Despite European and other Western economies establishing Ecommerce channels much earlier than their Chinese counterparts, the scale of consumption via shopping online in China exceeds the western markets. To understand the Chinese consumer behaviour trends to Ecommerce must be assessed.
Delivering your products and services to the right place with an appealing format for retail brands in China has been a strategic nightmare due to the required need of many individual varying regional strategies. The diverse consumer behaviour habits of the regions is often cited as the explanation to China’s Ecommerce exceeding any other nation. Whilst Ecommerce amounts to just 11% of retail sales in China, sales on Alibaba’s Taobao and Tmall platforms exceed the top 100 retailers in revenue.
The theory that the practicality of shopping online is driving China’s Ecommerce growth can be considered to have greater influence in the rural parts of the country. There are now 187.4 million rural citizens using the internet, now accounting for 28% of China’s online community. Due to a lack of established store fronts and appealing shopping malls, which are common place in China’s urban landscape, the rural consumers have the same range of products accessible to them on their phone or PC as a large shopping mall could deliver.
Another explanation to the increased adoption of Ecommerce purchasing is that the paralleling increase in internet usage on mobile in China is enabling consumers to be able to use Ecommerce to shop on the go. The Chinese Government has invested significantly in facilitating the required infrastructure facilities in order for internet usage to be available and wide spread across mainland China. A staggering 86% of China’s internet users access the internet via mobile device regularly. This is such a large proportion of users that it exceeds the USA at 75%. Having the internet on your mobile means that many consumers will buy retail products in environments, such as a train to and from the work commute, which they would have never purchased in without their internet using mobile device. Whilst Ecommerce has excelled greater In China than western markets before smartphones were widely available, that does not discount the fact that internet usage on mobile devices in China is contributing to the gap in trends between China and the west when it comes to utilising Ecommerce channels.
Though there is significant resemblance between Western and Chinese Ecommerce platforms, in example Amazon and Alibaba, Ecommerce payment trends are much different in China. Unlike how you would typically pay using Mastercard or Visa on Western Ecommerce platforms, the Chinese use their own alternative Unionpay. The growth in the usage of debit and credit cards is significant to the continuing success of Chinese Ecommerce as the total spend using card transactions was $6.8 trillion in 2014. The emergence of credit cards in China is a noteworthy driver of increasing Ecommerce sales in China. Despite only 9% of China’s bank transaction cards being credit cards as opposed to the 91% being debit, credit cards have grown by 43.3% in 2014. Credit cards enable consumers to purchase before they can initially have the money to afford the expenditure. This will complement the spur of the moment purchases, thus increasing the expenditure on Chinese Ecommerce platforms.
Whilst the Western platforms were the innovators of Ecommerce, the Chinese are certainly no laggards with their own channels. With China’s Ecommerce revenue exceeding every other nation, policies by the Chinese government such as the mass investment of internet infrastructure and the culture of wide spread adoption of the Ecommerce platforms available in mainland China can be seen as the driving force to China’s unrivaled in size and still growing Ecommerce market.