Joey Chan, Vice President, Nielsen China; Marco Tang, Associate Director, Nielsen China; Queenie Gu, Associate Director, Nielsen China
With over 500 million people online, China’s e-commerce industry already offers major opportunities to retailers and is poised for significant development in the years ahead. Currently, 38 percent of Chinese consumers shop online. With a population as large as China’s, this represents huge amounts of commerce, yet the percentage of people buying goods online is far below rates in Europe, the U.S., and even other Asian markets, where online shopping penetration rates can reach upwards of 60-80 percent. Many in China are already preparing for the time when the rest of the population begins to adopt e-commerce. Central planning is underway, warehouses, distribution centers and other logistics are being constructed, and manufacturers and retailers are refining the product lines and assortments. In fact, the China Internet Network Information Center predicts online retail sales could reach 3 trillion Yuan in 2012 (~$475 billion USD). And, trends suggest Chinese e-commerce will only grow from there.
In this ripe environment, retailers planning their Chinese e-commerce strategy have two overarching goals: expand their consumer base, and improve consumer satisfaction and loyalty. China’s online shoppers right now are primarily younger and more educated consumers (with 80% having a college education). For these shoppers, price and convenience rule. For traditional brick-and-mortar retailers, entering the online market expands their potential shopper base by offering more convenient buying opportunities. To truly win in e-commerce, retailers must synergize their online and brick-and-mortar shopping experiences to improve the customer’s experience both online and offline. Flexible shopping and delivery/pick-up options and smart promotions can facilitate sales both online and off, boosting a retailer’s overall bottom line. Satisfied customers with successful online purchases are likely to drive more sales as consumers share positive experiences via social media. A recent Nielsen survey found 85 percent of Chinese consumers regularly use social media to share their experiences with online purchases.
As retailers look to synergize their offline and online businesses, the challenge is how to develop successful marketing strategies for the sophisticated Chinese consumer.