China - a trillion-dollar-sized pie?

LinkedIn Twitter Facebook

 

Author: Iain O’Neill, Head of Innovation, wnDirect

China is currently in the forefront of our minds as we countdown to ‘Single’s Day’ which takes place next month. Singles Day, the single consumer’s Valentine’s Day celebrated in China on 11/11, is the world’s biggest online retail event which last year resulted in Chinese consumers spending a whopping $14.3bn, in just one day!

There is absolutely no question that China represents significant opportunities for Western retailers. Not only does it have a colossal population of 1.3 billion, but it is also the world’s largest and fastest growing eCommerce market. Chinese consumers purchased $589.61bn worth of goods online in 2015, a 33.3% increase from a year earlier, according to the National Bureau of Statistics in China. The market is far from mature with online shopping continuing to rise significantly with online spending estimated to reach over one trillion dollars by 2020. As Jack Ma, the Chinese billionaire and co-founder of Chinese eCommerce giant Alibaba put it, ‘in China eCommerce is a way of life’.

 

And it is not just eCommerce that is booming in China…despite Chinese consumers being relatively new to online shopping, and despite the implementation of a new tax on overseas purchases in April this year, Chinese consumers are embracing cross-border eCommerce.

 

According to digital marketing researcher eMarketer, cross-border eCommerce in China will hit $85.76bn this year, up from $57.13bn in 2015 and that by 2020, half of China’s digital shoppers (or more than a quarter of the country’s population of about 1.4 billion) will be buying foreign products online. According to a recent Accenture-Ali Research report, China is expected to drive much of the growth of cross-border eCommerce in coming years.

 

Cross-Border eCommerce in China Singles Day 11.11

 

But why has cross-border shopping become so attractive to Chinese consumers? A number of factors are fueling the cross-border trend. Firstly, product safety incidents and less than stringent government supervision has meant that consumers have developed a lack of trust in domestic brands. This, combined with the fact that they also have a greater exposure to, and knowledge of, foreign products means that they are now going online to seek higher quality and lower priced products from abroad which they deem more trustworthy.

 

Secondly, incomes have risen in China, 70% of consumers are under 35 and the country’s large and growing middle class (which is equal in size to the entire US population and expected to reach 630 million by 2022 according to McKinsey) are hungry for western quality and brand status. Impatient for the latest products and better prices, they can buy directly from foreign retailers and suppliers at the click of a mouse or the swipe of a screen.

 

So taking all of these factors into consideration, along with the impressive statistics and predictions, the significant opportunities which exist for Western retailers in China are crystal clear.

 

Despite these opportunities, there is still a reluctance to enter the region. It is true that China has always been considered a difficult market to enter and there are a number of not insignificant barriers to entry. Yet despite the challenges there are more than enough opportunities to make the effort worthwhile.

 

China has very specific requirements with businesses requiring a Chinese business licence to operate. Coupled with this, the buying habits are very different from what is witnessed elsewhere in the world. It is vital that brands wishing to access the market not only understand this but appreciate the importance. These factors were key when developing our Chinese offering. We quickly realised that we had to develop much more than a delivery service but a mechanism for retailers to operate within this very specific market. In order to do this we decided to develop a partnership with experts in China who could bring this experience and cultural understanding to our logistics services.

 

So, keen for a slice of the trillion dollar sized pie?

 

 

For more information, please consult our China cross-border eCommerce country guide.

LinkedIn Twitter Facebook

Black Friday growing strongly in Brazil

Black Friday growing strongly in Brazil

The phenomenal performance of Black Friday rippled around the world and Brazil was no different with eCommerce Brasil reporting billions in sales. So what are the figures coming out of Brasil on this bargain-hunting shopping day?
eCommerce in Brazil: Going local is key

eCommerce in Brazil: Going local is key

As with anywhere, Brazil has its fair share of problems – but with a population of 200 million, a tech-savvy and consumption-driven middle class and arguably the most internet-connected population in the world, is Brazil seen as a necessary evil for international merchants looking to expand internationally?
Why international e-tailers should re-visit the top of the funnel

Why international e-tailers should re-visit the top of the funnel

The role of brand awareness is increasingly critical to international expansion and with various platforms offering better reach and targeting than ever before, why is it important for international retailers to revisit the top of the funnel to help create a more compelling picture?
Quality of delivery offer important to Dutch shoppers

Quality of delivery offer important to Dutch shoppers

Cross-border eCommerce in Belgium and the Netherlands is making big strides and with a population of 28 million people and combined GDP of €1.08trn and English spoken widely, it’s no wonder it offers an attractive market to international merchants looking to expand into new territories. But does the quality of delivery offered that important to Dutch shoppers?
How to maximise your chances of success in India

How to maximise your chances of success in India

eCommerce is growing at an unprecedented rate in India thanks to a number of factors and with the percentage of online retail sales growing rapidly, what do retailers need to consider in order to maximise their chances of success in India?
What do Russian consumers want when it comes to cross-border shopping?

What do Russian consumers want when it comes to cross-border shopping?

Russia is the 9th biggest country in the world with roughly 30 million online Russian shoppers in 2015 which only continue to grows in 2016. However, with cross-border shopping being the fastest-growing segment of the Russian eCommerce market, what do Russian consumers want when it comes to cross-border shopping?
The importance of understanding what it is to be Russian

The importance of understanding what it is to be Russian

Russia, in terms of internet penetration, did lag behind most other European countries but is rapidly playing catch up. Not surprisingly, eCommerce has increased alongside internet penetration with an estimated 148 million orders generated in 2015. But with so many unknowns surrounding entering the Russian market, what are the golden rules?
What should retailers know about Russian attitudes to parcel deliveries?

What should retailers know about Russian attitudes to parcel deliveries?

Russia offers a potentially attractive market for international merchants, however the market needs careful consideration in order to get it right. Things to take into account include the distinctly different Russian way of thinking, along with the legal rules and political context of the country. So what are the key things retailers need to know?
Retail Pricing in a post-Brexit world

Retail Pricing in a post-Brexit world

Since Brexit, a number of events have taken place which has meant the price of items has significantly dropped in the UK. But what are the affects of the UK leaving the European Union on retail pricing?
Australia extends tax to foreign eCommerce

Australia extends tax to foreign eCommerce

For a number of valid reasons, Australia is still a destination firmly in the minds of any business looking to expand into the APAC region. With an attractive foreign eCommerce tax law favoring companies coming into Australia, what are the big changes coming down the line in 2017?

Contact Us

eCommerce Worldwide
2 Ching Court
49-53 Monmouth St
London
WC2H 9EY

Tel: 0203 696 0980
2016© eCommerce Worldwide

Keep In Touch

powered by Affino

About eCommerce Worldwide

eCommerce Worldwide provides online retailers with all the information, and resources, they need to develop cross-border strategies for entering new markets around the world
Read More