Page 284 - 2019 White Paper on the Business Environment in China
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9 White Paper on the Business Environment in China
2.10 Merchandising
Background buying, secured third place behind Alibaba and JD.com
in 2018 with a 5.2 percent share. Started by a former
Consumption has been Google engineer in 2015, PDD allows consumers to buy
the primary direct from wholesalers and factories at competitive
force driving China’s economic development for the last prices. A key factor in PDD’s success to date is that it has
five years with a growth rate 3.2 percentage points higher targeted Tier 3 and Tier 4 cites in China, thus attracting
than GDP on average. The average rate for consumption new price-conscious e-commerce customers. China’s
reached 11.3 percent from 2013-17. According to the smaller cities are less urbanized than Tiers 1 and 2, but
Ministry of Commerce (MOC), wholesale and retailing in they are growing rapidly in ecommerce participation
2017 recorded tax revenue of 2.12 trillion yuan, rising by as digital buyers in those cities begin to seek out the
20.3 percent year-on-year, accounting for 23.5 percent benefits of more affordable yet genuine products
of the total revenue growth. With the increase in online. Smaller e-commerce players such as PPD have
income, Chinese residents are more willing to consume benefited from this trend as buyers in lower-tier cities
as income rises (Tan). Brisk development of consumer have been less tolerant of the higher prices found on
finance and the upgrading of consumption patterns large players such as Alibaba and JD.com, but they are
also contributed to stable consumption growth in quick to seize upon the deals found on other platforms.
2018. Provinces and regions presented faster growth in Other smaller competitors such as electronics retailer
residents’ income compared to local GDP rate in 2017. Suning and online discount fashion retailer Vipshop
The rise in residents’ income is strengthen consumption account for nearly 2 percent and 1.8 percent of retail
momentum heading into 2019. e-commerce sales respectively. Suning has been
exploring multichannel integration over the past few
E-Commerce years. This approach has proved profitable so far, while
Vipshop benefits from the flash sales and partnership
China is the world’s largest connected country, and with Tencent and JD.com (Kwok).
mobile payment has clearly paved the path. Any type
of transaction can now be made through a mobile China’s cross-border e-commerce topped 9 trillion
phone. The country may be moving toward a cashless yuan (US$1.3 trillion) in 2018, according to a report
society as most of people living first and second tier released by the China E-Commerce Association.
cities don’t use coins and bills anymore. The advantage The top 10 import sources of China’s cross-border
is that everything become easier and faster. The need e-commerce trade in 2017 were Japan, the United
and desire of consumption can be satisfied almost States, the Republic of Korea, Australia, Germany, New
instantaneously. Mobile payment is also essential when Zealand, the Netherlands, France, Britain, and China’s
you buy online. Hong Kong Special Administrative Region. Cross-
border e-commerce is most active in South China’s
Alibaba remained on top of the retail e-commerce Guangdong Province, followed by Beijing, East China’s
sales with a 58.2 percent share of the market in China, Zhejiang and Shandong provinces and Central China’s
but facing increasing competition. The online company Henan Province for exports via e-commerce. Tong
is expected to continue to dominating the e-commerce Xiaomin, chief engineer at the Information Center of the
market for the near future, followed by JD.com currently Ministry of Industry and Information Technology, said
with a 16.3 percent share. The two giants are facing that the Chinese government supports cross-border
soaring competition from smaller, more specialist e-commerce with policies and infrastructure building.
players that can offer “authentic” goods. Pinduoduo Globally, however, trade protectionism in forms of tariff
(PDD), a Groupon-style retailer that mixes in social barriers and anti-monopoly investigations has posed
284
2.10 Merchandising
Background buying, secured third place behind Alibaba and JD.com
in 2018 with a 5.2 percent share. Started by a former
Consumption has been Google engineer in 2015, PDD allows consumers to buy
the primary direct from wholesalers and factories at competitive
force driving China’s economic development for the last prices. A key factor in PDD’s success to date is that it has
five years with a growth rate 3.2 percentage points higher targeted Tier 3 and Tier 4 cites in China, thus attracting
than GDP on average. The average rate for consumption new price-conscious e-commerce customers. China’s
reached 11.3 percent from 2013-17. According to the smaller cities are less urbanized than Tiers 1 and 2, but
Ministry of Commerce (MOC), wholesale and retailing in they are growing rapidly in ecommerce participation
2017 recorded tax revenue of 2.12 trillion yuan, rising by as digital buyers in those cities begin to seek out the
20.3 percent year-on-year, accounting for 23.5 percent benefits of more affordable yet genuine products
of the total revenue growth. With the increase in online. Smaller e-commerce players such as PPD have
income, Chinese residents are more willing to consume benefited from this trend as buyers in lower-tier cities
as income rises (Tan). Brisk development of consumer have been less tolerant of the higher prices found on
finance and the upgrading of consumption patterns large players such as Alibaba and JD.com, but they are
also contributed to stable consumption growth in quick to seize upon the deals found on other platforms.
2018. Provinces and regions presented faster growth in Other smaller competitors such as electronics retailer
residents’ income compared to local GDP rate in 2017. Suning and online discount fashion retailer Vipshop
The rise in residents’ income is strengthen consumption account for nearly 2 percent and 1.8 percent of retail
momentum heading into 2019. e-commerce sales respectively. Suning has been
exploring multichannel integration over the past few
E-Commerce years. This approach has proved profitable so far, while
Vipshop benefits from the flash sales and partnership
China is the world’s largest connected country, and with Tencent and JD.com (Kwok).
mobile payment has clearly paved the path. Any type
of transaction can now be made through a mobile China’s cross-border e-commerce topped 9 trillion
phone. The country may be moving toward a cashless yuan (US$1.3 trillion) in 2018, according to a report
society as most of people living first and second tier released by the China E-Commerce Association.
cities don’t use coins and bills anymore. The advantage The top 10 import sources of China’s cross-border
is that everything become easier and faster. The need e-commerce trade in 2017 were Japan, the United
and desire of consumption can be satisfied almost States, the Republic of Korea, Australia, Germany, New
instantaneously. Mobile payment is also essential when Zealand, the Netherlands, France, Britain, and China’s
you buy online. Hong Kong Special Administrative Region. Cross-
border e-commerce is most active in South China’s
Alibaba remained on top of the retail e-commerce Guangdong Province, followed by Beijing, East China’s
sales with a 58.2 percent share of the market in China, Zhejiang and Shandong provinces and Central China’s
but facing increasing competition. The online company Henan Province for exports via e-commerce. Tong
is expected to continue to dominating the e-commerce Xiaomin, chief engineer at the Information Center of the
market for the near future, followed by JD.com currently Ministry of Industry and Information Technology, said
with a 16.3 percent share. The two giants are facing that the Chinese government supports cross-border
soaring competition from smaller, more specialist e-commerce with policies and infrastructure building.
players that can offer “authentic” goods. Pinduoduo Globally, however, trade protectionism in forms of tariff
(PDD), a Groupon-style retailer that mixes in social barriers and anti-monopoly investigations has posed
284
