Commentary on E-Commerce in China: Driving a New Consumer Culture

China is becoming a global e-commerce leader. This article “E-commerce in China: Driving a new consumer culture” breaks down China’s explosive e-commerce growth within B2C and C2C arenas. It also introduces that local platforms, social media and mobile devices, as the important roles, are fundamentally re-shaping Chinese consumers’ behavior.

Based on the KPMG analysis of US and Chinese e-commerce data, from 2009 to 2012, e-commerce revenue grew topping 70 percent compounded annually; By 2015, e-commerce of total retail transactions in China are projected to hit USD 540 billion; and by 2020, China’s e-commerce market is forecasted to be larger than those of the US, Britain, Japan, Germany and France combined. Although two local purchase platforms including Taobao (C2C site) and Tmall (B2C site) dominate Chinese e-commerce market, the above data indicates that China’s market is large enough for other competitors and niche players to thrive. There are two critical factors that facilitate the growth of e-commerce in Chinese market: the exponential increasing of internet users and the rapid development of payment system and physical delivery mechanisms. This implies that the future development of China’s e-commerce channel is closely linked to the behaviors of Chinese consumers and technology developments.

The article well explains the trends that social media platforms have integrated into the life of Chinese e-consumers and mobile devices have become an increasingly crucial element in China’s e-commerce arena. China’s large and growing middle-class have become accustomed to making frequent e-commerce purchases. This population is not only incredibly large, but also highly diverse, in terms of consumer behavior. Therefore, as the e-commerce market in China matures, businesses must develop more sophisticated strategies to influence and reach target customers. To be more specific, marketing strategies should differentiate in terms of geographic area (tier of cities), product category (fashion, electronic item, food and etc.), method of influence (key opinion leader, advertorial and etc.), and consumer sensitivity (brand, quality or price sensitivity). A thorough understanding of the target market, how consumers evaluate and purchase products, and how they prefer to utilize technology in the local market will help businesses succeed in China’s competitive e-commerce market.

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