The U.S. Department of Commerce recently provided new stats for China’s growing e-commerce market, they make for interesting reading for any company considering marketing to China:
- China ecommerce accounted for around 15.9% of all retail sales in 2015.
- China e-commerce is estimated to grow to 19.6% in 2016.
- 53% of the 688 million internet users in China are online shoppers – more than the combined population of the United States, Russia, and Brazil.
- China has over 1.28 billion mobile phone users which is the preferred method of online shopping.
- E-Commerce sales in China totaled $672.01 billion in 2015, up 42.1% from $449.01 billion in 2014, according to the Chinese government’s National Bureau of Statistics (CNBS).
- By 2019, it is estimated that one out of every three of China’s retail dollars will be spent online, the highest percentage in the world. The estimate for the U.S. is one out of ten.
- 71% of shoppers are in cities; 82.3% are between 25-45; 55% are female.
- Top purchases are: apparel, food, skin care and beauty, and baby/pregnancy care.
Online Market Growth:
Rising disposable incomes, the increasing popularity of ecommerce and in-app purchases, coupled with a rapidly improving internet infrastructure is accelerating China’s online revenue growth potential
Companies are presented with many technical challenges when trying to build a web presence within Mainland China. An infrastructure flawed with inefficiencies, distance and the constant monitoring of the Great Firewall imposes negative impacts on performance of foreign hosted sites trying to reach users in China. Websites hosted in the US or Europe can expect 10+ seconds of latency versus hosting within Mainland China
Chinese online shoppers are willing to spend, but at the same time demand a high level of value and service. They expect to be able to return any item purchased online, and the cash-on-delivery payment method popular in China often results in a higher-than-average return rate. In particular sectors, such as luxury, expectations are especially high. At one luxury marketplace, Chinese shoppers expect 24-hour customer service, free insured two-day shipping, and the option to pay and return at their convenience.”
The majority of China’s 1 billion smartphone users browse for products on their mobile devices, and those with greater incomes search even more than the average on mobile devices driven by a over 60% smartphone penetration rate in China’s Tier-1 and Tier-2 cities
China’s ecommerce growth is majorly fueled by the hyper-social behaviors of it’s online shoppers. Alibaba Group Holding Ltd. owns both Taobao and its B2C online marketplace counterpart, TMall (TMall sells 70,000 Chinese and international brands from 50,000 merchants).
Chinese social network and SinaWeibo, as well as instant messaging turned ecommerce, gaming, and financial services social platform WeChat, are the top two power players bridging any gap there may have been between social media and ecommerce. To get any kind of market penetration in China, international brands must sell on social channels and keep a cyber-eye out to mine for consumer insights.