Alibaba Think Tank Predicts Strong Future for eCommerce in China

Often described as the Chinese equivalent of Amazon, Alibaba is one of the most dominant tech companies in China today. The company has a keen interest in the future of eCommerce in China. Alibaba’s in-house think tank, Aliresearch, recently presented and analysed the findings from several different forecasters regarding the future of the Chinese economy.

Here’s what Alibaba, along with other experts, think eCommerce in China and mCommerce in China will look like over the next few years.

Nearly one quarter of retail sales will be conducted online by 2020

According to Bain & Company, by 2020 China’s online retail market will have more than tripled in value, from RMB 2.9 trillion in 2014 to RMB 10 trillion (US$1.5 trillion). According to the report, online will account for nearly a quarter (22%) of the total value of retail sales by 2020, with the biggest drive in sales growth being B2C eCommerce in China. Of the RMB 2.2 trillion in sales accounted for online, 70% (RMB 1.54 trillion) will come from mCommerce in China.

A particularly interesting part of the report was the section where it was highlighted that the businesses succeeding the most in China’s growing online B2C sector were small companies, including those based in a specific region, those operating entirely online, and those brands that have not yet built up significant recognition. It just goes to show that with clever digital marketing, China can be a lucrative place to do business regardless of the size of your company.

China’s consumer market will double to US$6.5 trillion

Research by the Boston Consulting Group presents evidence that by 2020 an additional 100 million Chinese households, which are currently earning around RMB 60,000 (US$9000), will have entered the middle-class and affluent (MAC) bracket. As a result, around a quarter of Chinese counties and cities will see a doubling of spending power, taking consumer spending to a total of US$6.5 trillion. By 2020 the increase in disposable income will mean that there will be 800 locations in China that have a greater level of disposable income per capita than Shanghai does today.

For this reason it is important to spend the time necessary to accurately identify potential emerging markets. Thanks to eCommerce in China, you can use digital marketing to target your business to specific locations. Many of those locations may be being overlooked by larger businesses, but in five years’ time could be as lucrative for you as operating in Shanghai would be today.

Digital marketing is key to breaking new markets in China

China still promises huge growth potential. Many of its developing rural areas hold great promise as consumer demand and levels of disposable income both increase. Research by the China Academy for Rural Development at Zhejiang University suggests that all rural areas of China will have internet access within five years. That opens up a world of possibilities for online retail, including mCommerce in China. From a long-term prospective, digital marketing is key to breaking new markets in China.

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