China to overtake US as the world’s largest retail market this year

New York-based eMarketer reported that annual mainland spending is forecast to grow 13.3pc to US $4.886 trillion. This will overtake the United States’ at US $4.823 trillion.

The Chinese mainland is home to the worlds largest e-commerce market and this year is set to become the largest retail market in the world. This news comes two years earlier than expected by initial forecasts but the huge uptake of e-commerce in the mysterious orient has been unprecedented. This is especially so now as smaller, lower tier cities have become increasingly connected with better internet connection nationwide and an improving infrastructure for the delivery of goods. Aliababa the Chinese internet behemoth now have the largest, most developed delivery network in the world across the China. From first tier to fifth tier cities.

Monica Beart, the forecasting director at eMarketer, said e-commerce will continue to anchor overall retail growth on the mainland in conjunction of the expansion of its middle class, deeper mobile and internet penetration, and improvement in logistics and infrastructure.

This is all part of the overall trend whereby China is gradually switching from a manufacturing based economy to a service based economy. Currently the combination of the two is proving to be an effective one.

The eMarketer data showed the gap between the overall retail spending in China and the US to significantly widen by 2020. Total retail sales on the mainland that year would hit US$7.086 trillion, compared with US$5.476 trillion in the US.“China will continue to see massive gains in retail e-commerce over the next few years, with sales topping US$2.416 trillion in 2020,” Beart said.

Recent data from iResearch showed that Tmall.com, the main online shopping platform of Alibaba Group, dominated with 58 per cent of China’s business-to-consumer e-commerce market last year. Jd.com which is backed by other digital giants Tencent held a 26% marketshare.

With the market showing continual signs of growth it is a crucial time for western firms to move into this lucrative market. There are a number of difficulties for western companies with different laws and regulations, customs policies and a whole different internet landscape to navigate. It is important to utilize Chinese connections and expertise in this area in order to expand effectively into the middle kingdom.

Growing markets to invest in currently include cosmetics, fashion and e-tourism. This fast paced digital landscape is certainly one of the most fascinating and lucrative in the world but firms need help navigating what can often seem like an alien world in China.

Benji is a marketing and e-commerce expert based in Shanghai. For more information see his blog and website here.

Jet.com and Ecommerce Exits

Quartz has put together a nice piece on the Jet.com exit to Walmart. Most interesting is the chart of Ecommerce Exits since 2009:

I’d take a guess that none of these companies were profitable at exit and all of them would have been extremely fast growing. In exiting to the likes of Walmart, Liberty, Alibaba, Unilever, Richemont etc it’s once again underlined how difficult it is to take an ecom company public.

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Mars and Alibaba Group Launch Global Business Partnership

Elevating the Online Shopping Experience 

Mars Inc. one of the world’s largest food manufacturers recently announced an innovative strategic business partnership with the Alibaba Group, the world’s largest online and mobile e-commerce giant. Leveraging Alibaba’s comprehensive ecosystem, Mars are seeking to establish an integrated online and offline business model to more effectively serve their hundreds of millions of consumers in China.

A “One-Stop” Shopping Experience

Consumers will be able to enjoy a more convenient and international “one-stop” shopping experience. For the first time, all of Mars’ brands in China will be available online to consumers in its various Tmall flagship stores and to rural consumers through Taobao.No other e-commerce platform has the developed infrastructure in China that Alibaba can now boast. Mars seek to leverage Alibaba’s marketing services, physical infrastructure, mobile reach, big data and consumer insights in order to improve their engagement with consumers. This move is indicative of the continued growth of the e-commerce sector in the middle kingdom.

 

Before forming this official partnership, many Mars brands have already proved to be successful on Tmall. In April this year, Snickers and TFBoys, a popular boy band in China, worked together on a marketing campaign. In merely three days, they achieved almost the whole year’s sales of 2015. Based on targeted advertising with Alibaba’s big data analysis, the campaign enabled Mars to achieve an ROI which far surpassed the average of other brand campaigns in the ‘snack’ category on Tmall.

Enhancing E-Commerce Food Safety

Mars and Alibaba are partnering to create an e-commerce food safety program that benefits consumers and the broader consumer goods industry, through a collaboration with the Mars’ Global Food Safety Center (GFSC) in China.

Jet Jing, Vice President of Alibaba was very positive about this development; “Alibaba and Mars share a common commitment to improving safety standards, quality monitoring, and consumer awareness in China. With our combined strengths and resources, we are confident that we can elevate China’s consumption model in the era of big data, and deliver greater economic and social benefits to all stakeholders.”

China’s younger generation has become the driving force behind this unprecedented e-consumption. They now rely on e-commerce in hectic, modern China and place great value on the trustworthiness of the companies behind their brands and products. Mars meet their expectations by prioritizing product quality alongside their efforts to improve industry standards.

It is vital to engage with China in more developed ways, growing platforms such as Lendalocal are making it increasingly easy to connect with local Chinese translators and specialists in a whole host of different fields.

Benji is a specialist in e-commerce and digital marketing in China, for more information see his website and blog here.

 

 

Yup, Ecommerce is Hard

WSJ reports Walmart is in talks with Jet.com, the barely one year old ecommerce startup:

For Jet, a takeover by an old-line retailer would demonstrate the challenges of attempting to go it alone in the hypercompetitive e-commerce market.

This business is capital intensive, heavily reliant on brand and a massive slice of luck..

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