Chinese e-commerce spending is expected to surpass what is spent online in the U.S in 2013, says the 2013 edition of Bain & Company’s annual “China E-commerce Report” based on a survey of over 1,300 shoppers spread across China.
In 2012, Chinese consumers’ e-commerce spending has risen to RMB 1.3 trillion. This is expected to continue on a trajectory of 32 percent average annual growth, reaching RMB 3.3 trillion by 2015, the report said.
In addition, in just two years, China e-commerce spending will be 50 percent more than that of the U.S., Bain & Company said.
“While surpassing the U.S. is a major milestone for e-commerce in China, the key finding in our report is that there’s no longer a meaningful distinction between retailers’ brick-and-mortar, Web, and mobile strategies,” said Serge Hoffmann, partner in Bain’s Retail Practice in China and co-author of the report.
Half of Chinese shoppers now do a thorough research online before they purchase them in stores. Two thirds of shoppers rely on smartphones to browse or buy products. Customers are attracted to online stores mainly because they can buy products at cheaper rates online.
The report says while most revenue growth over the past three years has come from existing shoppers, now more than half of new sales will come from new consumers. Digital penetration has reached six percent of retail value in China overall as high as nine percent in Tier1/Tier2 cities
In select categories, digital penetration has shown sharp increases in the past two years. The rate is three to four times higher in cosmetics, apparel, and consumer electronics, and six times higher in books.
There is significant shift in China’s e-commerce evolution and adoption. To take advantage of this trend, omnichannel players should build a dedicated digital team, develop a world-class website, expertly manage assortments and price and develop a seamless cross-channel experience.
“Brick-and-mortar retailers need to act quickly and thoughtfully to marry offline and online strengths,” said Bruno Lannes, head of Bain’s Retail Practice in China and co-author of the report. “Otherwise, they risk becoming irrelevant over time as pure-play e-commerce takes hold.”
