eMarketer_China_Ecommerce-A_Developing_Market_Begins_to_Boom.pdf

Copyright ?2012 eMarketer, Inc. All rights reserved. Ecommerce Overview 2 China’s Group-Buying Phenomenon 7 Mcommerce: The Next Big Thing 8 Conclusions 9 eMarketer Interviews 10 Related Links 10 November 2012 Executive Summary: Online sales in China are flourishing. Consumers are embracing the internet’s ability to offer comparison shopping and product research, and marketers are eager to expand operations beyond flagship stores in established markets like Shanghai and Beijing. 142566 The country offers enormous opportunities for marketers to build brands without having to invest in expensive physical locations across hundreds of cities. Instead, companies can use ecommerce to expand into third- and fourth-tier markets where establishing a network of brick-and-mortar stores can be difficult. Virtual flagship stores on platforms like Alibaba’s Tmall, an offshoot of the eBay-style auction site Taobao, are viewed as safe, convenient and reliable ecommerce locations by consumers and retailers. At the same time, China’s group-buying sector should see consolidation from thousands of players to a handful of dominant companies, making it easier for advertisers to use group-buying sites to drive sales and build brands. Ecommerce also has strong support from China’s government, which believes online sales growth will help develop domestic sales across China’s entire value chain. Despite the optimism, China’s ecommerce industry still has hurdles to overcome, including issues with privacy, counterfeiting, user data protection, payment systems and distribution. Advertisers should also realize that working with local platforms can be difficult. China’s ecommerce websites would rather please customers than brand owners and operate at a faster pace than the average ecommerce platform in the West. Key Questions ■ What are the main drivers of ecommerce in China? ■ Who are China’s lower-tier online shoppers? ■ Is Taobao the only platform you nee