Eguan International China Entry Seminar 2017 Q1
Over the next five years, e-commerce could become an even more important retail channel in China. Private online consumption is projected to surge by 20% annually through 2020, compared with 6% annual growth in off-line retail sales. This means that eCommerce will account for 42% of growth in private consumption. By then, China’s online consumer market will have grown to $1.6 trillion annually—24% of private consumption.
Mobile eCommerce, which already accounts for 51% of all online sales in China, compared with a global average of 35%, will grow even faster. On Taobao, the share of sales transacted through mobile devices rather than PCs rose from 51% to 62% within the first three quarters of 2015 and reached 68% on the year’s Singles Day. By 2020, mobile e-commerce is projected to account for 74% of all online sales in China. 2016 Tmall Double 11 sales had reached RMB 80.7 billion (USD 11.85 billion).
Here are some Common questions :
Have we got the right products for China?
How do we align our business with the right channels, connections, distributors?
Is there a proper China entry strategy?
Do we know the right people? If so, how do we maintain a good relationship?
How do we maintain a sustainable model that goes a long way?
When we talk about the Chinese market, the statistics around consumer consumption patterns are incredible. However, with the difficulties New Zealand companies face in keeping up with Chinese demand, we are faced with an interesting question: - How do we come up with a strategy that will achieve the best result for our products and services in a vast, yet highly competitive and dynamic market?
Three platforms introductions
Online platforms - China’s online market leaders are Taobao, TMall and JD. You could loosely compare Taobao to eBay, and JD and TMall to Amazon. And despite product authenticity issues that made headlines in the past, Chinese eCommerce platforms have seen continued business success.
Wechat platforms - Figures are updated by 17th of November 2016 there are 549 million wechat active users worldwide. People are not only use wechat as their communication tools and also use that as a eCommerce sales platform. Because it's convenient payment method and transmitting abilities, wechat has already taken some shares off the conventional online eCommerce platform.
Offline - conventional supermarkets and stores retail sales are growing at a rate of 6.6% per annum. The internet firms aren’t just gobbling up other online players. Some US$47 billion has been spent on physical retailers and another US$797 million on logistic providers. Analysts say this reflects the broad adoption of an online-to-offline, or “O2O”, strategy. “O2O has become the new growth driver for internet companies, especially e-commerce companies, which have been making efforts to broaden their services and product offerings and to enhance shopping experiences for online shoppers,” HSBC analysts wrote in a report last month. Physical distribution capabilities have been on Alibaba’s shopping list. Its partnership with Haier Electronics Group two years ago strengthened its ability to fulfil white goods, and its August investment in Suning Commerce Group is expected do likewise for consumer electronics. Competitor JD.com already has delivery capabilities, so its focus is on investing to broaden its product portfolio, by partnering with local supermarkets, convenience stores and pharmaceutical chains. In August it boosted its fresh food business by taking a stake in supermarket chain Yonghui Superstores.
Based on the above findings, Eguan International, along with New Zealand Green Industry Association have established a China entry acceleration boot camp for New Zealand Export businesses.