 10% 20% 30% 40% 50% 60% 70%
B2C Retail E-commerce Sales Share in China, by Site, 2014
Ecommerce Trends & Developments
THE RISE OF
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:
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
Connected Consumers –Product
Connected Consumers – Information
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 %).
Cross-Border vs Ordinary Trade
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
Baidu is often compared with
Google but actually operates
Ecommerce Marketplace vs Brand Store
Marketplace store (Tmall, JD)
90 % of all sales
50 % of the brand’s SKUs (mainly
Needs a perfect quality of service
(chat function, etc)
Sales are public
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
Full assortment of SKUs
Digital marketing in China is dominated
by local players
Wechat / Weibo
Youku / Tudou
Facebook / Twitter
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.
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.