Cashback News – Mar 18: What’s the news and chatter about China e-commerce?

China ecommerce booming

China ecommerce boomingPost-Chinese New Year and following the economic downturn in 2015, there’s been a lot of new chatter about e-commerce in China. We’ve got a comprehensive roundup of recent developments, research, news and insight to keep you up-to-date. China’s 100 million foreign travelers are reshaping global luxury retail marketing strategies. Vogue will start streaming fashion news via What’sApp and China can expect a WeChat (WeiXin) version soon.  A scheduled 12% average tax increase on imported products could make sales challenging in price-sensitive China., China’s second-largest e-commerce store, finished 2015 with more than $71 billion in sales. Alibaba posted sales of $430 billion. That’s how big the China market is! Alibaba financial arm Ant Financial will provide US$154 million to “support” college grads who want to return to their rural hometowns and set up ecommerce businesses. Jack Ma lays out Alibaba’s tough new strategy in the war on fake products. China’s new real-name delivery rules are an absolute joke according to many. Of course it’s not all positive as Rocket Internet-supported food delivery company HeroDelivery discovered when new competitors forced it to withdraw from China.

Consider what happens online in China every minute: 395,833 login on WeChat; 625,000 Youku Tudou videos are viewed; 64,814 post or repost on Weibo; 4.2 million search queries and 120,833 apps downloaded on Baidu; 774 items are purchased on Alibaba’s Taobao and Tmall; and $1.13 million is spent on Alibaba with $771,080 of that on mobile. In a word – massive!

How China’s 100 million travelers are reshaping global retail marketing strategy tourists make more than 100 million overseas trips a year, but marketing to this lucrative group starts long before they leave China. Clever brands are engaging sophisticated activations through popular social app WeChat in the average four to six-week research period prior to travel and then retargeting travelers once they arrive at their international destinations.

Marketing to this unique consumer group is not new – but the changing characteristics of the Chinese traveler is. It is now essential that a marketing plan incorporates a personalized digital strategy customized to the young, digitally savvy and independent Chinese traveler. Via

Vogue to Provide Digital Fashion News has announced it will stream news of ‘all things fashion’ through a Whatsapp group, expect a WeChat version for China’s fashion hungry.

Vogue has become active on becoming a fashion news channel online and through digital platforms. Recently, the publishing house partnered with fashion icon Alexa Chung to create the online documentary series “The Future of Fashion” as part of a Vogue Video offer. Following the organic success of video site Vice, Vogue is positioning itself as the broadcast sheet of fashion news and trends. Via

New import taxes could hurt China’s overseas ecommerce market

Taxes rising in ChinaIf you’re a China-based reader who enjoys buying imported products online, you might want to grab up the rest of your wish list right now before the price goes up. Rumors of an April tax hike on global ecommerce imports have been swirling in the industry for a few days now, and while no new policy has been officially announced, companies like Mia (a maternity products ecommerce site) say they’ve received preliminary notifications from China’s customs authorities.

Supposedly – and again, these numbers aren’t officially confirmed – the new rules would see both hikes and cuts across different product categories, so some companies would be worse off than others. Maternity/child products and food, for example, would reportedly be seeing an 11.9 percent tax hike. And makeup products worth less than US$15 would see a massive 32 percent tax hike. But other categories, like makeup worth more than US$15, would actually see cuts.

Still, if the hikes go through, it could be a tough adjustment for some consumers. Buying imported maternity products, for example, is extremely common in China – mothers want the best for their kids and believe foreign goods to be healthier and safer. But a nearly 12 percent import tax hike would significantly impact the price of those goods. Via

Ecommerce is so huge in China that even the 2nd biggest store saw $71b in purchases last year had US$71.6 billion in salesYou know ecommerce is insanely huge and fully ingrained in daily life in China when the country’s second largest online store booked US$71.6 billion in purchases in the past year. That’s the figure revealed today by JD, the closest competitor to Alibaba, in its newest earnings report.

Alibaba, which posted financials a few weeks earlier, is well ahead with a total of about US$460 billion worth of purchases on its Chinese shopping marketplaces in 2015.

JD now has 155 million active shoppers who collectively placed 1.26 billion fulfilled orders in 2015. JD, which differs from Alibaba in that it mostly ships items to shoppers from its own inventory rather than relying on a huge network of merchants, says that its 2015 expenditure tally was up 78 percent on 2014’s. The ecommerce firm, in which WeChat maker Tencent has a 20 percent stake, now has 155 million annual active customers, up from just over 90 million back in 2014. Via

Alibaba partners with Communist Party group to teach teens rural ecommerce

AlibabaStrengthening ecommerce in rural areas has been one of Alibaba’s goals for years now in helping to expand its domestic market. Now, Chinese official state media outlet Xinhua announces, the company has a new partner in that venture: the Communist Youth League.

According to Xinhua, Alibaba will work with the Communist Youth League to train one million teenagers on how to bring ecommerce into rural areas. Funding will also be available; Alibaba financial arm Ant Financial has set aside US$154 million to “support” college grads who want to return to their rural hometowns and set up ecommerce businesses. (It’s not clear whether that money will distributed in loans, grants, or some combination of the two).

In cities, there is increasingly strong demand for clean, fresh-from-the-farm foodstuffs. 45% of China’s population – some 600 million people – still live in the countryside, and ecommerce has spread there far slower than it has in China’s cities. There are a number of reasons including logistical challenges (some rural locations are difficult to ship to) and lower computer and internet usage rates. At present, in many Chinese villages “ecommerce” is a physical shop you can go to set up by an ecommerce company (like Alibaba or JD) that will help you buy and sell products online without needing internet access, your own epayment account, or any real computer literacy. Via

Jack Ma lays out Alibaba’s brutal new strategy in the war on fake products

Jack MaCould this be the year that Alibaba finally gets a handle on the fake products available on its sites?

Jack Ma thinks so. The sometimes-elusive Alibaba founder popped up at an anti-counterfeit team meeting recently to enable and inspire. “In 17 years I’ve never missed any meeting relating to our anti-counterfeit team,” he said, “and I never will.” But he wasn’t just offering words. Ma promised that the anti-counterfeit team will have access to an unlimited budget and unlimited manpower.

With that money and manpower, Ma wants the team to change its approach. “For so many years,” he said, “we’ve been using traditional methods and measures to fight fakes, but the harder we fight, the more pop up. Today it’s time to let an internet company try and use the internet’s methods like big data technology to solve the problem.” The goal is to stop fighting reactively. Instead, Ma wants to go on the attack Tech in Asia – Connecting Asia’s startup ecosystem

Don’t worry, ecommerce vendors: China’s new real-name delivery rules are an absolute joke

New package delivery rulesAfter last year’s deadly “parcel bomb” explosions, Chinese authorities vowed to implement new, stricter rules on China’s package delivery services. Ecommerce firms and sellers initially worried that the new rules might slow delivery times. But after March 1, the first day a new set of rules went into effect for all delivery companies, there’s a bigger concern: the rules might not be making anyone safer at all.

The law that took effect on Tuesday is meant to ensure safety by requiring all packages to be inspected and requiring senders to verify their real names. That way they can’t send dangerous things through courier services without being easily traced, and if someone does send a bomb through a courier service, it should be easy to track down all the other packages they sent.

If the first day is any indication, though, China is still a long way off from that dream. A reporter at a Sichuan paper, for example, mailed snacks to Shandong using just his last name. He wasn’t asked for any ID, and his package wasn’t even inspected. In total, the reporter checked seven different delivery services, and only one asked for ID. At his final stop, he wrote “Tomato Stew” down as the sender’s name – delivery employees didn’t bat an eye. Via

Here’s what happens every minute online in China

One Internet minute in ChinaThere are nearly 700 million internet users in China, and they don’t let their connections go to waste. The country is a downloading, WeChatting, ecommercing powerhouse, and it has the statistics to prove it.

We sorted through the numbers put out by some of China’s biggest internet companies, and brought them down to scale. This is an internet minute in China. The country does in 60 seconds what some would only do over a day, week, or more. Not too shabby. Via

Beaten by newer startups, Rocket-backed DeliveryHero quits China

Rocket-backed-DeliveryHero-quits-ChinaDeliveryHero pioneered web-based food delivery in China way back in 2012, but that unravelled in the years to follow as local startups emerged and gained ground. Despite DeliveryHero getting funding from startup factory Rocket Internet, the Chinese site – called Waimai Chaoren, which is literally “Takeaway Superman” – discovered that its kryptonite was a new wave of aggressive and fast-expanding startups in China.

DeliveryHero squandered its early opportunity in China, expanding slowly.
Waimai Chaoren was soon soundly beaten, which brings us to today. “DeliveryHero has taken the decision to not continue investing in China,” said the German firm in a statement yesterday, as first reported by TechCrunch. That leaves the 400 staff in the Chinese startup in limbo. Via

Massive market, massive challenges, many opportunities

Massive pretty much describes every aspect of doing business in China wheher online or offline. Check in regularly as we update on news and developments in Chinese e-commerce, cashback, retail, mobile, logistics and VC investment.