Description :
What's up everyone?
Rather than heading out to a brick and mortar store to buy things, people turn to the internet to provide them with a veritable cornucopia of consumer goods - clothes, electronics, even groceries, usually in much greater variety and significantly less expensive than traditional stores.
In short, online shopping has come to dominate our consuming practices over the past decade.
Winners and Losers of Ecommerce
As with any emerging market or technology, there are winners and there are losers when it comes to online shopping. The losers have largely been the brick and mortar businesses that have refused to adapt, becoming irrelevant as their customers flocked to the internet. The winners have been companies that took the initiative and aggressively pursued online customers. And while the United States has been the epicenter of the tech revolution, we’re poised to see our dominance in this arena start to slip over the next few years. And who’s going to pick up the slack? Only one of the world’s fastest growing, largest economies - China.
China’s Ecommerce Stats
According to Lauren Indvik on mashable.com, online shopping in China generated $121 billion in sales last year, and that number is expected to triple through 2015. By then, China’s online spending is projected to be 20% higher than it will be in the United States, coming in at roughly $420 billion. At that point, ecommerce is expected to make up 8% of all retail sales in China.
Why China?
So what exactly is driving this intense growth? Population is a huge factor. China has 1.34 billion people, and though it’s still a developing country, it’s also becoming increasingly upwardly mobile. Those living in the massive, sprawling urban areas generally have access to some form of internet, and the tech infrastructure is constantly improving. The Chinese economy is also booming, which means more and more people have some disposable income these days. In fact, the Chinese middle class is expected to grow from 200 million people to 800 million over the next 20 years. All those freshly made middle class folks are going to spend at least some of their money online.
Challenges of the Future
With all Chinese ecommerce has going for it, there are still some major limitations that will need to be addressed in the future. The first is that, much like in the early days of online shopping in the U.S., Chinese consumers must be extremely wary of fraud and subpar or counterfeit goods, and have a difficult if not impossible time returning merchandise. Another major hurdle is the lack of consistent internet access for much of China’s populace -14% of Chinese consumers shop online, while 54% of Americans do. While this might seem like a small percentage, however, it’s important to remember that 14% of 1.3 billion is still a considerable number.
If the Chinese economy continues to grow as projected, we can expect to see China dominating online shopping very soon, and, one suspects, for a very long time. If the United States wants to stay competitive, we have to ramp up our innovation and hone and innovate our ecommerce software in order to attract online shoppers from around the world - especially China.
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*by andreascy*
