5 Chinese e-commerce trends to look out for
After an amazing year for Chinese e-commerce in 2015, with the market reaching 945.1 billion yuan (US$143.5 billion), a growth rate of 45% in the third quarter of 2015 (Analysys), it looks like 2016 will also be a promising year for the world’s largest e-commerce market. So what trends should we expect in 2016?
1. The continued growth of e-commerce as an alternative to physical shopping
It’s been estimated that e-commerce’s share of the total retail sales in China will increase by 3% in 2016 to 10.9% (eMarketer). The dominance of stores in China’s retail market is beginning to dwindle as shoppers are able to find the same products they see in the mall for a cheaper price online. Alibaba and JD’s heightened efforts to eradicate counterfeit goods from their platforms is also likely to increase consumers’ trust in online shopping and with the Chinese government’s shift in focus to a more consumer-driven economy after the recent crisis, an increase in e-commerce spending would definitely be welcomed.
2. There will be more emphasis on the omni-channel
Despite the increase in online sales, it would be crazy to suggest that stores will completely disappear. In fact, 2016 is likely to be the year where companies understand the importance of maintaining both offline and online consumer channels. The process of seeing an item online and then picking it up and trying it on in-store will be further simplified by retailers.
3. People in smaller cities will buy more online as delivery services improve
In an interview with National Public Radio, Josh Gartner of JD noted that whereas four years ago the majority of JD’s sales came from major cities like Shanghai and Beijing, now more than 50% of purchases were made by people in third and fourth-tier cities. The recent efforts to improve Chinese roads will lead to better, faster deliveries; especially for those who live far away from the nearest shops.
4. Millennials will be the biggest spenders online
With over half of China’s e-commerce shoppers being within the 20-30 age range, the growth in Chinese e-commerce will be driven by young shoppers. Recent research by Credit Suisse shows that while sites like Tmall and JD.com were popular amongst this age group there was a tendency to buy recognisable brands from abroad.
5. More transactions will occur on smartphones
As smartphone technology becomes more advanced, and with greater care given to mobile user experience and an increase in mobile apps, consumers will rely more on their phones and less on their laptops to pay for products online. As companies like Apple, PayPal and Tencent continue to innovate mobile payment solutions into the near future, more consumers will be enticed to pay for goods through their phones.
