On­line shop­ping click­ing up

An­a­lysts be­lieve rise will slow as buy­ers ma­ture

China Daily (Hong Kong) - - BUSINESS - By MENG JING mengjing@chi­nadaily.com.cn

Amid the fierce com­pe­ti­tion among on­line retailers in China, to­tal trans­ac­tions in the In­ter­net re­tail mar­ket­place jumped 47.3 per­cent year-on-year to 754.2 bil­lion yuan ($123.2 bil­lion) in the first half of this year, ac­cord­ing to a re­port re­leased on Mon­day.

On­line re­tail trans­ac­tions ac­counted for 6.8 per­cent of all the re­tail sales in China dur­ing the same pe­riod, ac­cord­ing to the re­port by the China e- Busi­ness Re­search Cen­ter, a Hangzhou- based in­de­pen­dent re­search firm.

On­line shop­ping is ex­pected to con­trib­ute 7 per­cent of China’s re­tail sales by the end of this year, with the to­tal turnover of on­line shop­ping reach­ing 1.74 tril­lion yuan in 2013, said the re­port.

Tmall.com, a lead­ing busi­ness-to-cus­tomer on­line plat­form owned by China’s e-com­merce gi­ant Alibaba Group, is the big­gest win­ner in the first half of this year by se­cur­ing 50.4 per­cent of the mar­ket share in Web-based re­tail busi­ness.

JD. com, an­other on­line re­tailer, slightly in­creased its mar­ket share to 20.7 per­cent, tak­ing sec­ond place. The on­line busi­ness sec­tor of Sun­ing Com­merce Group Co Ltd, a lead­ing home ap­pli­ance re­tailer, made sig­nif­i­cant progress in the first half of the year.

The com­pany’s mar­ket share in­creased 54 per­cent yearonyear, se­cur­ing a to­tal of 5.7 per­cent of China’s on­line shop­ping mar­ket be­tween Jan­uary and June.

De­spite that boom­ing growth, on­line retailers still feel a cer­tain chill. Liu Qiang­dong, the founder and chief ex­ec­u­tive of­fi­cer of JD.com, a lead­ing on­line re­tailer in China, said “it is dif­fi­cult to sell”, speak­ing at the com­pany’s open plat­form con­fer­ence in late July. His speech was echoed by a lot of seated ven­dors, who sell their prod­ucts via JD.com.

Mao Ajing, an e-com­merce an­a­lyst with the Bei­jing-based re­search firm Analysys In­ter­na­tional, said with the ma­tu­rity of the on­line shop­ping mar­ket in China, the ex­tremely high records in sales, which were set by Web plat­forms in the pre­vi­ous two years, are un­likely to hap­pen again.

Ac­cord­ing to a pre­vi­ous me­dia re­port, as much as 19.1 bil­lion yuan, a record- high, was spent on a 24-hour shop­ping bonanza at Taobao.com and Tmall.com — both owned by Alibaba Group — on Nov 11 last year, a date known as Sin­gle’s Day in China.

“The growth rate of the on­line re­tail busi­ness in China was about 60 per­cent in 2011. It will be dif­fi­cult for the mar­ket to keep a sim­i­lar mo­men­tum this year be­cause on­line shop­pers are be­com­ing more ra­tio­nal,” Mao said.

Her com­pany ex­pects the growth rate of the on­line shop­ping mar­ket in the sec­ond half of this year to in­crease by 5 per­cent­age points com­pared with the fig­ure in the first half of this year. How­ever, the over­all growth rate of the on­line re­tail mar­ket in China is still es­ti­mated to be be­low 50 per­cent, she said.

China’s State Coun­cil is­sued guid­ance in mid-Au­gust to boost in­for­ma­tion-sec­tor con­sump­tion, aim­ing to make the in­dus­try a new eco­nomic pow­er­house for China.

Ac­cord­ing to the guid­ance, the trans­ac­tions of e-com­merce, which is a ma­jor part of the in­for­ma­tion sec­tor, are fore­cast to to­tal 18 tril­lion yuan, with on­line re­tail trans­ac­tions reach­ing 3 tril­lion yuan by 2015.

PRO­VIDED TO CHINA DAILY

On­line shop­ping is ex­pected to con­trib­ute 7 per­cent of China’s re­tail sales by the end of this year, ac­cord­ing to a re­port by the China e-Busi­ness Re­search Cen­ter.

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