May 1, 2014

Unstoppable, Spotlight on China

China is making big moves and by the end of the year, will surpass the USA as the largest e-commerce market in the world. With an expected worth of $541 billion by 2015, 49% of China's population purchased online last year and by 2017, this figure is projected to rise to an unprecedented 71%.

photo via ft.com

Their e-commerce market is predominantly younger than 30, affluent, and shopping via mobile devices. Instead of visiting brand's official websites, the Chinese tend to search social media as well as five of the country's most popular websites like taobao.com. Not to mention, they are swapping cash for virtual forms of payment like debit and credit cards faster than any other country worldwide.

photo via WWD

News of Alibaba's IPO has been all over the internet and it's eventual expansion into the US is going to drastically shake up the online marketplace, affecting everyone from Amazon to eBay to Netflix, Twitter and even Google. The Chinese web giant connects consumers with brands and operates much like that of Amazon, but is two to three times larger and offers everything from e-commerce to social media, online streaming, online payment systems, and recently invested in China's largest internet television company, Youku Todou Inc as well as Chinese department store operator, Intime Retail. The iconic label Burberry is the first luxury retailer to open a virtual storefront on the site as the British brand continues its efforts into the Chinese market and we're expecting many others to follow suit.


And Gap is one of them as they further outline plans to triple their business in China. The retailer already has a total of 83 shops residing in Mainland China, 15 of them outlets, with an expected 30 more to open this year. Additionally, they have launched a physical Old Navy store in Shanghai as well as a digital storefront on none other than Alibaba's tmall.com platform.

photo via WWD

It may not be know for its sunshine but Chengdu is quickly becoming a retail hub, specifically for high-end luxury brands. Located in Southwest China and with a population of 14 million, this city has 31 retail projects in the making as well as a new high-end megamall with tenants that include Gucci, Cartier and Hermés. In 2012, Forbes predicted Chengdu as the fastest growing city in China over the coming decade and with the growing middle class snatching up entry level luxury products like makeup and accessories, this could just be the beginning.

photo via The Economist

While many retailers have yet to expand beyond Shanghai and Beijing, this will soon change as China's global presence strengthens and brands feel more confident in the level of demand in more of the remote parts of the country. Right now, the spotlight is on China – development of new cities, growing middle class, and growth in e-commerce and online shopping – making the fusion between the east and the west imperative to the world economy. 

1 comment:

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