Con­sump­tion will all look dif­fer­ent to­mor­row

China Daily (Canada) - - E-COMMERCE -

The slow­down of phys­i­cal re­tail and the high ex­pec­ta­tion for growth have led Chi­nese CEOs to look for new growth av­enues — and e-com­merce is seen as one of the last few levers for growth. The mass of online shop­pers — a ma­jor­ity of them born in the 1980s and ’90s and in­creas­ingly rich — is the driv­ing force. Their ris­ing pur­chas­ing power has also drawn more con­sumer brands online. In ad­di­tion, a few con­sumer brands grow­ing out of Taobao’s ecosys­tem have grown so fast that by now a few of them are start­ing to look at be­ing listed on the Growth En­ter­prise Board and get­ting at­ten­tion from mar­ket lead­ers across sec­tors rang­ing from ap­parel to food.

Our clients come to us seek­ing an­swers about the fu­ture trends of Chi­nese e-com­merce. We would like to pro­pose an out­look for three years.

First, we be­lieve mo­bile tech­nol­ogy will be­come more im­por­tant to e-com­merce than to­day. The rise of mo­bile and com­merce will fur­ther con­nect what con­sumers buy dig­i­tally and what con­sumers ex­pe­ri­ence in stores — in­te­gra­tion of online and off­line ex­pe­ri­ences.

Sec­ond, we be­lieve the struc­ture of Chi­nese e-com­merce will largely re­main the same — plat­forms like Tmall and JD will con­tinue to be dom­i­nant in ab­so­lute value while new for­mats for e-tail­ers will gain im­por­tance to serve the ris­ing dif­fer­en­ti­ated needs of life­style and com­mu­nity. Af­ter the first wave of e-com­merce growth via plat­forms like Tmall, we be­lieve con­sumer brands will re­visit their e-com­merce busi­ness model and the multi-chan­nel ap­proach in China. Brands will start to shift from traf­fic-fo­cused growth to loy­alty-based growth be­cause online traf­fic will be more ex­pen­sive. We be­lieve brands that know how to cu­rate con­sumer in­ter­est and of­fer the most com­pet­i­tive prod­ucts and ser­vices ei­ther online or off­line or a com­bi­na­tion of both will win ul­ti­mately.

Last but not least, with the en­rich­ment of data from e-com­merce, dig­i­tal mar­ket­ing and other dig­i­tal plat­forms, the re-imag­i­na­tion of data an­a­lyt­ics and ap­pli­ca­tions will be­come the new force for com­pet­i­tive ad­van­tage and suc­cess.

We also fore­see that com­pa­nies will have to re-engi­neer how they op­er­ate to fit into e-com­merce. In­creas­ingly, the role of e-com­merce is shift­ing from a sales chan­nel to a new mar­ket seg­ment. We have started to see an ac­cel­er­ated pace in in­no­va­tion in con­sumer brands’ e-com­merce ap­proach — from cre­at­ing the dig­i­tal com­mu­nity to driv­ing traf­fic to an­a­lyt­ics-based com­mu­ni­ca­tion and cus­tomiza­tion.

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