China’s ecommerce
boom opens up for
new opportunities
INNOVATION BUSINESS ACCELERATOR
ERIC CHENG, ERICC@INNOVBA.COM
OCTOBE...
China ecommerce Market Overview
 Despite a macroeconomic slowdown in China,
online consumer spending is growing at close ...
Ecommerce Market – Two Main
Players control 80 % of the Market
 Around 90 % of the online retail
transactions in China oc...
Ecommerce Trends & Developments
MOBILE
BRICK AND
MORTAR ARE
TURNING INTO
“PRODUCT
SHOW ROOM”
GROWTH IN
RURAL AREAS
THE RIS...
Connected Consumers – Drivers
 According to Nielsen research, the typical online buyer of imported products in China is
f...
Connected Consumers –Product
Categories
Connected Consumers – Information
Channels
Cross-Border ecommerce
 International ecommerce is called cross-border ecommerce.
 Cross-border retail ecommerce has gro...
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 ...
Ecommerce Marketplace vs Brand Store
Marketplace store (Tmall, JD)
 90 % of all sales
 50 % of the brand’s SKUs (mainly
...
Digital marketing in China is dominated
by local players
Tmall
Taobao
Baidu
Alipay
Wechat / Weibo
Youku / Tudou
Amazon
eBa...
Future Trends & Market Demand
 Aspirational trading up
 Chinese buyers continuously look for products that:
 have stron...
Summary
 Despite a macroeconomic slowdown in China, online consumer spending is growing at close
to 50 % a year, particul...
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Prestudy China eCommerce Growth, 27.10.2015

Prestudy China eCommerce Growth, 27.10.2015
Published on: Mar 4, 2016
Published in: Business      
Source: www.slideshare.net


Transcripts - Prestudy China eCommerce Growth, 27.10.2015

  • 1. China’s ecommerce boom opens up for new opportunities INNOVATION BUSINESS ACCELERATOR ERIC CHENG, ERICC@INNOVBA.COM OCTOBER 22, 2015
  • 2. 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 BillionUSD Year Retail ecommerce sales in China 2014-2018 Retail eCommerce Sales % Change % of total retail sales
  • 3. 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
  • 4. 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
  • 5. 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
  • 6. Connected Consumers –Product Categories
  • 7. Connected Consumers – Information Channels
  • 8. 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 %).
  • 9. Cross-Border vs Ordinary Trade
  • 10. 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.
  • 11. 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
  • 12. Digital marketing in China is dominated by local players Tmall Taobao Baidu Alipay Wechat / Weibo Youku / Tudou Amazon eBay Google Paypal Facebook / Twitter Youtube
  • 13. 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.
  • 14. 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.

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