Online and e-Commerce

China is predicted in the next few years to become one of the biggest markets in terms of online retail, so brands are scrambling to compliment their brick and mortar development with an online strategy as well. With nothing clear about the Chinese online market besides the domination of Sina Weibo in social media and an aversion to full price products by a majority of Chinese consumers (the Tao Bao Effect), there is a lot of room for both substantial losses and gains.

2.1.12 – China To Be Top E-Commerce Opportunity For Luxury Brands “Within Five Years” (Video) (No Author Attributed, Jing Daily)

New York based think tank L2 offers its top 5 predictions for 2012, and offers many insightful statistics into global online markets; and not surprisingly, L2 predicts that China’s e-commerce will explode over the next few years and offer high returns for those who figure out how to reach the plugged-in Chinese consumer.

75% of wealth creation in China is centered in second- and third-tier cities

From the article:

“This fits with the recent report by the Boston Consulting Group, in which it predicted that China would become the world’s largest e-commerce market in 2015, the same year McKinsey expects the country to become the world’s largest luxury market. It is this confluence of e-commerce and luxury consumption — paired with greater demand from consumers in second- and third-tier cities — that should make China one of the world’s key markets in coming years.”

2.1.12 – Fashion Tech Boom: Why It’s Happening and How Startups Get Funded (Dhani Mau, Fashionista)

Tech-based fashion startups are popping up with increasing frequency, but what are the real success stories and how are they funding their development? Here, Fashionista reviews the best ideas in how to merge the fashion and technology industries.

From the article:

“Last year saw a major influx of new fashion-focused tech startups. With the early success of pioneers like Gilt Groupe and Ideeli, an industry that has typically been slow to embrace new technology has spawned a burgeoning community of game-changing ecommerce sites, mobile apps and social networking and discovery platforms. And with no shortage of new ideas or interest from financial backers, this influx shows no signs of slowing down in 2012–and we think that’s very exciting.”

1.18.12 – Cracking E-Commerce in China (Divia Harilela, Business of Fashion)

The opportunities in e-commerce in China are the largest in the world, with industry experts predicting that China will become the world’s next largest online retail market. However, differences between e-commerce in China and more developed markets have baffled retailers in the West, but some retailers are noticing key market trends and starting to break the code to online retail in the Mainland.

From the article:

“According to a recent report by The Boston Consulting Group (BCG), China is set to become the world’s next e-commerce superpower, surpassing the United States to become the largest online commerce market in the world, with an estimated market size of $300 billion. In 2006, less than 10 percent of China’s urban population shopped online. By 2015, that figure is expected to have quadrupled, reaching 44 percent, while the total number of e-commerce shoppers in China will grow to 329 million.”

1.18.12 – The Rise of New Business Models (Elizabeth Knopf, Business of Fashion)

Personal subscription sites, as well as social merchandising, mass customization, and collaborative consumption are just some new business models for e-commerce that have proven to have many advantages, but these opportunities are not without their challenges.

From the article:

 For years, e-commerce suffered from capital inefficiencies and complexities that pushed investors away. But in recent years, major infrastructural advances and the success of innovative start-ups like Gilt Groupe have rekindled investor interest and set the stage for an explosion of promising new business models including personal subscription, social merchandising, mass customisation and collaborative consumption.”

1.17.12 – The Stage is Set for an E-Commerce Explosion (Elizabeth Knopf, Business of Fashion)

E-Commerce is primed to take off as infrastructure improves and social media offers new options for online retail, especially in developing countries, but creating a seamless integration of technology has proven difficult for companies; furthermore, with this influx of information, retailers and buyers are still grappling with how to sort this data to make online retail more efficient.

From the article:

“In recent years, however, the tides have turned in e-commerce. For one, consumers are now acclimated to the concept of online retail. According to Forrester, the online retail market in the US alone is expected to grow to $279 billion by 2015. But critically, major innovations and infrastructural advances have also fundamentally improved the economics of e-commerce, attracting significant venture capital interest in the sector.”

12.8.11 – Thecorner to Promote Chinese Designers (Debra Bruno, WWD)

Five designers, including Christine Lau, Riko Manchit Au, Shangguan Zhe, Uma Wang and Zou You, will be featured on thecorner.com as part of partnership with Vogue China and Vogue Italia.

From the article:

“A new project organized by Vogue China and Thecorner.com, the online designer site, will feature five emerging Chinese designers as a way to support emerging talent and to educate Chinese consumers about the value of embracing designer fashion made in China.

“These last couple of years, we’ve really started to feel a dramatic change, a new generation,” said China Vogue editor in chief Angelica Cheung. “They’re more mature professionals; they have their own design, their own point of view.””

6.14.11 – Luxury Shopping Websites Offer China a Cheaper Alternative (No Author Attributed, The Independent)

The “out-of-date” luxury market is booming in China thanks to the country’s obsession with foreign brands, and importers are buying old inventory directly from brands and offering them online. Although damaging to a brand’s image, many can’t afford to simply sit on old stock and choose to get rid of their inventory this way, much to the liking of the Chinese population.

From the article:

“These canny operators [luxury e-commerce sites] have found a way to keep their nation’s brand-hungry consumers satisfied – and it involves buying older “out-of-date” items from the luxury brands in Europe and the United States, and then selling them in China at prices way reduced from their original ones.”

5.26.11 – A Social Network for China’s Lonely Super Wealthy (Kathrin Hille, FT)

A profile on one of China’s most exclusive social media networks P1.CN, chief executive Wang Yu explains how they attracted 1.2 million users and why class matters in China.

From the article:

“According to him, China’s rich kids are reluctant to engage socially with people outside their own class, and are desperate to find others with similar wealth levels. “The higher up you go, the more active they are [on P1.CN],” he says. “The top members use it on a daily basis because for these people, it is really hard to find others of their kind.””

5.22.11 – China’s Luxury Consumers Get Their Information Online (No Author Attributed, The Independent)

With more and more Chinese people getting online, the pace of learning about luxury brands has rapidly increased on the Mainland, making consumers more thoughtful and picky about what they purchase. However, although most of the research is done online about a brand, very few Chinese people are comfortable with purchasing such products online.

From the article:

“This week it has been the turn of the international audit and advisory services firm KPMG ( http://www.kpmg.com/cn/en) to release its report into the spending habits of mainland Chinese – and it found that 70 percent of the country’s consumers of luxury brands search the internet each month before making their purchases. What’s more, 30 percent claimed they searched online for information on luxury items each week.

4.18.11 – As Beijing Cracks Down on Outdoor Advertising, Luxury Giants Go Digital (No Author Attributed, Jing Daily)

With Beijing cracking down on conspicuous luxury advertising, brands retreat to digital and high-tech means to entice new customers from the Mainland.

From the article:

“However, in private, Beijing’s luxury-obsessed consumers are now more spoiled than ever, as many of the world’s top high-end brands have learned that outdoor advertising is less effective than online outreach and have gone increasingly digital.”

3.8.11 – Brands Experiment with Weibo, China’s Twitter (Elizabeth Peng, Business of Fashion)

Sina Weibo is definitely China’s most influential social media network, as its Twitter + Tumblr-like convenience has attracted hundreds of millions of users, and those users have attracted fashion brands trying to reach out to and create a Mainland following.

From the article:

“Much like Twitter, Weibo lets users post messages of up to 140 characters, which in Mandarin Chinese is substantial, allowing for more detailed expression than is possible in English on Twitter. Weibo also offers threaded discussions, voting and polling features, and events, as well as Tumblr-like features which make it easy to post photos, videos and audio. Indeed, Weibo’s product roadmap points towards a robust Facebook-like social networking site, with expanded profiles and location-based services, according to a highly informative presentation put together by Bill Bishop, a US-born, Beijing-based China expert, blogger, investor and advisor to several startups.”

12.1.10 – Yoox to Open New Online Stores in China in 2011 (Rueters)

Italian e-commerce giant Yoox is preparing to open online shops in China in 2011, offering high-end, full-priced products. But is China ready to pay full price, especially online? Yoox bets it is, as do many other international brands.

From the article:

“Italian online fashion retailer Yoox (YOOX.MI) is planning to bring some of the most exclusive fashion brands to China next year, tapping into the demand for luxury goods of the world’s largest online population.”

11.26.10 – Will E-Commerce Help Stem The Tide Of Mainland Chinese Shopping In Hong Kong? (No Author Attributed, Jing Daily)

Armani is one of the first international brands to add online shopping to its Chinese language website, but many other international luxury brands seem to be holding out to see how the Chinese consumer react to access both offline and online.

From the article:

“A relatively strong yuan, duty free shopping and better selection are among the top reasons that visitors from mainland China give for their cross-border shopping sprees in Hong Kong. While Hong Kong retailers have welcomed these free-spenders with open arms — not surprising, considering the money they made from the record 662,248 mainland Chinese who traveled to the city during the recent “Golden Week” holiday — luxury brands, many of which have sunk millions into the mainland China market, would like to see Chinese shoppers spending locally. However, stemming this Hong Kong-bound tide has been anything but easy.”

8.26.10 – Shanghai #1 in Online Shopping (No Author Attributed, Jing Daily)

Shanghai spent a staggering 352 billion RMB online in 2009 (over 50 billion USD), and although there isn’t a thorough breakdown of the numbers, it’s pretty certain that a large share of it was spent on Taobao. Beijing, Shenzhen, Hangzhou, and Guangzhou rounded out the top 5 cities for online spending in 2009.

From the article:

“While the growing popularity of high-end online shopping, particularly in wealthier cities like Shanghai, presents serious challenges for high-end companies, it also presents great opportunities. A handful of companies, such as Giorgio Armani and Dunhill, have already made moves to capitalize on this shift from low- to high-end online shopping, launching Chinese-language e-commerce sites, and others — such as Hermes and Tiffany — have launched full simplified-Chinese-version sites, although they (and other major brands like Chanel) are resisting the urge to launch online stores at the moment.”

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