iResearch, a provider of market data to Chinese internet juggernauts Alibaba and JD.com, has released a report on Chinese online retail growth and its implications for the Australian market.
iResearch Consulting Group, an independent authority on China’s internet industry, has released a new research report that provides unique insights into the explosive growth of China’s online population with important lessons for the Australian retail sector.
The 2015 China Banking E-commerce Industry Report highlights the huge scale of China’s e-commerce and online banking sectors underpinned by a vastly growing base of web users in the country.
Some of the reports key findings include:
- China’s internet population is now 649 million, eclipsing the US (277 million) and more than 50 times Australia’s internet population of 12.7 million*ABS
- E-commerce in China is now a RMB12.3 trillion (AU$2.6 trillion) industry exceeding Australia’s Gross Domestic Product (AU$2.02 trillion)
- Chinese shoppers are moving online, spending more than RMB2.8 trillion annually online
- The number of credit and debit cards in China now exceeds 4.94 billion, providing a significant impetus to the growth of e-commerce. Australian online retail is slowing while China grows apace
China’s online population is more than 50 times Australia’s internet population of 12.7 million*
While online retail in Australia continues to grow, the rate of growth has slowed dramatically according to recent NAB research. By contrast, iResearch’s latest report reveals that online retail in China continues to experience inexorable growth, exceeding RMB2.8 trillion in gross value, a 48.7 percent jump on the prior year.
According to iResearch, several key factors are driving this growth, underpinned by the inexorable growth of China’s internet population which now numbers more than 649 million. More significantly, 86 percent of these (more than 557 million) are now mobile while in Australia only 67 percent of internet users (approximately 8.3 million people) are mobile.
While Australia’s online shopping market is comparatively mature, China is having greater success in encouraging Chinese shoppers to transact online. Online shopping in China represents 10.7 percent of overall shopping for consumer goods, compared to 6.9 percent in Australia.
By contrast, Australia’s online retail sector is slowing with the latest NAB Online Retail Sales Index showing that Australia’s online retail market expenditure has stagnated; sparking concerns that online retail is going the way of bricks-and-mortar.
The Australian mobile retail market – valued at $4.9 billion – has experienced far more modest growth than China, however, with online retail flagging, it seems a similar shift towards m-commerce could prove to be one viable solution for Australian retailers.
M-commerce provider 99 Wuxian owns and operates a platform embedded within the mobile applications of China’s leading financial institutions and aggregates over 300 million consumers and leading merchants. In less than four years the company has seen registered users grow to more than 43 million, with Au$1.5 billion in transactions in the last financial year.
Power Retail asked CEO of 99 Wuxian, Amalisia Zhang, what advice she would give Australian retailers in light of the growth in m-commerce in China:
“The first point would be to develop a comprehensive understanding of the market opportunity as it presents and be prepared to act without hesitation. In China, the take-up of mobile commerce by smartphone users happened a lot faster than many expected, creating a boom for the mobile internet companies such as 99 Wuxian that adapted first.
“These companies have been successful in establishing a strong market position in the RMB 929.7 billion mobile shopping market, which grew 239.3 percent in 2014.
“For any retailers considering entry into mobile commerce, I would emphasise the importance of conducting thorough market research in getting to know the market and customer behaviour. Understanding the needs of your customers and ensuring you address those needs is critically important. In the world of m-commerce and online retail, competition is so fierce that businesses that fail to understand their customers will struggle to thrive.
“It is also very important to identify and exploit opportunities for growth, such as the structural shift towards mobile internet we have experienced in China. From the outset, 99 Wuxian has been well positioned to capitalise on the growth of Chinese m-commerce once we identified and acted on this shift. Having first mover advantage has been critical to our success, as have proper cost control measures and a highly targeted sales model.
“I also believe strongly in the importance of partnering with the right organisations, particularly in the early stages of a business’ life. The success of the 99 Wuxian marketplace, growing from an unknown to a major player in the Chinese m-commerce market after only three and a half years, has been due in large part to the quality of business partners and merchants we have chosen to work with.”