• Home
  • News
  • Retail
  • Online shopping to exceed 1 trillion dollars in China, but retailers are unhappy about sales

Online shopping to exceed 1 trillion dollars in China, but retailers are unhappy about sales

By Marjorie van Elven

loading...

Scroll down to read more

Retail

With 500 million online shoppers, China is estimated to exceed the 1 trillion dollar mark in online sales in 2018. However, only 20 percent of retailers feel confident in their capability to succeed in the Chinese e-commerce market, according to a survey conducted by consulting firms Frost & Sullivan and Azoya Consulting.

The two consulting firms teamed up to survey 1000 Chinese individuals who shop online on a regular basis, in order to understand their purchasing behavior. The firms also talked to 100 international retailers with annual sales over 50 million dollars, to learn about their strategies and challenges regarding China.

"This is the first global report to review the Chinese cross-border e-commerce market from both consumer and retailer perspectives", said Mark Dougan, consulting director for Asia-Pacific at Frost & Sullivan, in a statement.

Chinese online shoppers prefer buying from Japan

72 percent of Chinese online shoppers prefer buying from Japanese websites, as they are perceived to offer quality products and a lower risk of counterfeits, according to the survey. South Korea comes next as the preferred location for purchasing online, favoured by 62 percent of surveyed consumers. While US e-commerce comes third with 55 percent, only 19 percent of the American retailers questioned in the survey feel confident about their ability to crack into the Chinese online market. UK retailers came last, with 23 percent of Chinese shoppers expressing a preference for British online shops.

However, the survey points out that online retailers of all nationalities, including Japan, would like their results to improve in China. Only 37 percent of surveyed retailers feel satisfied with their online sales in China via a global e-commerce vendor. Out of those which have a standalone online store, only 31 percent are happy with their sales. The ones selling through marketplaces like those owned by Alibaba and JD.com were found to be the least satisfied (21 percent).

The study suggests that investing in a standalone online shop is not only a way to escape the margin-eroding commissions and high upfront costs related to those giant marketplaces, but also the best long-term strategy in terms of branding, as word of mouth holds the most influence on consumer behavior in China. 50 percent of surveyed consumers said they buy from online shops that have been recommended by friends and family. Social media comes next, having been mentioned by 32 percent of surveyors.

"To build a brand that Chinese consumers trust, which commands a healthy profit margin and repeat buyers, retailers need to approach customers through multiple touchpoints. The key channel should be within retailers' control, accompanied by supplementary platforms", noted Don Zhao, co-founder of Azoya International.

Fashion is the most popular category for online shopping in China

Setting up a growth strategy in China is of great importance for fashion retailers, especially those that focus on womenswear. 22 percent of surveyors said clothing and accessories are the products they buy the most online, followed by beauty-related products and cosmetics, with 20 percent. The third most popular category is mother and baby products, with 15 percent. These numbers are in line with the survey’s conclusions in regards to gender: on average, Chinese women spend 976 dollars online a year -- 20 percent more than men.

The survey also claims that men and women value different things when online shopping. Fast delivery is the most important factor for male shoppers, while women value the availability of customer support in Chinese. Women are also slightly more likely to shop from a non-Chinese standalone website: 21 percent of women are inclined to buy from such shops, against 18 percent of men.

pictures: pexels

China
Online retail
Online Shopping