Time to jump on the e-com­merce band­wagon

China Daily (Canada) - - BUSINESS -

As the e-com­merce sec­tor ex­pands here, for­eign com­pa­nies are link­ing up with China’s ma­jor online plat­forms to push their brands.

Even though re­tail sales growth is show­ing signs of slow­ing, along with the rest of China’s econ­omy, there are still op­por­tu­ni­ties out there. And they tend to be in cy­berspace.

Online sales, for ex­am­ple, in the world’s largest dig­i­tal mar­ket­place are grow­ing at an an­nual rate of 25 per­cent. Ac­cord­ing to Bain & Com­pany, a top man­age­ment con­sult­ing firm, busi­ness-to­con­sumer online re­tail in China, or B2C, will grow three times faster than the over­all sec­tor.

By 2018, half of all online sales will come from third-tier cities and be­low.

For for­eign com­pa­nies, which are keen to at­tract Chi­nese cus­tomers, In­ter­net cam­paigns can have a pos­i­tive im­pact on sales and brand aware­ness.

To il­lus­trate that point, 20 lead­ing brands from the United King­dom were in­volved in an ex­clu­sive three-day pro­mo­tion in Au­gust or­ga­nized by the China-Bri­tain Busi­ness Coun­cil. The part­ner­ship also in­volved Juhua­suan, an e-com­merce plat­form and one of the hottest names in Alibaba GroupHold­ing Ltd’s port­fo­lio.

The CBBC has been help­ing UK com­pa­nies de­velop their busi­nesses here, and the online pro­mo­tion in­cluded global names such as fash­ion group Burberry, tea brand Twin­ings, and elec­tron­ics com­pa­nies Dyson and Ken­wood.

Sales rev­enue was more than 6 mil­lion yuan ($943,396), with the 15 brands in­volved in this year’s Great Bri­tish Brands Fes­ti­val ac­count­ing for half of the to­tal. E-com­merce made all this pos­si­ble, prov­ing that In­ter­net shop­ping is here to stay.

In fact, a re­port by For­rester Re­search, an in­de­pen­dent tech­nol­ogy and mar­ket re­search com­pany, showed that online spend­ing in China will reach $1 tril­lion by 2019. Growth will be fu­eled by mo­bile apps and an ex­panded lo­gis­tics chain. In re­cent years, these key fac­tors have helped e-com­merce com­pa­nies reach new cus­tomers in smaller cities.

The rapid in­crease in China’s In­ter­net pen­e­tra­tion rate, sparked by the growth in smart­phones, is one of the main rea­sons for the e-com­merce boom.

Last year, there were more than 360 mil­lion online shop­pers here — a fig­ure larger than the pop­u­la­tion of the United States. And by 2020, it will grow to more than 750 mil­lion.

Nat­u­rally, lo­gis­tics has a cru­cial role to play in the rush to ex­pand the e-com­merce in­dus­try. Build­ing a solid de­liv­ery sys­tem span­ning the whole of China is chal­leng­ing but ul­ti­mately re­ward­ing. Both Alibaba and its online ri­val JD.com have in­vested heav­ily in lo­gis­tics net­works.

Con­sumers have also em­braced shop­ping online and the trend to­ward cash­less trans­ac­tions. Ac­cord­ing to the num­bers, China has more than 4 bil­lion bank cards in cir­cu­la­tion. So when for­eign re­tail­ers set up flag­ship shops here, they should also pay at­ten­tion to their e-com­merce pres­ence on Chi­nese online sites.

Get­ting your brand out there is vi­tal. In­deed, cer­tain UKre­tail names, which hold a royal war­rant, might have an ex­tra edge over in­ter­na­tional com­peti­tors. This means a com­pany regularly sup­plies goods or ser­vices for a min­i­mu­mof five con­sec­u­tive years to theUKroyal fam­ily.

Brands like that have great ap­peal world­wide as well as in China.

Con­tact the writer at zhangchun­yan@chi­nadaily.com.cn

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