e-Commerce in China, what Brands need to Know

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China’s e-commerce market continues to see high double-digit development year on year. The Double 11 event on 11 November 2017 – otherwise called Singles’ Day, when single people in China celebrate, and which has become a well known shopping occasion – was a clear example of how China’s utilization led economy is evolving carefully. Online marketplace Alibaba saw sales development of 39% in examination with the event in 2016, suggesting that Chinese consumers are confident in their spending and that utilization will continue to rise.

China: a blasting market

China’s economy continues to develop steadily as it ended 2017 with Gross domestic product at 6.8%, as indicated by China’s National Bureau of Measurements (NBS). In line with this positive momentum, at Nielsen we saw China’s consumer confidence index (CCI) reach a noteworthy high of 114 in both the third and fourth quarters of 2017, up two from the second quarter of 2017 and six points from 108 in the final quarter of 2016.

CCI scores above and below 100 points represent, respectively, positive and negative consumer confidence. A record-breaking high CCI, coupled with healthy disposable income development of 7.5%, as reported by the NBS, means that consumers are confident and consumer demand or utilization is expected to remain steady. We see utilization increasing as consumers in China spend more than any time in recent memory: 43% more compared with five years back. That is leagues ahead of the 24% development in the US and 33% all around.

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Nielsen’s e-commerce following information, inside 34 quick moving consumer merchandise categories, demonstrates that in a year moving average leading up to November 2017, online sales grew 27% versus the year before, whereas offline sales increased just 6% over the same period. Meanwhile, the proportion of enterprises with e-commerce services increased altogether in the most recent year. As indicated by Nielsen’s CCI report, up to Dec 2016, the proportion of enterprises propelling online sales reached higher than 45%.

There’s no uncertainty that China’s e-commerce market is on an overall upward trajectory. In line with this, Nielsen has identified five key trends that we believe are driving the development of the market, and which will be essential for businesses to leverage to ensure success in 2018.

Five key trends driving China’s e-commerce market

1) E-commerce shopping festivals

E-tailers are creating more shopping festivals and themes to open consumer desire. Based on Nielsen’s survey, before Double 11 this year, 79% of consumers said they planned to participate in Double 11. Alibaba saw 168 billion RMB in sales and 39% development on Singles’ Day, while another principle competitor, JD.com, achieved RMB 127 billion amid 1-11 November, with over half development.

Double 11 and comparative shopping festivals are an open door for nearby brands, yet these are additionally key opportunities for foreign brands to leverage the collective enthusiasm for shopping among Chinese consumers. On these occasions, consumers are hoping to experiment, attempt new things and purchase items that might be new to them. These festivals are a perfect open door for new brands entering the market to get noticed.

2) Utilization upgrade

Two triggers are starting a trend known as “utilization upgrade”. Rising disposable income means that consumers are more confident in spending their money on a number of categories – especially sustenance, cosmetics and attire. An emphasis on quality and style are developing a lot faster than other consumer demands. Following this, middle-to upper-class consumers are currently increasing their demand for merchandise that are not available domestically. As per the World Economic Gathering’s Understanding Report on the Future of Utilization in Quick Development Consumer Markets – China, online stages, where international top of the line and niche brands are easily accessed, are ascending in notoriety, while cross-border shopping sites are leading the utilization upgrade movement.

As indicated by Nielsen’s online shopper trend report, the extent of consumers who had recently made a cross-border e-commerce purchase reached 67% in 2017, compared with just 34% in 2015.

Imported merchandise are recognized by Chinese consumers for their attention to quality, health and safety and even package design. Through different online stages, such Kaola.com, Tmall Worldwide and JD Worldwide, Chinese consumers presently have expansive access to items from everywhere throughout the world. YanXuan by NetEase is a developing e-tailer in China focused on quality and premium items, and it drove NetEase’s e-commerce business by 118% in 2016.

3) New retail: online and offline are merging rather than competing

Since the term “new retail” was coined by Jack Mama in 2016, it has been an intriguing issue for manufacturers and retailers alike. This concept emphasizes the integration of online and offline retail elements, including items, services, coordinations, huge information, marketing, management, etc.

Source: 

Weforum , (France marketing-Chine) , Statita

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