We recently published an online retail forecast for Asia Pacific, followed by an online forecast specific to China. The numbers are staggering! To give you an indication of the speed at which eCommerce is taking off in China, consider that recent figures from the State Post Bureau of China indicate that more than 6 billion packages were shipped in the first three quarters of 2013 - an increase of 61% from the same period in 2012. Factors contributing to China's massive eCommerce market and rapid growth include:
The Alibaba Group. Unlike our U.S. and European forecasts, Forrester's online retail forecast for China includes both B2C and C2C online sales (the other forecasts include only B2C). In China, B2C and C2C online sales are strongly influenced by the Alibaba Group's websites Tmall and Taobao. Tmall, which became a platform independent from Taobao in 2011, is making news for its unprecedented sales and has a long list of partner brands including the NBA, Microsoft and Gap. Apple made news recently when it opened a store on Tmall in addition to its existing direct-to-consumer site. The Alibaba Group also has a stronghold on the eCommerce payments space with Alipay, which, according to Forrester's Technographics data, tops the list of preferred online payments among metropolitan online shoppers in China.
Direct-to-consumer sites. More and more brands are operating direct-to-consumer (DTC) sites as either their sole online sales channel in China or as a supplement to other retail partnerships (e.g., a branded Tmall store or their standard partnerships with local multi-brand online retailers). The DTC approach has been a popular option for brands with expensive products that may not sell well on value-oriented marketplaces. Brands like Alexander Wang and Beats by Dr. Dre, for example, use a DTC approach in China, which lets them control the site experience and brand image. Tesla also recently launched a DTC site in China that allows customers to place orders for a car.
Customer-centric operations. In China, online businesses compete heavily on customer service to encourage consumers to feel comfortable shopping online. Online offerings that are well established and widely used in China would be considered above and beyond in many other markets: Free shipping, free returns, a long list of payment options and click to chat customer service are just a few examples. Amazon.cn CEO Wang Hanhua even noted in 2012 that Amazon's customer service in China has surpassed that of the U.S. In China, Amazon gives shoppers the option to track their packages down to the time of day that the package will arrive and offers free returns with the option to have the package picked up by Amazon's delivery service. In the same fashion as some of the other local online players, most notably Jingdong and Suning, Amazon has a shipping license in China that allows it to act as a delivery service to fulfill customer orders on its own (without a third party) which allows for better control of the end-to-end fulfillment process.
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