Tapping into China’s eCommerce revolution


Tapping into China’s eCommerce revolution

http://fairtrademusicinternational.org/inequality-in-the-music-economy/ Successful e-commerce website owners should be looking to expand their reach beyond our Australian borders. In China, there is an unexplored and thriving online e-commerce market and contrary to popular belief, it is not as inaccessible as one might think.

go to link So long as the challenges of payment & logistics can be overcome and a positive customer experience created for Chinese online shoppers, Australian eCommerce sites could experience massive growth by marketing to China.

Compared to the Australian online retail industry, which was valued at AU $11.5 billion in 2011, China’s ecommerce industry has grown in leaps and bounds. In 2011 it was valued at US $121 billion (AU $114.2 billion), comprising 14% of total retail sales… and there is even more good news! According to a recent Credit Suisse report (2012), ‘Chinese consumers are optimistic about spending and as their incomes improve, they are spending more on international brands’. With online shopping growth and consumer confidence in international brands, China is not a market to be overlooked.

How did it grow so quickly? The nature of a fast developing economy like China has meant that over the past 10 years, the Chinese online population has increased from 20 million to 538 million – roughly 22 times the population of Australia! This massive growth is forecast to continue, with estimates that by 2012 it should reach the 700+ million mark. It hard to imagine what dollar value this represents for ecommerce in China’s future.

China’s ecommerce growth can lend credit in part to www.taobao.com, its biggest and most popular C2C ecommerce site. In 2003, when Taobao first entered the market, the largest Chinese e-commerce website was EachNet, with over 3.5 million registered individuals. It was later acquired by EBay. Just two years later Taobao, owned by the Alibaba Group, managed to capture 59% of the market share, and sent EBay packing.

Taobao’s success was largely due to their ability to see the existing problems within the local market, and respond to them. The Alibaba Group acknowledged that in the early 2000s, online payment systems were still underdeveloped, a significant obstacle in encouraging online sales. As a result, they launched their own online payment system, Alipay (China’s Paypal), to facilitate online sales. They also developed an online instant message service to capture the Chinese people’s enthusiasm for negotiations and networking. Clearly these changes were embraced and in 2010, Taobao accounted for 79% of total online sales.

Australians on the other hand have been slow to embrace the ecommerce revolution. Many SMEs lacked the technical expertise to engage in online sales, whilst others took a long time to overcome their concerns about security and logistics. With the advent of
ecommerce ‘internationalisation’ we are seeing this trend re-emerge once again. Let’s hope that Australian ecommerce site owners are quick to overcome these obstacles, as it’s predicted that every year for the next 10 years, another 30 million Chinese each year will go online to shop for the first time (Boston Consulting Group, 2012).

With its solid infrastructure, it is likely that ecommerce in China will continue to thrive.

The Chinese are commerce-centric and responsive to the needs of its people, and enjoy online shopping. Where the opportunities in Australia are still limited, they are plentiful in China, and with an additional 30 million online shoppers each year, it’s a market worth

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