aNewDomain.net — China is now ranked number 1 in the e-commerce market, recently overtaking the United States as top purchasing dog. According to the ranking, the Chinese buy more stuff online than Americans do. And the U.S. is now No. 2.
As Avis car ads used to say: “We Try Harder.” That’s what No. 2 firms do. Supposedly. Will the United States step up?
Of course, when it comes to market share based on individual sales, size certainly matters. American business might be perceived as super innovative and disruptive, but the power of retail goes to those with numbers.
As of now, it is the BYOD (bring your own device) generation in China that drives the trend for growth. See the infographic below for the facts.
China’s domestic growth has surged and will continue. The country is also looking beyond its own shores. Businesses such as Amazon and eBay need to watch their rearview mirrors. China has huge ambitions in the overseas markets. Amazon and eBay, among others, are seen as rivals in the competitive, growing e-commerce trend. Alibaba for example is moving fast ahead.
The Chinese are still a ways from global prominence — primarily they would need to build their own logistic centers around the world. The U.S. global strategy has its current advantages, but that will not last forever. Especially as China still has room for growth and such a large national population. Considerations such as trust in quality and pricing will play an equal role in this tough fight for global e-commerce markets.
X and Y Generations
The X and Y generations of China regard the Internet as if it were one giant shopping mall. The Future of Commerce said:
49 percent of its population made an online purchase last year. This figure is set to rise to an unprecedented 71 percent by 2017. The Chinese e-commerce market is predominantly young, with 60 percent below the age of 30, and affluent; spending is highest in China’s tier-one cities and those earning more than 5,000 Yuan a month are more likely to buy online.
It is also a market dominated by mobile devices, with 464 million of its 591 million internet users choosing to go online via a smartphone. Baidu is China’s most prominent search engine and it currently holds almost two thirds of the market share. Google is far less popular in China and only has a meagre 2.88% market share, down from 15.7% in 2012. Like Google, Baidu rewards sites that offer the user high quality content, a great experience and original, useful information.”
White Hot Market
With an incredible amount of money at stake, companies that have not centered on e-commerce have begun to expand their services to include digital marketplaces and payments platforms. Consider the best e-commerce platforms as well. A reporter at the Business Insider Australia writes:
Most recently comes the announcement that Chinese consumer Internet giant Tencent has paid U.S. $215 million for a 15 percent stake in JD.com (formerly known as 360Buy), China’s second-largest e-commerce company by transaction volume. Tencent will get an additional 5 percent stake in JD.com after the company files for an IPO.”
China Cracks down on Mobile payments–Update from FT 14/3/2014
China has ordered a halt to mobile phone payment systems and virtual credit cards, in a move that will slow the rapid development of online finance in the country. Just two days after Alibaba and Tencent launched virtual credit cards, the central bank has ordered a temporary halt to this line of business, according to local media.
The following facts, taken from Alibaba’s infographic below, are:
- China had 591 million Internet users as of August 2013
- 464 million of these used smartphones and other wireless devices to connect to the Internet
- China’s e-commerce market has grown 71 percent annually since 2009
- Third-party payment companies Tenpay and Alipay account for 67.8 percent of online payments in China
- Baidu, China’s most-popular search engine, has a 63.16 percent market share.
For aNewDomain.net, I’m David Michaelis.
Based in Australia, David Michaelis is a world-renowned international journalist and founder of Link Tv. At aNewDomain.net, he covers the global beat, focusing on politics and other international topics of note for our readers in a variety of forums. Email him at DavidMc@aNewDomain.net.