SHANGHAI--(BUSINESS WIRE)--E-commerce spending by Chinese consumers has risen to RMB 1.3 trillion in 2012 and will surpass what is spent online in the United States in 2013. It is expected to continue on a trajectory of 32 percent average annual growth, reaching RMB 3.3 trillion by 2015; this according to the 2013 edition of Bain & Company’s annual “China E-commerce Report.” In addition, in just two years, China e-commerce spending will be 50 percent more than that of the U.S. Findings were released today at a press conference in Shanghai.
“If you’re not reaching Chinese consumers seamlessly across all of these channels, you’re missing out on a major growth opportunity.”
Bain’s report includes a survey of over 1,300 shoppers spread across China in large and small cities, and across age, education, and income levels. The survey explores the relationships between online and offline shopping and shows that for many consumers the boundary between shopping experiences is blurring.
“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. “If you’re not reaching Chinese consumers seamlessly across all of these channels, you’re missing out on a major growth opportunity.”
Other key findings from the survey and report include:
- Half of Chinese shoppers now research products and prices online before they purchase them in stores
- Two-thirds of Chinese shoppers overall now rely on smartphones to browse or buy products. And the number is nearly three-fourths for upper-income consumers
- More than 60 percent of shoppers say that a retailer’s e-store will increase their spending at the same retailers brick-and-mortar store
- Lower price is stated as the single most important reason that drives consumers to shop online, by almost half of shoppers
- 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
The report finds a significant shift in China’s e-commerce evolution and adoption. Bain provides five key success factors for omnichannel players to master this new environment:
- Invest early. Leaders stay ahead of the curve by having a clear vision and strategy to either grow organically or make key acquisitions. Most successful brick-and-mortar retailers take about two years to scale up their digital businesses, but it is a period of rapid change
- Build a dedicated digital team. A successful team incorporates digital capabilities into different functions. It is typically a separate team at first, with a highly entrepreneurial culture
- Develop a world-class website. The site must be strong enough to win new consumers and earn their loyalty. Companies should not try to do it alone, but rather work with third-party website developers to speed the process
- Expertly manage assortments and price. Pricing and merchandising are essential tools for retailers to differentiate themselves from pure-play e-commerce sites. A mix of special online-only products and identical products keeps each channel interesting to consumers
- Develop a seamless cross-channel experience. Winners create an enriched shopping experience by integrating their online, mobile and social-media presence and taking full advantage of their stores
“Brick-and-mortar retailers need to act quickly and thoughtfully to marry offline and online strengths,” concluded 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.”
Editor’s Note: For a copy of Bain’s “2013 China E-commerce Report” report or to schedule an interview with Serge Hoffmann, please contact Cheryl Krauss at email: email@example.com or +1 646-562-7863, or Frank Pinto at email: firstname.lastname@example.org or +1 917-309-1065. Members of the Chinese media should contact Pinky He at email@example.com or +86 21 2211 5585.
About Bain & Company, Inc.
Bain & Company, a leading global business consulting firm, serves clients on issues of strategy, operations, technology, organization and mergers and acquisitions. The firm was founded in 1973 on the principle that Bain consultants must measure their success by their clients' financial results. Bain clients have outperformed the stock market 4 to 1. With 50 offices in 31 countries, Bain has worked with over 4,600 major multinational, private equity and other corporations across every economic sector. For more information visit: www.bain.com. Follow us on Twitter @BainAlerts.