According to a report by eShopWorld, a leader in Global eCommerce and Logistics Management, last year on November 11 — China’s ‘Singles Day’ — ecommerce giant Alibaba reported sales of USD 5.7 billion, compared to total U.S. Cyber Monday sales of USD 2.29 billion. This year Alibaba predicts Singles Day sales will jump 40 percent to a whopping USD 8.2 billion. (Source: EarningsForecast.com, Earnings Forecast Buzz for Alibaba, Genworth Financial, Gilead Sciences, Zynga, Abercrombie & Fitch, and Plug Power, November 10, 2014)
The eShopWorld Market Insight points to a growing, internet-savvy middle class in China that is fueling the ecommerce explosion and has propelled China past the U.S., making it the largest ecommerce market in the world. By 2020, online spending in China is projected to total more than that of the U.S., UK, Japan, Germany and France combined according to the market insight. (Source: McKinsey & Company, China’s E-Tail Revolution, March 2013)
“The growth of ecommerce in China in recent years has been nothing short of jaw dropping,” said Martin Tully, SVP Global Sales & Marketing, eShopWorld. “Global brands and midsize U.S retailers should be actively considering how to capitalize on the booming Chinese e-commerce market. Online shoppers in China are increasing buying items from overseas and particularly from the U.S.”
However, Tully cautions, “U.S. retailers entering the Chinese eCommerce market need to ensure that the Chinese customer’s ecommerce experience, from checkout to returns, is ‘glocalized’ and seamless or they risk tarnishing their brand in this important market.”
The eShopWorld Market Insight on China aggregates important facts and statistics to help retailers better understand the China e-commerce opportunity. Below are examples of some of the information contained in the report.
Online Shoppers in China Buy from U.S. Retailers
Approximately 84 percent of Chinese cross-border shoppers buy from U.S. websites (including those on Chinese digital marketplaces such as Alibaba’s Tmall), and forecasts predict that nearly 40 million shoppers will spend ¥1 trillion (USD 161 billion) by 2016. (Source: PayPal, Modern Spice Routes survey, June 2013)
Social Media Plays Critical Role in China eCommerce Market
The eShopWorld Market Insight references several sources that conclude that social media has a bigger influence in China than any other country.
- Approximately 40% of online shoppers in China read and post reviews, compared to less than 20% in the U.S. (Source: KPMG, China 360 – E-Commerce in China: Driving a new consumer culture, Jan 2014)
- If dissatisfied with a product or the service (e.g., delivery, or return policy) accompanying it, most online shoppers in China will post a negative review. (Source: Bain & Company,China eCommerce – Heading toward RMB 1.5 trillion, Feb 2012)
China is the World Leader in mCommerce
The ubiquitous use of social media has also helped China to become the world leader in m-commerce.
- Shoppers in China made USD 16.7 billion worth of transactions from their mobile devices in 2013. (Source: PayPal, Modern Spice Routes survey, June 2013)
- 55% of mobile users in China have made a mobile payment, compared to 19% in the U.S. (Source: KPMG, China 360 – E-Commerce in China: Driving a new consumer culture, Jan 2014)
- In 2013 during Singles Day, Alibaba reported that 21% of its orders were placed via mobile device, up from 5% the year prior. (Source: Thenextweb, 2013 has been a year of epic proportions for E-commerce in China, and it’s only set to grow, Kaylene Hong)