Cashback News – Sept 23: China e-commerce news, trends and innovations

China ecommerce 2Today, we’re looking at e-commerce news and innovations in China. iResearch reported 2016 Q2 e-commerce sales reached $167.5 billion in China compared to $131.3 billion in Q2 2015. Mobile sales were an impressive 70.1% of sales. Spending online offshore by Mainland Chinese reached $17.9 billion in 2015 according to iResearch. 109 million outbound Chinese tourists traveled last year and they spent $229 billion in retail stores said market research firm GFK, with Korea, Thailand and Japan the most popular destinations in Asia.

With a market value that reached more than $261 billion in New York last week, Alibaba is now China’s largest company followed by  Tencent’s US$255.98 billion capitalization. More than 100,000 wines and spirits were offered on Alibaba’s Tmall in a new “Jiu Shui” or Wine Day festival. According to Decanter China, Alibaba did not disclose sales results, leading to speculation the promotion  was less successful than expected.

After retail sales dropped worldwide, Prada launched its e-commerce platform in China and will roll it out around the globe in two years. Ikea China reported sales of $1.76 billion, up 19.4% with more than 83 million customer store visits. It will launch a full e-commerce platform in China within weeks. Under Armour reported online sales in China were up 157% and it plans to open 120 retail stores in the next year.

New China mobile shopper activity and market share report by the rising local e-commerce powers such as Alibaba group, along with other B2C platforms, China has now become a pioneer regarding online shopping. To capture the dynamic changes, iResearch, a Chinese marketing agent, shared their observations on Chinese e-commerce market in a recent quarterly report.

As shown in the metric, although the online shopping industry in China decreased 21.5% in Q1 2016, compared with the previous quarter, it has seen a 14.9% rise in the latest quarter. It reached a level of 1117.8 billion RMB ($167.5 billion) online transactions in Q2 2106 (the sixth bar) from 759.4 billion RMB ($113.8 billion) in Q1 2015.

The data from iResearch reveals that over half of online purchases in China are being completed via smartphones since the second quarter of 2015. In Q2 2016, the percentage of mobile purchases reached 70.1% (the sixth blue bar). Via

Chinese cross-border eCommerce has peaked

E-commerce And Online ShoppingChinese cross-border eCommerce has reached a turning point, says new research from Oliver Wyman.

Spending online offshore by Mainland Chinese reached RMB 120 billion (US$17.963 billion) in 2015 according to iResearch, and is expected to grow more than 60 per cent, reaching 7 per cent of total Chinese eCommerce value by 2018.

However, Oliver Wyman warns increasing regulation may mean the industry has now reached an inflection point. “Chinese consumers are probably the most informed and digitalized in the world,” said Wai-Chan Chan, Oliver Wyman partner and author of the report. “As Chinese consumers travel abroad, they are increasingly aware of offline prices around the world….

The report, titled Shopping Without Boundaries found that one in five online Chinese shoppers made a purchase on cross-border eCommerce platforms in 2015, double the proportion in 2014. This represents more than 3 per cent of total eCommerce transactions in China including both B2C and C2C. Via

Where Chinese tourists are spending their shopping dollar

China shopperMainland China has become one of the main global suppliers of tourists, and that has paid dividends for retailers globally.

But as the Chinese are roaming further afield, Hong Kong and Macau retails have seen their sales dropping.

A fresh analysis from international market research company GFK shows China had 109 million outbound tourists last year… and they spent US$229 billion in retail stores. These statistics consolidate China as one of the main global sources of tourists, both in terms of number of trips and money spent while travelling internationally. Via

Alibaba Group now Asia’s richest company

Alibaba Group Binjiang campusAlibaba Group Holding has surpassed Tencent Holdings and China Mobile in market capitalisation to become Asia’s richest company.

Alibaba’s market value rose to $261 billion in New York last week, overtaking Tencent’s US$255.98 billion capitalization in Hong Kong on Thursday during a trading week shortened by a public holiday. China Mobile was the region’s third-largest company, valued at $249.38 billion.

Alibaba’s shares have risen 28.8 per cent this year to $104.64, making the owner of and Tmall eCommerce platforms the world’s 10th-largest company by value, according to Bloomberg data. The world’s five most valuable companies now gain their revenue from technology or the internet – Apple, Alphabet, Microsoft Corp, Facebook and Via

Alibaba: No sales figures from China wine festival has said 100 million people ‘took part’ in its 9/9 online wine shopping festival, but the company said it wouldn’t release sales figures.

The campaign began on 1 September and culminated on Friday 9 September on Alibaba’s Tmall website. Some analysts have speculated that the inaugural wine shopping festival failed to meet expectations, because Alibaba has decided not to release any figures.

‘We do not have any sales figures to share for 9.9 Wine & Spirits Festival,’ a spokesperson told Decanter. Via

Prada Asia heads online as sales slip

PradaThe Italian-headquartered, Hong Kong-listed luxury brand says its Asia-Pacific sales slumped 18 per cent on a constant currency basis in the first half of this year.

“The negative economic backdrop continued to impact performance in both Hong Kong and Macau, but signs of improvement have been visible since July across Greater China,” the company noted in its results….

CEO Patrizio Bertelli says the company will now make China, Hong Kong and Singapore its priorities in roll out its new eCommerce platform, which is expected to be global within two years. Via

Ikea Group China launching eCommerce trial

IKEA aapning Tromsø Foto Ørjan Bertelsen

Swedish home furnishings retailer Ikea Group China will launch into eCommerce in Shanghai and start selling its products online within the next couple of weeks. As it is a pilot program, delivery services will be limited to Shanghai initially. All its ready-to-assemble furniture, appliances and home accessories, except for food and green plants, will be available.

If the trial is successful, Ikea plans to roll out its eCommerce services across China as part of its multi-channel retailing strategy. It does not have any stores in China’s third- and fourth-tier cities, but in May Ikea established a pickup and order point in Wenzhou, Zhejiang province. The stores in nearby Ningbo will provide goods for that service.

In its latest financial year, Ikea China had sales revenues of 11.7 billion yuan (US$1.76 billion), jumping 19.4 per cent year-on-year. About 83 million customers visited its stores, up 20 per cent from the previous year. Ikea’s websites also had more than 67 million visits, a 25 per cent increase. Via

Under Armour China recruits star power

Under Armour reported online sales in China were up 157% .NBA All-Star Stephen Curry heads back to China next month for another promotional tour for sportswear brand Under Armour China (UA). As UA seeks to take market share away from rival Nike, the basketballer will be touring the greater China region, including Taiwan, from September 2 to 6.

Under Armour CEO Kevin Plank plans to more than double the company’s annual revenue to $10 billion by 2020, identifying three key growth areas: channels, categories and geographies.

“Our eCommerce in China has basically exploded for us,” he says, “so this is not just a bricks-and-mortar story.” He believes China may actually end up providing the script for the balance between digital and store sales. So far this year, UA has reported a 157 per cent increase over the same period last year from its eCommerce initiatives in China. Via

That’s a wrap for Cashback Industry News this week. Enjoy your weekend and we’ll be back with fresh global news and updates on Monday.