Where are the opportunities in China’s E-commerce landscape?

How many of you shop on Taobao? If you’re Chinese I apologize for asking such a stupid question. How about this one: How many of you could name the top 5 E-Commerce sites in China? Now think. You have time so don’t hurry.

If you cannot name more than three you wouldn’t be alone – even the majority of local Chinese cannot name more than the big two (Alibaba & Taobao). Reviewing the market over the past week I’m beginning to think there are a few sleeping giants waiting to be woken up in the E-commerce space.

I believe there are a number of opportunities surrounding E-commerce in China. Attributed to the following trends but in no certain order:

Internet population booming

Rising middle class

Confidence in online transactions

Growth in English learning schools

China becoming more international

OK we are pretty familiar with this information, but why is there still so few well known E-commerce sites and surely major retailers can see the relationship the above points have on E-commerce. There are literally 1000′s of entertainment, education, news, gaming and brand sites – but why is there still so few major e-retailers?

I have identified 2 key opportunities that exist in this market today.

1. More foreign trade from local vendors selling abroad (Ebay, PayPal, Amazon)

2. More local e-Commerce websites selling to local Chinese

Over the last few weeks I’ve attempted at probing a few popular retailers in our office district of Tai Kang lu about why they don’t drive more online sales to foreigners? Given the bulk of their local sales is from tourists. Why wait for them to come? Early responses suggest it’s simply a lack of awareness and general retailer confidence tackling online set up. They just don’t know how.

This graph represents the top 7 E-commerce retailers in China that utilize Social media to grow their business. *All data collected was prepared by our team at ZeroDegrees

But what if it was simply a paradigm shift? What if it was just a matter of engaging on a level the retailer understood. And what role would Social Media have in developing this confidence and paradigm shifting?

Webdistorion states most E-commerce sites have been slow to adopt change. There are only a few sites in China that actually adopt Social media principles as a key tool in growing their online business. But then again why do they need to change? Who are there competition? People tend to stick to a recipe that works, and stick with it until it dies off, then the knee jerking / panic starts to set in. Business Myopia at it’s worst.

There lies a huge opportunity for a number of key local retailers selling locally but also selling their goods abroad. It could simply be a matter of education and ‘holding their hand’ to the point of purchase (as they say). For some it cannot be an investment of more than 5 hours work – companies like Ebay & PayPal have the ability to connect a small 100 sqm shop to an audience of over 100m active Ebay shoppers. The shopping center is already there.

For others it requires a much deeper understanding. Those brands who have a vision of becoming a market leader need to understand becoming a market leader requires you to be noted a knowledge leader. And that doesn’t happen by simply selling ‘stuff’. The China social media landscape offers a plethora of consumers to begin to engage with and a logical pathway for E-commerce success.

I will feature more articles on China’s E-commerce, featuring analysis of HOW and WHO can be taking advantage of this potentially huge market space in the coming weeks.

If you have any thoughts on this article feel free to post a comment below.

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Tagged as: Asia, Business, China, eBay, Electronic commerce, English language, International trade, Retailing