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.

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.

 

 

B2W

The E-commerce Subscription Model in China

Subscription based e-commerce platforms are a growing phenomenon in China. As cities become increasingly polluted and congested more Chinese consumers generally turn to online shopping. When you consider the size and scale of China it is unsurprising that the convenient online, subscription model is proving to be a success. 50% of the Chinese now have access to the internet with over 600 million potential online customers to target.

One company making waves in China with this subscription model is the ‘French Cellar’. For a monthly subscription fee they deliver premium, bio-dynamic, French wines selected by “Nicolas Rebut”, a prestigious sommelier, directly to the customer’s door.

In a nation where fake products are rife, the Chinese consumer wants to guarantee authenticity and quality. Therein lies the key appeal of a subscription model, the consumer can trust the quality and over time becomes loyal to the brand. It is also convenient as the selection is made by an expert, (China is renowned for many things but high quality wine is not one of them), and affluent consumers now expect the best from outside of the orient.

The whole process becomes more exciting and a surprise for the customer with lesser known yet prestigious wines being showcased. The concept has also proved popular in other Asian markets such as Singapore. In China the consumer is especially concerned with ‘keeping face’, they wish to present themselves in a positive light with greater specialization, quality and variety reflecting positively on the customer themselves.

This subscription model approach for high quality, niche, European products (that are a rarity in China) is set to become increasingly popular. This is potentially a very lucrative market for selling western products in the middle kingdom. Online shopping is in vogue in here with variations such as the monthly subscription becoming attractive to the wealth of middle/upper class Chinese consumers whom are more interested than ever in western cultures, in this case the refined wines that nations such as France produce.

Benji has lived and worked in Shanghai, China for 5 years and specializes in E-commerce in China. For more information see his website here.

Chinese E-Commerce Giant Alibaba’s Shopping Festival Breaks Online Sales Record.

Chinese E-Commerce Marketplace Alibaba Records $5.78 Billion in Sales, Topping Last Year’s Sales in Half a Day.

The country’s biggest online shopping day of the year, also the biggest on the planet, have set another record.

After only about half a day, Alibaba Group Holding Ltd. said sales on its online shopping sites had topped $3.1 billion – last year’s total for the one day 11.11 Shopping Festival.

The company recorded 35.19 billion yuan ($5.78 billion) in transactions by the end of the day. Chinese online shoppers spent more in 24 hours than the $2.5 billion that Americans spent online on Black Friday and Cyber Monday combined. This is a strong reminder of how lucrative the e-commerce market in China is, surpassing the US in terms of consumer numbers and total spending. In the first six minutes of the 11.11 shopping festival transactions exceeded an incredible one billion Yuan.

The Alibaba Nov. 11 sale is a tradition which started in 2009, when 27 merchants on the company’s Tmall site offered discounts to increase sales during a usually slow period. The concept was then subsequently developed and intelligently marketed alongside China’s ‘singles day’, a celebration of independence, now defined (in part) through one’s purchases at discounted prices.

This year’s sales record demonstrates the rising power of the Chinese consumer and the increasing presence of e-commerce in a country where the physical, retail infrastructure isn’t as well-developed as it is in the U.S. It also shows the rising power of Chinese brands, with smartphone maker Xiaomi Inc. and electronics and appliances supplier Haier Electronics Group Co among the top sellers.

In the opening three minutes, Xiaomi said it sold 110,000 of its new Mi 3 phone and another 110,000 of its Hongmi phone, totaling 178 million yuan in transactions. After half an hour, the company’s Tmall store had 300 million yuan in transactions. Chinese brands such as Xiaomi are flexing their muscles with sales figures such as this. This also demonstrates that China is no longer simply a factory for the rest of the world but a rapidly developing country that is modernizing at a head spinning pace. This whole venture was engineered and executed by a Chinese e-commerce firm with domestic, Chinese technology brands thriving.

As a direct result of such Chinese sales figures the number of expats and business people learning Mandarin is also dramatically increasing, an understanding of the language has become a pre-requisite to succeed in E-commerce here. Language specialists ‘Tailor Made Chinese’ have stressed that it is ‘vital for expats to learn and speak Chinese to succeed in business’.

Examples such as this reflect the vast potential for Western brands in China, for more information on marketing and expanding your business into China see Benji Lamb’s marketing website and blog.

10 important tips for e-commerce platforms on Baidu marketing in China

Understand Baidu

Baidu is the largest and the most dominant search engine in China. The influence of Baidu on the Chinese digital market is unprecedented. If you want to enter the Chinese market it is vital for any e-commerce platform to have a strong presence here.

Baidu is not simply the “Google of China”

If you want your e-commerce sit to be present on Baidu, you have to understand how it is works.  Baidu cannot in reality be compared to Google as it uses different searching algorithms and different systems. For example if you want to book a movie ticket on Baidu, you can even choose the specific seat, which you cannot do on Google. These additional services have contributed to the Chinese giant’s success.

More than a search engine

Baidu is offering multiple services including; “Baidu Baike” (akin to Wikipedia), Baidu Maps, Baidu Yi (a Chinese mobile platform) and ‘Baidu Tieba’  a popular social community where content is ranked, the higher the rating the more that content is shared and seen by the community (much like on Reddit).

Ad Space

Baidu TV is an established search engine advertising space for companies wanting to post their promotional videos on selected websites.

From PC to mobile

Baidu has expanded its market from PC to the mobile device by offering a wide range of functions and digital services on the smart phone.

There is certainly big potential for expansion in m-commerce.

Baidu’s display

On Baidu, there is an interesting way to promote a brand. Baidu attracts more customers by offering a creative display for brands with pictures, videos, and interactive content. For example if you search for cosmetic brands such as L’Oreal you will find pictures of many featured products alongside the usual search results on the first page.

Chinese domain

Baidu is a website that is hosted locally so it can be wise for companies to have a local domain with .cn. This way, it will be easier to rank highly on Baidu and to generate more traffic in China.

Chinese keywords

If you have a Chinese version website, it would be interesting to use Chinese keywords in your SEO strategy. You can easily translate the keywords that you have in Chinese.

Content

Be careful about the content on your website. If you share or feature content that is deemed to be inappropriate by the Chinese government, your website might be taken down or restricted from Baidu.

Avoid JavaScript and Flash

Baidu cannot interpret your JavaScript pages, you should use alternatives or non JavaScript pages for your website. The same goes for flash, Baidu cannot feature your flash contents, so better avoid it.

Benji is a digital marketing specialist based in Shanghai, China. For more information see his marketing website and blog here.