“In other countries, e-commerce is a way to shop; in China it is a lifestyle,” says Alibaba founder Jack Ma.
A study by KPMG says online consumer trends are re-shaping the ways Chinese consumers purchase goods and services.
China’s large and growing middle-class has become accustomed to making frequent e-commerce purchases. Furthermore, as in many longer-standing e-commerce markets, they are developing brand awareness, an increasing proclivity to purchase high quality and/or individually satisfying products, and showing a commitment to brand loyalty and repeat business, says KPMG.
The future development of China’s e-commerce channel is closely linked to technology developments and also the behaviors of Chinese consumers, including the way they research and order products online, and their preference for speed and convenience.
According to Mary Chong, KPMG partner and head of e-commerce and payments for China, there are four drivers of e-commerce growth in China: e-commerce platforms, social media platforms, digital payments platforms and mobile devices.
With almost instantaneous feedback and easy-to-use interfaces, social media platforms have become a staple in the lives of Chinese e-consumers. According to recent e-commerce statistics in China, 40 per cent of China’s online shoppers read and post reviews about products – more than double the number in the US.
Accompanying the rise of e-commerce in China is a clear trend towards mobile devices. In 2012, mobile transactions totaled US$7.8 billion, representing 3.7 per cent of all e-commerce transactions in China. However, by 2015 mobile commerce in China is forecasted to more than quintuple, to US$41.4 billion, representing eight per cent of all e-commerce transactions.
China’s e-commerce market is dominated by Alibaba, owner of Taobao and Tmall. Alibaba recently reported that the total value of merchandise sold in 2012 was greater than that of Ebay and Amazon combined. By 2016, Alibaba expects to pass Walmart as the number one retail network in the world.
By 2015, e-commerce transactions in China are projected to hit US$540 billion, or 7.5 per cent of total retail transactions, and by 2020, China’s e-commerce market is forecasted to be larger than those of the US, Britain, Japan, Germany, and France combined.