China Online Retail Market Analysis

Summary of Online Retail Market in China
Out-bound online shopping is expanding faster than ever:
Key driving forces giving rise to online overseas shopping include product scarcity, product quality and competitive
pricing
Fashion and personal care are amongst the most in-demand product categories in online overseas shopping
Users engaged in online overseas shopping are mainly characterized by young age and high income groups coming
from Tier-1 cities in China
Idle time intervals are the potential growth zones for mobile retail:
Mobile retail has grown over 160% in 2013, accounting for a large proportion of the total online retail market
Mobile retail provides a more interactive shopping experience to users and hence triggers more impulse buying
A new trend is being witnessed where traditional retailers are showing an increasing tendency to develop O2O
business
The online retail market in China has grown rapidly in recent years:
The transaction volume was RMB1.85 trillion in 2013, accounting for 8% of the total retail value. It is also forecasted
to surpass RMB3 trillion in 2015
More than 300 million online shoppers in China, close to half of the total internet population
Nearly 30,000 eCommerce enterprises in China, creating stiff competition for newcomers
1
China online retail
market study
2014.08
2014
Part 1

Summary of Online Retail Market in China
Out-bound online shopping is expanding faster than ever:
Key driving forces giving rise to online overseas shopping include product scarcity, product quality and competitive
pricing
Fashion and personal care are amongst the most in-demand product categories in online overseas shopping
Users engaged in online overseas shopping are mainly characterized by young age and high income groups coming
from Tier-1 cities in China
Idle time intervals are the potential growth zones for mobile retail:
Mobile retail has grown over 160% in 2013, close to 30% of total mobile users are mobile shoppers
Mobile retail provides a more interactive shopping experience to users and hence triggers more impulse buying
A new trend is being witnessed where traditional retailers are showing an increasing tendency to develop O2O
business
The online retail market in China has grown rapidly in recent years:
The transaction volume was RMB1,850 billion in 2013, accounting for 8% of the total retail value. It is also
forecasted to surpass RMB3,000 billion in 2015
More than 300 million online shoppers in China, close to half of the total internet population
Nearly 30,000 eCommerce enterprises in China, creating stiff competition for newcomers
1

China Online Retail Market Study
1.1 China Online Retail Market Updates
1.1.1 China Online Retail Transaction
1.1.2 China Online Retail Transaction (% of total retail)
1.1.3 Number of Online Shoppers in China
1.1.4 Number of eCommerce Enterprise in China
1.2 China Mobile Retail Market updates
1.2.1 Growth of China Mobile Retail Market
1.2.2 China Mobile Retail Transaction
1.2.3 China Mobile Shopper Behavior – Purchase Intention/ Scenarios/
Preferred Products
1.3 China Outbound Online Shopping Updates
1.3.1 Outbound Online Shopping Increased Rapidly
1.3.2 Reasons for Outbound Online Shopping
1.3.3 Popular Products of Outbound Online Shopping
1.3.4 Demographics of China Outbound Online Shoppers/ Where Do the
China Outbound Online Shoppers Come From?
Part 1
2
1.2 China Mobile Retail Market Updates
1.2.3 China Mobile Shopper Behavior – Purchase Intention/ Shopping Scenarios/
Preferred Products
Part 1
2

China Online Retail Transaction1.1.1
2016e2015e2014e2013e201220112010 2017e
90%
80%
70%
60%
50%
40%
30%
20%
10%
100%
0%
4,500
3,000
1,500
6,000
0
3,600
3,020
2,450
1,850
1,303
784.5
461.0
4,140
3
19.2%
23.3%
32.4%
42.0%
66.1%
70.2%
75.3%
15.0%
2010 – 2017 China Online Retail Market Transactions
Growth rate ( % )Transaction ( Billion Yuan )
Source: iResearch, “2013 eCommerce market core value analysis”, 2014.1
Reached RMB1,850 billion in 2013. It is forecasted to surpass RMB4,000 billion in 2017.
The increase is mainly due to the rising number of online shoppers, higher internet penetration with more sophisticated
logistic support.
-
-
3
19.2%
23.3%
32.4%
42.0%
66.1%
70.2%
75.3%
15.0%

China Online Retail Transaction ( % of total retail )1.1.2
20132012 2014e
5.0%
4.0%
3.0%
2.0%
1.0%
6.0%
7.0%
0.0%
10.0%
8.0%
6.0%
4.0%
2.0%
12.0%
0.0%
20132012 2014e
8.0%
6.3%
9.8%
2012 – 2014 China online retail
( % of total retail )
2012 – 2014 US online retail
( % of total retail )
Source: 100EC, “2013 China online retail market insight report”, 2014.3 Source: eMarketer, “Comparative Estimates”, 2014.4
4
5.8%
5.2%
6.4%
Online retail in China has accounted for 8% of total retail volume in 2013, and it is predicted to hit 9.8% in 2014
The growth of online retail in China is advancing at a more rapid pace when compared with the US, which experienced a
growth of 5.8% in the same sector in 2013.
-
-

Source: CNNIC, “China internet development status report”, 2014.1
Number of Online Shoppers in China1.1.3
There were over 300 millions online shoppers in China in 2013, which is nearly half of the total internet population. YoY
growth was at 48.9% during the same period.
Enhanced technology improvements such as more secure payment processes, mobile purchase options, etc. are the key
factors driving users to shop online.
-
-
2012 – 2013 Number of Online Shoppers in China
20132012
48.9%
42.9%
38%
25%
13%
50%
0.0%
300
200
100
400
0
5
% of total internet users
Online shoppers ( million )
242
302

Enterprise (Unit)
Compared to 2012, the number of eCommerce enterprises in China increased by 18%. A growing trend will be seen in 2014
which it is expected to result in almost 35,000 eCommerce enterprises.
-
Number of eCommerce Enterprises in China1.1.4
2014e20132012201120102009
30,000
20,000
10,000
40,000
0
34,314
29,303
24,875
20,750
15,800
9,962
2009 -2014 Number of B2B, C2C eCommerce enterprises in China
Source: 100EC, “2013 China online retail market insight report”, 2014.3
-
6

Preferred Products
7

The growing popularity of smartphones and improved ease of use of mobile devices give rise to mobile commerce. The
number of mobile shoppers was 144 million in 2013, which is almost 30% of the total mobile population.
The share of mobile online retail is increasing and expected to surpass 20% of the total share by 2017.
-
-
Growth of China Mobile Retail Market1.2.1
8
2017e2016e2015e2014e2013e20122011
80%
60%
20%
40%
100%
0
24.1%
19.9%16.4%13.1%
9.1%4.8%
1.5%
75.9%
80.1%83.6%86.9%
90.9%
95.2%98.5%
2011 – 2017 China online retail share (PC & Mobile)
China online retail share ( Mobile )China online retail share ( PC )
2012 – 2013 Number of mobile shoppers
20132012
30%
20%
10%
40%
0.0%
120
80
40
160
0
28.9%
13.2%
55
144
% of total mobile users
Number of mobile shoppers ( million )

9
Due to technological advancements in the area of mobile purchase and payment processes, impulse buying on mobile
devices caused the transactions to surge by over 160% to RMB167.6 billion in 2013. The growth is projected to be doubled
by 2014.
-
China Mobile Retail Transaction1.2.2
2017e2016e2015e2014e2013e20122011
360%
240%
120%
480%
0%
750
500
250
1,000
0
998.5
716.3
495.3
320.3
167.6
63.2
11.7
39.4%
44.6%
54.6%
91.1%
165.4%
440.8%
426.1%
2011 – 2017 China mobile retail transaction (billion Yuan)
Growth rate (%)Mobile retail transaction ( billion Yuan )

As the process of mobile purchase has become more convenient in China, it boosts users’ shopping decision-making
process. 21.2% of users say they are more willing to browse eCommerce sites on their mobile devices rather than through
PC, while 65% of mobile shoppers claim they shop less in physical stores after they tried online shopping.
-
China Mobile Shopper Behavior – Purchase Intention1.2.3
22%20%18%16%
10
21.2%
20.5%
18.5%
18.2%
2013 China Internet users online shopping preference
( PC & Mobile )
Source: CNNIC, “2012 China online shopping market
research”, 2013.3
Do you visit stores less frequently after online shopping?
2%
65%
33%
Increase visits to stores
No Change at all
Decrease visits to stores
When compare to PC, I
would like to browse
eCommerce site on mobile
When compare to PC, I spent
longer time to browse
shopping sites on mobile
When compare to PC, I make
purchase decision faster on
mobile
I prefer mobile shopping
experience more than PC

Idle time intervals make it more convenient for mobile users to shop. They can shop anytime and anywhere when a network
is available. Leveraging QR code promotions on public transports, or in-store product comparisons, can further stimulate
consumers’ impulse purchase decisions.
For some internet users, mobile starts to replace PC when they shop online. Over 80% of them will shop via mobile when
they are resting at home, and over 60% of them go for mobile shopping when there is no access to PC.
-
-
Resting at home
Before bedtime
After meals
No access to PC
Traveling
Working/ Studying
Early morning
Waiting
Having meals
100%80%60%40%20%0%
China Mobile Shopper Behavior – Shopping Scenarios1.2.3
Scenario for China internet users to shop via mobile in 2013
11
20.0%
13.3%
20.0%
26.7%
40.0%
46.7%
53.3%
60.0%
86.7%

Mobile shoppers purchased a large variety of goods/services. Both virtual and physical products are amongst the most
commonly shopped categories in mobile shopping.
The changing consumer behavior has had a significant impact on traditional business models and is a key factor behind the
increasing trend of O2O business.
-
-
12
Source: InMobi, “2014 China mobile internet users insight report”, 2013.12
China Mobile Shopper Behavior – Preferred Products1.2.3
Products purchased by China mobile shoppers
60%50%40%30%20%10%0%
Physical products
(fashion, consumer prodcuts)
Virtual products
(app, game, e-book, videos, ringtone)
Finance related
(bill settlement, P2P payment)
Entertainment
(movie tickets)
Travel
(flight, accomodation)
51%
45%
30%
26%
19%
Tried mobile
shopping

Preferred Products
1.3.4 Demographics of China Outbound Online Shoppers/ Where Do the China
Outbound Online Shoppers Come From?
14

Online overseas retail transaction reached RMB76.7 billion in 2013. The projected growth rate is over 100% in 2014,
reaching RMB154.9 billion by the end of the year.
There are 2 types of outbound online shopping transactions in China: 1) Users who order directly from the eCommerce sites
of overseas brands; 2) Users who order from local buyers/agents, who will then ship the products to China, commonly known
as “DaiGou”.
-
-
Outbound Online Shopping Increased Rapidly1.3.1
2014e20132012201120102009
150
100
50
200
0
154.9
76.7
48.3
26.5
12
5
14
2009 - 2014 China out-border online shopping transaction (billion Yuan)
Source: 100EC, “2013 China online retail market insight report”, 2014.3

The top 3 reasons for China online shoppers to purchase overseas are competitive prices (high taxation in China, especially
luxury goods), product quality and the scarcity of products.
-
Product Scarcity
Product quailty
Competitive price
More variety
Better service
Recommended by friends
Security
Easy to "Click & Buy"
Easy to refund/ return
Others
Better logistic service
50% 60%40%30%20%10%0%
Source: iResearch, “2012-2013 Cross-border e-commerce report”, 2013.9
Reasons for Outbound Online Shopping1.3.2
Reasons for China online shoppers to shop overseas in 2013
2.7%
2.0%
2.9%
3.8%
5.5%
5.7%
6.0%
8.2%
21.2%
21.8%
20.3%
19.4%
2.3%
22.9%
23.6%
26.2%
30.4%
31.8%
34.5%
52.0%
50.6%
50.3%
15
Main reason (Single choice)Reasons (Multiple choices)

Due to the concerns in price and quality, fashion, personal care and baby products are the most in-demand product
categories amongst the online shoppers making outbound purchases
Brands in these industries should keep an eye on the market opportunity to meet the demand of the consumers
-
-
20%10%0%
Digital products 7.7%
IT products 9.4%
Baby products 12.6%
Fashion 16.0%
Personal care 12.9%
40%30%20%10%0%
16
Popular Products of Outbound Online Shopping1.3.3
Books & Music 5.8%
IT products 6.0%
Household goods 7.3%
Fashion 37.8%
Vitural card 11.4%
Top 5 items purchased online in China Top 5 Items purchased online overseas

Age of China online shoppers in 2013
( shop in China & Overseas )
Above 51
41-50
36-40
19-24
Under 18
31-35
25-30
40%30%20%10%0%
15.7%
0.6%
39.7%
25.3%
10.9%
6.8%
1.1%
16.2%
0.9%
33.3%
24.3%
12.2%
10.3%
2.8%
Shop OverseasShop in China
The majority of online shoppers in China are aged between 25 to 35, while outbound shoppers are more affluent. Over 80%
of outbound shoppers are aged 35 or below, with income mainly between RMB3,000 to RMB5,000.
-
Demographics of China Outbound Online Shoppers1.3.4
17
30% 40%20%10%0%
Income of China online shopper
( shop in China & overseas ) in 2013
5.0%
2.8%
6.9%
18.0%
30.9%
2.3%
1.3%
3.4%
9.2%
25.3%
No income
Under 1,000
1,000-2,000
2,001-3,000
3,001-5,000
18.3%
8.7%
6.8%
1.8%
0.8%
23.2%
15.6%
13.4%
4.0%
2.3%
5,001-8,000
8,000-10,000
10,001-20,000
20,001-50,000
Above 50,001
Shop OverseasShop in China

Most of the online shoppers who purchase overseas are living in Tier 1 cities in China, like Beijing (12.2%), Shanghai
(13.2%), Guangzhou (14.1%), etc.
However, recently a new trend has emerged that shows more and more online shoppers are coming from Tier 2 cities or
below, accounting for nearly 30% of the total outbound online shoppers population.
-
-
Guangdong
Beijing
Jiangsu
Shanghai
Shandong
Fujiang
Heibei
Zhejiang
15%12%9%6%3%0%
18
3.7%
4.0%
5.2%
7.2%
9.2%
12.2%
13.2%
14.1%
Where Do the China Outbound Online Shoppers Come From ?1.3.4
Top 8 cities of China outbound online shoppers

Recommendations for Brands & Marketers
19
Foreign brands should make products available in China ASAP
Brands should closely study the dynamically evolving shopping behaviors of the users, with particular focus on
products that are currently not available in China, before DaiGou agents identify and cash in on the opportunities
Mobile marketing can also be a helpful push for O2O business
Mobile apps or mobile site are essential to encourage customers to interact with the brand while they are shopping,
for example, scan QR codes to find out more about the products or mobile site for product comparisons
Do not fully rely on physical stores, especially when some cities cannot be reached out to
Cooperate with renowned eCommerce sites and build a branded channel to reach a larger group of target customers
Timely offers are crucial for newly established online retail businesses to generate traffic.
Set up your own branded eCommerce site; expand business from
offline to online
To conclude, the China online retail market is growing at a rapid pace. Nearly half of the internet population are online
shoppers. They like to make use of the idle time intervals and surf on eCommerce sites. This game changing behavior is a
very important lead for O2O business. To help brands better assess the potential and the changing market scenario, iClick
would recommend:

personal care &
beauty industry
online retail update
Part2iscomingsoon...

Thank you
Website: i-click.com
Official Weibo: Weibo.com/iclickasia
E-mail: sales_cn@i-click.com
WeChat: iClick_China
The content and the conclusions in this report represent the Company's viewpoint only. The content is intended to be accurate
and reliable. However, the Company does not guarantee the accuracy and completeness of both the content and the citations.

China Online Retail Market Analysis

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (20)

Semelhante a China Online Retail Market Analysis

Semelhante a China Online Retail Market Analysis (20)

Último

Último (20)

China Online Retail Market Analysis