E-commerce booming in China

  • Opinion
  • Saturday, 22 Dec 2012

Cyberspace is the new frontier as China is poised to overtake Japan and the US as the largest online retail market in the world by next year.

AFTER all these years living in China, I finally bought a watch online – my first item other than flight and train tickets since the e-commerce boom over the past decade.

Suning Appliance Co Ltd, China’s largest electrical appliances retailer, has its own online retail website for several years; Alibaba has continued to expand by consolidating taobao.com, etao.com, tmall.com, ju.taobao.com, Alibaba Small Business, Alibaba International Business and Alibaba Cloud Computing – all under its wings – into one huge marketplace.

Vancl, Yihaodian, 360buy.com and Suning have gone one step further with their applications for licences to set up their own express delivery companies.

Every now and then, new online retail companies will don advertisements at subway stations and on subway trains.

On Tuesday, Chinese Commerce Ministry spokesman Shen Danyang said at a press conference that in the first three quarters of the year retail sales from e-commerce transactions in China reached 806.2 billion yuan (RM395bil), which was up by 44% from the corresponding period last year.

He said the bank card penetration rate was 46.3% while average spending by the use of bank cards grew by 24.3%.

The ministry’s e-commerce division head Li Jinqi was quoted by China Business News as saying that e-commerce grew by more than 30% between 2007 and 2010 and the number of online consumers in China reached 210 million by the second-half of the year.

China is expected to overtake Japan and the United States as the largest online retail market in the world next year.

The proportion of e-commerce sales against the total retail sales of consumer goods surpassed the 1% mark in 2008 and increased to 4.32% last year, he said.

At a talk held in conjunction with the 14th China Retail Industry Convention in Tianjin last month, retailers and suppliers were told that it was not too late to invest in and expand their online business but what was important is to build their brand.

IBM Greater China Software Group senior marketing manager Fredric Lam said Japanese apparel brand Uniqlo was comparable with other Chinese brands but its products managed to sell well both online and offline because of its right brand-building campaign.

“While selling your goods online, you should still maintain the physical store and make use of it to launch new products and build your brand. For the e-commerce side of your business to be successful, you must start with your brand,” he said.

Cheng Xueyin, vice-president of Hisap High Technology Corporation which is one of China’s leading computer retailers, said nowadays consumers were becoming more rational as they would research the product they ought to buy before shopping online.

He said most online consumers would look for websites that offered them cheap goods, variety and the convenience of payment and delivery of goods.

“Right now, the book industry fits into this category perfectly. Most of the websites selling Chinese books manage to sell books at competitive prices and offer a wide selection as well as absolute convenience,” he said.

Vacation Asia International Travel (Shanghai) Co Ltd general manager Sim Kian Poh said the company was promoting its website pyotravel.com over the years as it had seen good returns from selling its services online.

“Our website has achieved more than 50% growth annually over the last few years and we expect to achieve a higher growth over the next two years given our strength in hotel booking in South-East Asia. Usually, about 2% of visitors to the website make their booking with us.

“If someone books through our website, we will channel his booking to the hotel for confirmation. Once it is confirmed, we will inform the person who will then pay us the money.

“By using such a merchant model, we are sure of payment and will have the advantage of getting a lower room rate because we will pay the hotel first in the course of the booking,” he said in an interview.

He said the company was creating awareness for its website in China using different marketing methods such as blogs, microblogs, forums, social networks, keyword search engines and e-mail.

He said it hired part-time staff to post articles on Sina, Sohu and QQ blogs and microblogs about tourist destinations, how one could plan his itinerary or what he could do during a trip.

“We set up different ID at 40 to 50 forums such as tianya.com where we would post comments on say, hotels in Singapore. Besides, we registered with social networks like Facebook, renren.com, kaixin001.com and linkedin.com to connect with as many ‘friends’ as possible and post information on pyotravel.com occasionally.

“Every month, we will also design a newsletter promoting our partner hotels and send them out to people in our e-mail list,” he said.

The e-commerce boom has seen the breeding of unethical operators. According to media reports, Beijing’s 12315 hotline complaint centre received 25,649 complaints on goods bought online.

Most of the complaints concerned after service and the quality of items such as cellular phones, daily goods, electrical appliances, apparel and food.

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Opinion , made in china


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