China is now the world’s biggest e-commerce market. A recent report from analysts Bain & Company paints a stark picture of its growing importance. In one day in 2012, the report says, “more people logged on to China’s most popular e-commerce site than the entire population of Brazil.” The Chinese market presents a huge opportunity for e-commerce businesses and brands across the world. The sheer volume of people, combined with high internet penetration and forward-thinking shopping habits, means that e-commerce firms should be targeting China as a key part of their global strategy.
THE RISE OF ALIBABA
In China, Alibaba, an online retail giant, currently dominates e-commerce. The firm offers B2B, B2C, and C2C services, and was originally designed to provide Chinese manufacturers with the opportunity to sell to businesses and consumers abroad. Today, however, the service is a hub for both Chinese and foreign buyers, and is launching a US-based platform called 11 Main. Alibaba is bigger than Amazon and eBay combined, and some analysts predict that it will become the first $1 trillion company. But Alibaba is not the only show in town. Chinese buyers are increasingly comfortable shopping online, and they are spreading their nets wider. In this way, the Chinese market is not only an opportunity for Western e-commerce businesses; it is also a sign of the international future. Internet penetration across China is vast and rapidly growing. According to a Huffington Post report, one third of Chinese farmers now own a smartphone. But just as importantly, those consumers are choosing to buy as well as browse. Chinese consumers far outstrip global average online purchase intentions in all of the categories measured by global information company Nielsen.
THE ASIAN TIGERS
Mainland China, however, is only part of the story. The so-called ‘Asian Tigers’, a group of liberalised economies consisting of Hong Kong, Singapore, South Korea, and Taiwan, also offer e-commerce businesses the opportunity to massively expand their markets. These territories have experienced very high growth over the last few decades, and even those that were attacked during the Asian financial crisis in 1997 have bounced back impressively. It is no longer enough for e-commerce businesses to focus solely on their home markets. Global expansion is key to any successful online strategy. The internet has brought the world closer together, and this presents a significant boon for firms operating online. Examples of businesses that are making innovative use of the Chinese and Asian Tiger markets abound. Consider Lyst, an online fashion marketplace that delivers globally and counts China amongst its biggest markets. The site provides a ‘digital shopping mall’ for high-end clothing brands, but it does not fulfil orders itself. Instead, using techniques like IP tracking, the site works out where the visitor is based, and then shows only products that brands can ship to the visitor’s location. It also offers prices in local currency, providing a completely personalised online shopping experience. China and the Asian Tigers will continue to grow in importance for e-commerce businesses across the world. An approach that recognises the importance of personalisation, and one that understands that shoppers in Shanghai have different habits to those in Southampton, is rapidly becoming a necessity.