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  • Posted on 12 January 2016

5 keywords to summary 2015 Chinese E-commerce market

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In 2015, E-commerce in China continues to create new records and the market eco-system is evolving on each part: from city to countryside, from domestic to cross-board, from pricing driven to service driven, etc.

Keyword 1: Festival made by E-commerce

“Double 11”, the most famous shopping carnival now in China created the daily sales record 91.2 billion in 2015. This event proves the mobility and potential of Chinese online consumption. Thus some big ecommerce market places like JD, Suning would like also to establish their footprint into the “harvest”. From “3.8” Women’s Day to “6.18” JD Anniversary, then “Double 12”, the big online campaigns are all surrounded with promotions. Chinese consumers who are active to online shopping then get a nick name as “Duo Shou Dang” (Hand choppers).

New e-commerce players are also trying to create its own festival to attract “Hand Choppers” attention, however, as the market competition is becoming more and more fierce, consumers will eventually become savvier facing to the artificial festival.

Keyword 2: Countryside E-commerce

In 2015, Big Ecommerce players like Alibaba, JD and Suning are now switching their strategies into countryside market, where the huge e-commerce potential is their business motivation.

According to governmental report, by the end of 2014, 40% rural citizens have already bought online. Over 8000 “Taobao Village”, villagers are doing their business successfully. JD has the ambitious to create the “village ecommerce ecosystem”, where villagers can buy seeds, fertilization, agro-tools etc.

On 9th Nov, Chinese government released a document regarding to the improvement of e-commerce service in countryside, like logistics, finance, distribution, etc. This policy will be favorable for e-commerce development in 2016.

Keyword 3: Cross board E-commerce

Aside from Tmall International and Taobao Global, we also saw some new business models who got success in 2015, like “Xiao Hong Shu” and “Yang Ma Tou”. Chinese consumers have more and more preferences with imported products due to the industry scandals and stronger Yuan exchange rate. This insight can be seen from the sales trend in Tmall International, which is the brand to operate the store. (M2C) While Taobao Global and Yang Ma Tou are C2C model. What need to be highlighted is content sharing driven for “Xiao Hong Shu”. This user content generated e-commerce site not only lead cross board market, but also successfully engage consumers with the product and brand.

Chinese government has been highly supporting the development cross board ecommerce in 2015, some free boarder policies and tax advantages will be the new sources.

At the same time, cross board e-commerce still has a lot of challenges: how to improve after sell service, how to improve pricing strategy and supply chain, etc.

Keyword 4: Fresh E-commerce

Until 2015, cold and fresh category e-commerce is under development. Baidu invested Wo Mai site, Walmart joint YHD, JD bought Tiantian Guo Yuan. Some new entrants like Ben Lai Sheng Huo also raised several rounds of founds.  Fresh ecommerce is considered as a good move for O2O ecosystem.

However, customer still need to have time to educate and change their habits on fresh category. Only 20% platforms support no reason exchange or refund service. Due to the high maintaining fee and logistic cost, few suppliers would like to take the responsibility. Besides, lack of legislation control will affect this category development in 2016.

Keyword 5: Maternal E-commerce

For maternal and children market, 2015 is a war year. With the high development, like Miya Baby, Baobao Shu, Beibei Site, maternal ecommerce is facing to “Burn money” and “change” phase.

In order to acquire as much as new customers, pricing war was the main strategy in the market. Starting from the second year of 2015, maternal market places were looking for changing long-term strategies. In stead of focusing only on maternal products, one-stop shop provides all the categories related to mother’s needs, like clothes, nutrition, cosmetics, etc. On the other side, “two child policy” announced in the end of 2015 will for sure help to boost maternal e-commerce in 2016.

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Posted by NetBooster Asia (Shanghai)