Online consumption is growing and numbers for total customer spending is bringing China into lead position.
The Chinese e-commerce market has been topical lately, with reports about China’s growth hot on the heels of the US (current number one in online retail). Reuters has recently published about a Bain & Company report, which says that the total Chinese e-commerce market is predicted to reach 3.3 trillion yuan ($539.07 billion) by 2015 and has grown at an average rate of 71% from 2009-2012 – and will surpass the US.
It has become evident that internet presence is fast becoming a must in China and all offline companies have had to reconsider their positions in the market and their sales strategies. According to Serge Hoffmann, partner at Bain and co-author of the report, “Whether you’re an online player or an offline player, you need to have a meaningful, credible presence on the web.”
There are various contributing factors to the e-commerce advances in China:
*The increasing public access to the internet and ownership of smartphones.
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*The hefty expenses of brick-and mortar retail (including space rental)
*The pressure to compete with large competitive websites like the Alibaba group who’s e-commerce profits have shifted from 500 to 633 million yuan in the first half of 2013.
Despite some teething problems like shipping networks, it seems that the nature of things is evolving and e-commerce is building. Not only is China moving into first place, but it is estimated that in 10 years, 50% of retail consumption will happen online (compared to the current 6%).
Image courtesy of Wiki Commons