China Electronic Commerce Industry Development Prospect and Investment Forecast Report, 2013-2017

Due to the fierce competition for future electronic commerce industry, industrial reconstruction is inevitable. On one hand, there is a strict requirement for corporation financing capability as the one with abundant capital will occupy large-scale living and service electronic commerce market by merger and purchase. On the other hand, it will be a threat for the current electronic commerce market as the matured network which with regional advantages and resource of merchants and users enters the market.

Electronic commerce is named “growing industry and green industry”. It is an important industry among modern service industry, an immediate produce of the explosive growth of Internet and an entirely new direction of Internet application. As the internet economic era is coming, the development of electronic commerce means not only commercial opportunity but also a new driving force to promote the enterprise development for a corporation.

Current these years, electronic commerce market keeps a high-speed growth in major countries and regions along with the widespread internet broadband technology. And scale of China electronic commerce has ranked the second in the world in 2010. According to data, the overall trade scale of China electronic commerce market in 2010 has reached 4.8 trillion Yuan with a year-on-year growth rate of 33.33%. And it reached 4.9 trillion Yuan by the third quarter in 2011.

View from the user scale amount of China internet consumer has reached 145 million and with an annual growth of over 30 million. It reflects the fact that online shopping is more and more popular for consumers and its growth rate is far higher than that of traditional retailing. For a corporation, it means only invest and infiltrate into the field of electronic commerce can it obtain advantages in the market.

Comparing with foreign electronic commerce China’s has obvious native features as follows: firstly, shoppers can do online shopping and buy the specialty and special products which they can hardly buy in daily store due to the great mass of China; secondly, China consumers pay more attention to reputation effect which greatly contributes to consumers’ careful attitude towards online shopping and mistrust towards network business; thirdly, concentration degree of China electronic commerce market is lower than that of any other countries. The top 5 categories only take half of the market share in China while it takes almost 70% in America, Japan and British.

Presently there are kinds of bottlenecks for the development of China electronic commerce. According to researches what current consumers worry most is the logistic express issue of electronic commerce. More than 45% consumers worried about that goods maybe replaced by fakes during the transportation. Besides, consumers also worry other issues like the controllable delivery time, goods damaged during transportation, product quality, after-sales service and network payment.

View from the development model of electronic commerce we can find B2C will replace C2C and become the mainstream business model. Major business model for Taobao is C2C. Taobao try to transform by amend the regulations. However it results in putting off increasing cash deposit as such action is attacked by medium and small merchants. View from the development trend, as a more professional commercial organization, B2C is with a complete organization structure and will replace the C2C model.

View from the competitive landscape, it is no longer a dominant for Taobao. Online shopping is no longer the proper name for Taobao with the fast growth of other networks in current years, such as Jingdong Mall which focuses on electronic digital products, Dangdang which focuses on books and other new corporations--like Fangke and OkayBuy--which focus on clothing, shoes and map. It make the industry competition is fiercer. What’s more, traditional retailing corporations enhance the investment of electronic commerce; SuNingYi Purchase plans to transform towards comprehensive electronic merchant while Gome will continuously focus on housing electronic merchant.

As new markets, the group buying market and mobile electronic commerce market drive special attentions in 2011. The low threshold of group buying network leads to the fact that many people blindly follow the trend. Moreover, as the group buying corporations are over expanding as well as lacking a firm foundation and core competitiveness, part of the group buying market has to reduce staff or even bankrupt. In one word, the group buying market enters a winter like era. In contrast with group buying market, there is a fast growth trend for mobile electronic commerce market. Batter scale of China mobile electronic commerce has reached 6.5 billion Yuan and keeps a rapid development by 2011.

Due to the fierce competition for future electronic commerce industry, industrial reconstruction is inevitable. On one hand, there is a strict requirement for corporation financing capability as the one with abundant capital will occupy large-scale living and service electronic commerce market by merger and purchase. On the other hand, it will be a threat for the current electronic commerce market as the matured network which with regional advantages and resource of merchants and users enters the market.

Therefore, Forward predicts that amount of China network consumers will increase to 0.329 billion which is 44% of the urban by 2015. China will become the largest electronic commerce market in the world. Growth trend of China electronic commerce market will keep stable and increasing in the following 3 to 5 years. It is hopefully to break through 10 trillion Yuan in 2013.

Qianzhan Business Information Co., Ltd. Industry Research College
Research Team of Electronic Commerce Industry