Things move fast in China when it comes to ecommerce, cashback, mobile and new technology. Welcome to our latest update on the world’s biggest market. Last month’s Singles’ Day sales of more than $9 billion set a record for Alibaba and many other retailers did record business online in China as well. Founder Jack Ma expects new products and services, cross-border shopping and more innovations next year. McKinsey consultant Jonathan Woetzel explodes five myths about doing business in China and tells why he is optimistic about the future. SocialBrandWatch profiles five successful e-commerce/technology companies you should know about in China including Xiaomi, Meituan, VANCL, me and Koudai. SocialBrandWatch provides an interesting then-and-now look at the dynamics of online shopping in China.
Who are the newest banks in China? Those would be new startups owned by e-commerce companies Alibaba, Baidu and Tencent. Owned by Tencent, WeChat is China’s massive messaging app with more than 600 million active users and we have 20 ways they are using it in everyday life from shopping and banking to gaming and more. Sales by Chinese merchants on Amazon.com in the US have doubled in the past year. Mark Mobius writes that China consumer’s appetites for luxury goods including cosmetics and music is growing strongly. But some international brands are retrenching in China such as Louis Vuitton which closed several retail stores recently.
How Alibaba’s annual shopping festival is revolutionizing e-commerce
Alibaba’s Singles Day is revolutionizing the way hundreds of millions of Chinese consumers shop online, and the group’s founder is hoping this year’s event will do the same in global markets. The world’s largest 24-hour online shop-a-thon kicks off at midnight on November 11. More than 30,000 brands will take part, offering heavy discounts, sales and other promotions.
Last year’s event, also known as 11.11, generated over US$9 billion in gross merchandise volume (GMV) – more than the combined value of the United States’ Black Friday and Cyber Monday. For executive chairman and founder of Alibaba Group, Jack Ma, this is a day to test new ways of bringing businesses and consumers together from anywhere in the world. Via m.clickz.com
Five myths about the Chinese economy
A widely held Western view of China is that its stunning economic success contains the seeds of imminent collapse. This is a kind of anchoring bias,1 which colors academic and think-tank views of the country, as well as stories in the media. In this analysis, China appears to have an economy unlike others—the normal rules of development haven’t been followed, and behavior is irrational at best, criminal at worst.
There’s no question, of course, that China’s slowdown is both real and important for the global economy. But news events like this year’s stock-market plunge and the yuan’s devaluation versus the dollar reinforce the refrain, among a chorus of China watchers, that the country’s long flirtation with disaster has finally ended, as predicted, in tears. Meanwhile, Chinese officials, worried about political blowback, are said to ignore advice from outside experts on heading off further turmoil and to be paranoid about criticism. My experience working and living in China for the past three decades suggests that this one-dimensional view is far from reality. Doubts about China’s future regularly ebb and flow. In what follows, I challenge five common assumptions. Via mckinsey.com
The Startup Companies to Watch Out for in China
There are several startup companies in China that people need to be watching, as they could be the next best thing in the Chinese market. Several of these companies are known by those who take an interest in China business. However, they are expanding into other markets, to ensure that they are going to be seen throughout the globe….
Though these companies were once thought of as ideas that were never going to go anywhere. They have proven everyone wrong. They received financial backing from other companies, grew their presence online, and started to integrate with Chinese consumers. They are examples of how successful startup companies can be when they are in China. Via socialbrandwatch.com
Online Shopping In China Then And Now
Online shopping did not appear overnight in China, it has been a market that has been developing rather rapidly over the past ten years. A new report has been released that is comparing the shopping habits of Chinese consumers online from ten years ago to the shopper habits that are being seen now.
One of the most notable differences that was seen was that ten years ago, Chinese shoppers often shopped via online stores that were centered out of Hong Kong and Macao. Today, we are seeing more Chinese online shopping trends that are getting products from all over the world. Namely, Chinese consumers are buying from North America, Japan, South Korea, Europe and South Africa. What has caused this change? The introduction of Alibaba’s Tmall, as well as the introduction of JD.com, have made it easier than ever for overseas vendors to sell their products to Chinese consumers. Via SocialBrandWatch
Alibaba, Baidu and Tencent and Their New Online Banks
A new breed of online banks promoted by tech companies like Alibaba and Tencent is taking root. Will they be able to hold their own against traditional banks?
To boost the economy and help small and medium enterprises get capital more easily, the Chinese government is encouraging non-government entities to invest in financial institutions, even allowing private companies to open their own banks. When the government announced its decision to grant five banking licenses for private banks earlier this year, the big three tech companies – Tencent, Alibaba and Baidu – jumped at the opportunity. Tencent, the company behind the popular WeChat social media app, was the first to take the plunge. On January 18, 2015 it launched WeBank, the country’s first online-only bank. Via knowledge.ckgsb.edu.cn
20 amazing things that Chinese people do in WeChat
We all know by now that WeChat is a messaging app – and that it’s huge. And we know that stickers are a big part of it. But there’s so much more to WeChat that it can be difficult to convey to someone who’s not familiar with the full range of things that people in China now use it for – both baked-in features and stuff that other companies are building inside the messaging app.
That’s why WeChat is now used daily across China for in-store payments, online shopping, transportation, and dozens of other things. If you live in China, you could realistically use no other app but WeChat all day. Welcome to the WeChat universe. Via techinasia.com
Amazon helps Chinese merchants double their sales on Amazon sites in 2015
U.S. sellers on Amazon.com Inc.’s marketplace have taken note of the growing number of Chinese companies offering their wares on Amazon.com, often at low prices. It’s no accident: Amazon is actively encouraging Chinese merchants to sell on its sites, and recently unveiled new services designed to increase the selection of Chinese goods available on Amazon sites around the world.
Amazon introduced its Global Store initiative three years ago to Chinese merchants, initially facilitating their sales on Amazon.com in the U.S. Amazon subsequently expanded the program to include 10 of its 14 global sites: the United States, Canada, France, United Kingdom, Spain, Italy, Germany, Japan, Mexico and China. Not yet participating are Amazon sites in Brazil, Australia, the Netherlands and India.
Chinese retailers have taken advantage of the program to increase sales, Amazon executives reported last week at the company’s annual meeting with Chinese sellers in Guangzhou, China. They said Chinese companies’ sales on Amazon’s marketplaces around the world doubled in 2015 compared with 2014. And they said Chinese merchants’ sales increased more than tenfold on Amazon.com. Amazon did not provide dollar figures for those sales. The top-selling products for Chinese sellers are in wireless products, apparel, computers, home decor and outdoor products, Amazon says. Via internetretailer.com
China’s future looks bright
There has been great concern regarding the slowdown of growth in China and its impact on commodity demand and, therefore, commodity prices. Crude oil’s price gyrations tend to get the most attention, but China’s share of global oil consumption is about 12%, which is significant but less than that of the United States. One could argue that Chinese demand patterns likely have played an even greater part in influencing prices of many other commodities where China holds an even larger share of global consumption.
China’s share of global grain consumption was around 22% in 20142 and its share of global metal consumption tripled from 13% in 2000 to 47% in 2014.3 China is a key consumer of aluminum, nickel, copper, zinc, tin and iron ore. Of course, China isn’t only a consumer of raw commodities—its growing middle class has been exerting formidable purchasing power and spawning new domestic industries that are of keen interest to us as investors, including cosmetics, entertainment (cinemas, music) and more. Via businessinsider.com
Just why are Louis Vuitton and other high-end retailers abandoning China?
A few weeks ago, La Perle lost one of its biggest tenants: Louis Vuitton. The French luxury retailer closed its store on the ground floor saying it would not renew its expired lease. This followed the shutting down of the two other LV stores in the northeastern city of Harbin, in Heilongjiang province, and the western city of Urumqi, the Xinjiang capital.
The brand said the closures were part of a marketing strategy adjustment by headquarters. It’s a strategy that appears to have been taken on by many other international luxury brands. Via scmp.com
Mobile commerce ahead…
Did you enjoy this update on China? Let us know what other countries you would be interested in and we will profile them in the near future. Join us tomorrow for a look at mobile commerce, mobile marketing and e-commerce trends.