Exploring the untapped potential of China (Part 2)
There has been a lot of discussion about the untapped potential of China as a retail environment.
Three of the biggest opportunities for UK retailers:
- The opportunity goes both ways
A recent survey conducted by consumer delivery company, Hermes, revealed that shoppers continue to expand their horizons with 84% of Brits having ordered from a foreign retailer’s website. The results also showed that well over a third of German and French shoppers have bought from the UK, with numbers from China steadily growing.
This trend can’t be underestimated. China’s online population of 650 million, including 300 million shoppers, means the scale of its market is huge. Especially when you consider that not even half of the 1.4 billion Chinese population is connected yet. With a sharp increase in demand for established Western brands, there is now a considerable opportunity for retailers to reach this market. Online shopping growth is fast, having increased by a remarkable 60 million customers since last year.
- China will be worth almost £1 billion by the end of the decade
Chinese consumers are expected to spend £177 billion online this year, surpassing all other countries. But their shopping is not restricted to domestic suppliers. Purchasing habit data shows the percentage of people choosing to buy direct from foreign merchants (rather than marketplaces such as eBay) has increased exponentially over the past few years. By 2020, the Chinese market is forecasted to be worth £0.9 billion for UK online retailers, with Hong Kong predicted to be worth a further £0.4 billion.
- Learn to love China Singles Day:
Much of the talk in the UK is about the emergence of Black Friday and Cyber Monday themed sales hitting our shores. Yet, neither come close to China Singles Day which is now the largest online shopping day in the world, with sales in Alibaba’s sites Tmall and Taobao increasing from US$5.8 billion in 2013 to US$9.3 billion in 2014. Last year, Worldpay saw a whopping 455 percent increase in spending on the day itself with 2,123 transactions per minute, spending £95 per person.
The numbers are already staggering. 1.4 billion population. Almost $10 billion spent online in just one day last year. Yet, with internet penetration in China being a mere 45% of the population, the online shopping demographic representing less than a quarter of the total population, and smartphone penetration increasing exponentially the numbers will only grow.