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

Understanding the Current Global eCommerce Localisation Trends

Understanding the Current Global eCommerce Localisation Trends

Localisation has become key to success online and savvy brands and online retailers have adopted innovative approaches to localisation in order to provide the best experience for their target customers while retaining their brand identity and tone of voice in all of the markets that they operate. So how are retailers applying localisation strategies across the world and how are demands shifting?
How to ship with Fulfilled by Amazon

How to ship with Fulfilled by Amazon

If you shop on Amazon, you may often see the term ‘Fulfilled by Amazon’ meaning that you’re buying a good not from Amazon, but from a third party seller. Fulfilled by Amazon, or FBA, selling is where a third party stores their goods in Amazon warehouses, and Amazon then uses them to fulfil listings. But what does it take to sell your goods as Fulfilled by Amazon?
The legal landscape for online retail in Canada

The legal landscape for online retail in Canada

The legal situation around online retail in Canada is complicated by its general devolution from federal to province / territory level. In theory this means 13 different sets of terms and conditions needed. In practice, there is a very high degree of uniformity. This article looks into Canadas legal system from an online retailers position.
Online retail competition in Canada

Online retail competition in Canada

Canadians are amongst the most prolific cross-border eCommerce purchasers in the world - however, something to think about is that more and more local retailers, who previously were poor at eCommerce, are increasingly now getting better at it. This article looks at some of the top retailers in the Canadian eCommerce market to help you understand the competitive landscape there.
The Size of the Canada Retail Market

The Size of the Canada Retail Market

With the presence of US retailers in Canada unsurprising, some may find it hard to believe that not all northward ventures have ended in success. Therefore, you shouldn’t assume that the presence of a US giant means that other cross-border retail efforts would be hopeless. This article looks at the value of the total retail market in Canada and outlines the current competitive landscape there.
Online retail marketing in Canada

Online retail marketing in Canada

With internet and device penetration significant and online browsing behaviour fairly typical of a developed market, the landscape of online marketing looks very familiar to highly connected countries. However, retailers should be aware of the subtle but significant differences between the Canadian and the UK markets. This article looks at use of marketing methods for online retailers in Canada.
Connectivity and online behaviour in Canada

Connectivity and online behaviour in Canada

With typical online behaviour similar to other western counties, the Canadian eCommerce market can be seen as very appealing to cross-border retail. Exploring its sophisticated infrastructure, this article looks at the details of Canadian shoppers’ behaviour online, and examines some of the demographic nuances in internet access, online activity, and device preferences.
Online retail payment methods in Canada

Online retail payment methods in Canada

In different markets, shoppers can have varying preferences when it comes to making payments for orders on eCommerce sites. Canada is no exception but happily, there is more of an opportunity than a challenge when it comes to online retail payment in Canada. This article looks at the online retail payment methods within the Canadian eCommerce market.
Online shopping behaviour in Canada

Online shopping behaviour in Canada

When Canadian Shoppers buy online, how do they go about it, and what do they buy? With the use of mobile growing and the use of various devices for online shopping looking similar to trends in the UK, Canadian eCommerce has been a sleeping giant, but it’s waking up. And quickly. This article looks at the online shopping behaviour of the Canadian eCommerce market.
Online Retail Logistics in Canada

Online Retail Logistics in Canada

How should you go about planning your logistics strategy for servicing the Canadian eCommerce market and what are the options available? Canada is a spectacular 9,306 km from extreme east to extreme west so for any non-Canadian retailer looking for delivery partners to ship into the country, only large players with the scale to cover such a geography are particularly relevant. This article looks at the online retail logistics within Canada and how this impacts its eCommerce market.

Contact Us

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

Tel: 0203 696 0980
2017© 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