China’s online shoppers set to spend US$1 trillion
China has more than 500 million online shoppers whose spending is set to exceed US$1 trillion this year.
Of this, cross-border e-commerce purchases are about to reach $125 billion, according to new research by consultancy Frost & Sullivan. In partnership with China retail strategy expert Azoya Consulting, it has released the report The Cross-border e-Commerce (haitao) Opportunity in China.
This includes research among more than 1000 online shoppers in China, together with findings from interviews with more than 100 international retailers and brand owners.
Frost & Sullivan Asia-Pacific consulting director Mark Dougan says the average online shopper in China spends almost $850 a year on purchases from overseas retailers. “Chinese consumers are significantly motivated by the perceived higher quality overseas retailers offer, while the risk of buying fake goods is lower.”
The research also shows that cross-border online shopping is growing strongly, with 63 per cent of Chinese shoppers planning to increase their spending this year. Fashion is the top category bought from overseas retailers (22 per cent of online shoppers in the past month), beauty and cosmetics (20 per cent) and mother and baby (15 per cent).
As a country of origin, Japan gains the most confidence from Chinese online shoppers (72 per cent), followed by South Korea (60 per cent).
Women are higher cross-border online shoppers than men, spending $976 on average annually, which is 20 per cent more than men. Men seek fast delivery, while women seek Chinese-language customer support. Women are more likely to use an overseas supplier’s standalone direct-to-consumer website (21 vs. 18 per cent of men).
More than 80 per cent of global retailers see China as an attractive market opportunity yet only 30 per cent are satisfied with their current level of sales in China. This is particularly the case for those using Chinese marketplaces as their online channel, where only 21 per cent of retailers are satisfied with their sales levels.
“To build a brand that Chinese consumers trust, that commands a healthy profit margin and repeat buyers, retailers need to approach customers through multiple touchpoints,” says Azoya International co-founder Don Zhao.