China, as the biggest digital market in the world, its online retail market keeps growth with an increase of 25% YoY, estimated by Bain & Company. And, the growth rate of China online B2C retail market is 3 times higher than overall China retail market. By 2018, half of the revenue of China online retail market will come from tier-3 & lower cities.
The total retail sales of consumer goods reached 2,396.7 billion yuan (US$390.15 billion) in China in October 2014 while online retail sales exceeded 1.8 trillion Yuan, 9.64% of total retail from January to September 2014.
From 2010, the penetration rate of major online products is increasing. For example, in 2013, penetration rate of consumer electronic product increased to 20% and of clothing increased to 18%. Such products’ rapid growth in penetration rate is mainly due to Chinese consumers’ great passion for e-commerce market as well as efficient online payment methods.
In 2013, China was the biggest online market in the world and it is expected to lead mobile e-commerce market in 2014. As of June 2014, China internet users exceeded 632 million, of which 527 million were mobile phone internet users. Over 80% Chinese online shoppers shopped at least once on smartphones in 2013 and 20% of them do mobile online shopping every week.
China sees the highest intent for both online-shopping and online-purchase for categories including clothing, cosmetics, personal care, toys and alcohol drinks according to the research of Nilsen. Further, Chinese post-90s are more willing to spend and they tend to favor mobile shopping and use mobile payment.
On double 11 2014, with great promotion of online retailers, the sales value of Tmall increased to RMB57.1 billion (US$9.3 billion) which created a new sales record in the world. China’s double 11 indicates some changes in China online retail market.
- Total sales value increased by 60% YoY and sales value from mobile device increased by about 300%, which shows more online retailers are trying on mobile business.
- China e-commerce market is positively expanding abroad. Double 11 attracted buyers and sellers from more than 200 countries.
- More social media’s engagement. Global Web Index’s data shows 82% Sina Weibo users purchased a product online and 80% of them searched product or service to buy in Q3 2014.
Efficient online payment methods.
In Q3 2014, total transaction value of China third-party online payment market exceeded RMB2,015.43 billion (US$328.1 billion). In 2013, top third-party online payment provider—Alipay’s transaction value exceeded RMB3.5 trillion (US$0.57 trillion), which was nearly the 3 times more than the transaction value of PayPal. Alipay Wallet is the most popular mobile payment app by MAUs, followed by Tenpay, Bestpay, Alipay and Lakala in September 2014 in China.
In terms of China logistics market, there was 9.2 billion packages delivered in 2013. The average number of daily delivered packages of six logistics companies in China (SF Express,STO Express, YTO Express, Yunda Express, ZTO Express, TTK Express) were over one million. With the investment of logistics companies, online retailers can delivery their packages to tier-1 & 2 & 3 cities in 2 days and lower tier cities in 4 days.
Also read: Alipay’s Off-line Strategy Worked on Double 12 Shopping Day
