5 key players of the e-commerce market in ChinaComments Off
E-commerce is about to reach 10% at the end of commerce market in China this year. It has easily become the largest online market place in the world since it China’s online B2C exceeded the American one in 2012. The online B2C is indeed the more important part of the market in China.
Here are the most successful players of the e-commerce in China:
The e-commerce in China is clearly dominated by the Alibaba group. It was founded in 1999 by Jack Ma, the original website of Alibaba offered a B2B platform for Chinese companies. Alibaba owned a 44.82% market share in the B2B online market in Q2 2014.
Over the years, several websites and services were created to meet the needs of the Chinese citizens online.
The group therefore created Taobao, a C2C website in 2003 which benefited from an enormous success among the online Chinese shoppers. Mostly because the website adapted to the Chinese way of shopping. Taobao therefore allowed its customers to bargain online and to pay only after they had received and inspected the quality of the goods they ordered.
A B2C website came in 2008: Tmall, which owed a 57, 36% market share of the Chinese B2C online retail market in Q2 2014. The B2C platform allows local Chinese and international businesses to sell quality, branded goods to consumers in mainland China.
The Alibaba group also created its own payment system, Alipay, in 2004. The group is owned by Yahoo at 40% since the American internet giant helped them develop in the mid-2000s by investing one billion dollars in Alibaba in exchange for a 40% stake in the company. A good bet since Alibaba is now famous all over China.
As for this B2C retailer, it was created in 1998 in Beijing under the name of 360buy.com, which changed last year in JingDong. It was ranked second largest player of the Chinese B2C online retail market with a 21.22% market share in Q2 2014. The e-tailer offers to its 60 million registered users a range of 12 categories of products from home appliances to clothing. In 2013 more than 500 000 orders were placed on the website every day. Chinese online shoppers like this website because it is like a wholesaler, they can address directly to JingDong if a problem occurs. Which differs from Tmall where sellers are all individual companies.
In March this year, the e-tailer signed a partnership with Tencent, to allow users on both platforms to transit from one to the other directly allowing JingDong to enter the mobile market more easily.JingDong also owns a C2C platform called PaiPai.com that is currently planning to launch a mobile app enabling individuals merchants to create micro-shops directly from their smartphones.
The company based in Shanghai and created in 2008 quickly became one of the top online retailers of the country. The company developed quickly thanks to an always larger range of product classes.This rapid growth was made possible thanks to an agreement reached with Wal- Mart in 2011. The American distributor agreed to invest in the development of the Chinese online retailer against a 51% stake. Yihaodian since managed to build a base of more than 60 million customers. Those e-shoppers placed an average of 300,000 to 400,000 orders per day in 2014.
Apart from the affordable prices and the large range of products offered, the e-tailer is also popular thanks to the speed of its deliveries that is guaranteed within an hour in Shanghai. Its efficient customer service is also very appreciated by the shoppers.
Chinese e-commerce is therefore largely dominated by B2C websites such as Tmall, JingDong and Yihaodian but most of them also have C2C platforms of their own to play on the two branchs of the market. More rarely some have B2B websites like Alibaba, the market’s leader that is number one on every branch that e-commerce has to offer. Recently another battlefield has open for the different players of e-commerce to have fierce competition on: m-commerce. M-commerce indeed went from inexistent in 2009 to 10% of the e-commerce in 2013 and experts said it will reach 20% by 2016. The major players of e-commerce therefore have to adapt their strategies to this channel.
To go further:
The next evolutionary step for e-commerce in China is e-mobileComments Off
The day the e-commerce will go mobile
When the e-commerce industry in Western countries is becoming mature, in China, it is a huge market that has a lot of untapped potential! The opportunity of having a 600 million clients visibility is attracting businesses from all over the world so why not you ?
Maybe some numbers will help: in 2013, it is 618 million Chinese that were using Internet with a penetration rate of 46% of and it is not even half of the population. Within this population, 300 million of them were already shopping on-line last year.
Who is controlling the Chinese Internet?
The three giants on the Chinese Internet are well known in the Industry : Baidu (the favorite search engine of Chinese), Tencent (which owns WeChat and SnapChat) and Alibaba (which owns Weibo and Tango). They all have a net profit of at least 1,465 billion euros and enjoy a growth of sales and turn over very advantageous.
A huge potential in the B2C Market 2013
If Internet used to be the place where customers were making business with customers the trend is now turning around. In 2010, only 13.7% of transactions were from Business to Customer. And the Customer to Customer type of transactions ruled 86.3% of the Internet. Now, B2C represent 35.1% of the market and this is far from over. In 2017, experts expect that they will be more B2C transactions (52.4%) than C2C transactions (47.6%).
The opportunity of smart phone on e-commerce
In 2013, if the Internet users were 618 million, the mobile Internet users were already 500 million. The penetration on this sector has a 83% growth! It is the highest of the world(followed by South Africa and Hong Kong). Concerning tablet, it is the first one in the world as well with 39% (followed by Mexico and Singapore). What does that mean? It means Chinese will more likely buy through their Smart phone that any other nationality.
Indeed, there are already 69% of Chinese that bought a product on their mobile compared to 46% of American. China passed the hurdle mid 2013. By this time, more people were shopping through their smartphone (81%) than their computer (70%). On Double 11, which is on Nov 11 nicknamed Bachelor’s Day by Chinese, 127 million consumers spent 650 billion euros on Taobao Mobile. It is 560% more than in 2012 and convered 21% of all Taobao’s transactions. This website is one of the favorite of Chinese, 2/3rd of netizens (400 million) used it in 2013.
The mobile shopping market in China has showed incredible growth and opportunity. In 2011, it generated “only” 1.37 billion euros transactions, in 2012, already 7.44 billion euros and in 2013 almost 20 billion euros. In 3 years, this sector has experienced a huge boom and by 2017, transactions should reach 117 billion euros. How come ? Thanks to the new means of mobile payment, the penetration of smartphones in the countryside, the increase of the 3G coverage and the WIFI hotspots and the Offline to Online tools.
Who will be smart enough to catch this wave though ? Taobao Mobile already has 81.45% of the market share and Jingdong Mobile 6.67% but trend can still change.
What are the trends expected in the future?
In addition, the forecasts are all very optimistic when it comes to the evolution of this sector. In 2012, the total transaction value was equal to 354 billion euros and in 2013 over 218 billion euros. With a 40% growth, from one year to another, the sector should expect to reach 488 billion euros transaction by 2017. It is the biggest on-line e-commerce market in the world. Experts predict that by 2020, it will be bigger than the e-commerce of USA, Great Britain, Germany, France and Japan combined.
The trend of online supermarketsComments Off
The trend of online supermarkets
With the apparition of Internet, we saw new ways of consumption via the e-commerce. Indeed, now on the Internet you can buy pretty much everything such as books, music, movies, clothes etc.
One sector rather forgotten is the food. Maybe because people get used to go to supermarkets to find products they want. But recently big brands of retailing and new actors open grocery stores online. It’s a new way for them to make business.
5 facts to know about online grocery shopping:
1. Consumers don’t hate online grocery shopping, it’s just that they need time to getting used to it. The success factor is to provide a good user experience, with a nice navigation, an easy search and online help for example. You have to show to you customer that it’s a time-saving experience.
2. The online and offline baskets are different. For example, when you analyze the repartition of goods between online and offline, you notice that is much larger for F&B (food and beverages) with $80 online and $30 offline and for health and beauty purchase with $30 online and $10 offline. Generally, you see a greater mix of products with online shopping.
3. The purchase behaviors and the consumer perceptions are really different if you compare online and offline shopping. Indeed, the experience when you walked into a supermarket and when you surf on the Web. Online, you have to have a guideline to help you make your shopping easy, because generally on the website there are a lot of different options.
4. When you talk about online, all the rules are new. Indeed, it does not matter if you are a big brand physically because everything is different online, the codes, the habits etc. It is thus interesting for small players to try to modify the “game” online.
5. One key success factor online for small and large brands is to make combination online and offline and to provide the best user experience as possible. For example you have to be interactive by using smartphone applications or social media connections.
3 examples of online supermarket in 3 different countries
India: Aaram Shop
AaramShop is an Indian online start-up which has pioneered the concept of hybrid e-commerce. AaramShop is a hybrid online retail platform that enables small independent retailers to get a web-front to their physical store. The company allows customers to provide at local neighborhood stores (kirana); it means grocery shopping, via the Internet. AaramShop links e-retailers with their final customers by shop on web and mobile devices.
The company was founded by Vijay Singh in 2011. Originally serving 162 local shops in Delhi, over 1,900 retailers across 26 cities in India, use AaramShop as their e-commerce platform this year.
How does it work?
Customers use AaramShop’s website or log on using their Facebook or other accounts and create a shopping list or groceries for the products and brands they want to buy. Then, they can choose their nearby kirana from the listing and specify their preferred delivery time. Finally, the company use SMS and e-mail to direct the order to kirana about the order and the time of home delivery.
Visit the store
France : Carrefour
The global strategy of the group of hypermarkets Carrefour is currently turning around the web portal CarrefourOnline. Since 2008, the e-commerce strategy of Carrefour focus on e-commerce as a way to increase sales because many customers use cyber markets to compare brands and prices and buy on- line then get delivered. Carrefour top management decided to focus on e-commerce as 19% of French customers purchase on-line in 2013.
The retail website of Carrefour, CarrefourOnline, was launched in 2008. It was previously named Bookstore. The web portal was created by e-merchant, subsidiary of Pixmania Company. In 2012, the website registered 1.5 million unique visitors a month, which is 50 to 60% more than the year before, for a turnover increasing by more than 50%.
The website offers a certain number of shops, among them beggaries products, fitness, nursery, toys, sports and leisure activities, garden and open air, house and office, electronics and household electrical appliances. CarrefourOnline proposes 8,300 on-line references and specializes around high-tech products.
More information on the website
China : Epermarket
Based on the fact that it’s sometimes really hard to find products from other countries for expatriates, Epermarket which was founded in 2011 launched an online supermarket in Shanghai.
The website is in four languages (German, English, French and Chinese) and provide more than 2000 different products for everybody. Indeed, you can find snacks, fruits, vegetables, seafood, meat, wines etc. It’s a win-win situation because the expats community can appreciate all the food that they missed and this is the occasion for chinese people to discover new kind of food.
Their goal is to provide reasonable prices. They also focused on high quality products with an effective warehouse management system for the conservation and the delivery of the products.
From their side, everything is made in order to facilitate your online shopping and enjoy the food that you like.
Discover this online supermarket in Shanghai
The Chinese e-commerce market go over $190 billion in 2012Comments Off
The CNNIC (China Internet Network Information Center) has recently published the figures for the e-commerce in China in 2012 and they are very massive. In transactions, the CNNIC announce that the Chinese e-commerce market has reach 1,2 trillion RMB that is to say 190 billion of dollars over the course of the year. It’s so huge because it represents more than 1000 billions of RMB.
The organism also remind that there is 242 millions e-shoppers in China for the year 2012. It’s a big number but the population of China is around 1,4 billion people so there is a significant potential of growth in the next years especially if the economy of China is still growing.
What are Chinese buying ?
When you look precisely what is bought on Internet, the most common items are cloths (this include shoes and hat also) with 81,8% of people who bought at least one clothing item. The daily necessities follow with 31,6%. And the third of the podium are the computers and other digital electronics with 29,6%.
Mobile: a growing trend
Another interesting trend is that 40,7% of e-commerce users are using a smartphone to access the e-commerce websites. In addition with this number, 53,6% are using an app connected to an e-commerce platform (Taobao, Tmall etc.). This is a significant increase compare to 2011.
EBay Cross-border Trades(0)
“Over time, we will look for opportunities to partner or joint venture or work together with Chinese companies,” Donahoe, 50, said in an interview in Hangzhou, China. “We’ve, in essence, exited the domestic market.”
Source : Konaxis
Alibaba Buy Auctiva(0)
The Chinese company said it has entered into an agreement to buy Auctiva, which provides listing and marketing tools to vendors on e-commerce websites like eBay.
Source : Konaxis
Alibaba.com Eyeing Acquisitions(0)
However, Wei declined to give details on acquisition targets for his company, which is the listed unit of Alibaba Group, but said “the priority will be to further boost AliExpress.com.”
AliExpress, which Alibaba formally launched in April after a beta period, is a U.S.-focused online wholesale platform in which Alibaba has said it plans to invest $100 million.
As part of that investment, Alibaba already announced its first U.S. acquisition in June with plans to buy Vendio Services Inc., which helps merchants sell goods on sites such as Amazon.com Inc. and eBay Inc.
Alibaba in April also said it would start accepting payments from users of eBay’s PayPal service on AliExpress. Alibaba plans to enable more payment platforms on AliExpress to ensure payment troubles don’t deter users, Wei said, declining to give details on possible partnerships.
The U.S., India and Japan remain Alibaba’s highest-priority overseas markets, but for the next three years Alibaba will focus on investment in those areas before seeking more benefits from them later, Wei said.
Source : Konaxis
QFIIs to Trade Futures(0)
China started futures trading in April, allowing domestic investors to profit from declines in equities for the first time. The CSI 300 Index, which tracks the 300 most liquid stocks on the Shanghai and Shenzhen stock exchanges, is the underlying index for the futures.
China?s securities regulator allows selected overseas investors to invest in the nation?s stock markets under the qualified foreign institutional investor, or QFII, program.
Currently, 89 qualified overseas institutional investors received $17.72 billion in quotas as of the end of June, the China Securities Journal reported.
Futures, or agreements to buy or sell the CSI 300 Index at a preset value, began trading on the China Financial Futures Exchange in Shanghai on April 16, while margin trading and short selling was introduced March 31.
Each transaction by overseas investors needs to be approved by the China Financial Futures Exchange, according to Monday?s report. Relevant rules will be released recently for public comment, the Beijing-based newspaper said.
Source : Konaxis
Lekutian Baidu Rakuten joint venture will hold massive merchants recruitment(0)
According to lekutian webpage, recruitment started from July 29, and last until August 24. Lekutian web will be officially launched on June 9 this year, and accept the general registration from general merchants. Lekutian official said, the online business registration and telephone recruitment are proceeding smoothly.
Japnese Rakuten was established in 1997 which is the pioneer and leader of global e-commerce B2B2C model. With Baidu Rakuten launched lekutian targeting to be super big Chinese online shopping mall. According to the investment handbook, businesses in cigarettes amd liquor are not allowed to register currently.
Data show that China’s online shopping market is in rapid growth in recent years, and transactions in 2009 amounted to 250 billion yuan, with a growth rate of 93.7%. Experts predict the field is expected to exceed 1 trillion yuan in 2013, and number of users who shop online will reach 66% same as the rate in developed countries.
Earlier on May 10, Alibaba Chairman Jack Ma, Masayoshi, chairman of SOFTBANK Group announced cooperation with Yahoo Japan, fully opened the platform of China and Japan online shopping.
Alibaba for the first time carry out overseas acquisitions to enter the U.S. market(0)
This is the first overseas acquisition carried out since the establishment of Alibaba. Alibaba claimed the acquisition was a substantial deployment into the U.S. market.
Located in Silicon Valley, California, Vendio Company has 11 years experiences in online retail services, currently helping more than 80,000 independent online B2C retailers sell products by eBay, Amazon with more than 2 billion U.S. dollars transactions.
According to Alibaba disclosure, after Vendio was acquired, it would be integrated into Alibaba “global express sale” in order to help “Made in China” to enter the U.S. consumer market as online express train.
Alibaba CEO Wei Zhe commented the docking of platforms would attract more than 80,000 quality buyers and potential purchasing client base.
It was said that this acquisition would end in July 2010 and Vendio would keep its brand, business and team.