Page 290 - 2019 White Paper on the Business Environment in China
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9 White Paper on the Business Environment in China
up from 77.8 percent in the first quarter. National Bureau projects such as vending machines selling anything
of Statistics data showed China’s GDP expanded 6.8 from live hairy crabs to new cars. Tencent is hard on its
percent year on year in the first half, with a 6.7-percent heels, investing in digital integration with Carrefour,
growth in the second quarter (China Economic Net). Yonghui, Wanda Plazas, unmanned WeChat stores and
1,000 7Fresh grocery stores in conjunction with JD and
Walmart. Walmart and subsidiary Sam’s Club will likely
With a vast geographical span and huge regional learn from the experience and follow suit. Brands will
differences, distribution in China has long been not only target the less competitive markets in the
complicated. Often, goods have to pass through lower tier cities, but be much smarter about which
multi-layers of distributors before reaching the cities they focus on. These smaller cities are leading the
hands of the consumers. As China strives to build a growth of Alibaba’s e-commerce platforms. This growth
more consumption-driven economy, the country’s is supported by increasing consumer wealth and
distribution sector is gaining increasing attention sophistication, and improving logistics. E-commerce
these days, both from businesses and the government growth is both raising awareness of new products,
(Business Wire). The total retail sales of consumer goods categories and origins, but also provides a depth of data
hit 36.6 trillion yuan in 2017, a 10.2 percent increase from that can help determine local and regional preferences.
a year earlier and maintaining double-digit growth over More brands also are realizing that they can’t do it alone
the past 14 years. China’s social e-commerce will reach in a market as fragmented, complex and dynamic as
1.14 trillion yuan ($170 billion) in 2018, with a year-on- China. Large corporations are signing more partnerships
year increase of 66.7 percent. Social e-commerce, which with companies like Alibaba and Tencent such as the
emerged in 2013 in China, combines social media with recent deals between WeChat and Lego and Alibaba
e-commerce. E-commerce platforms Xiaohongshu and and Ford. These deals won’t just be about tapping
Pinduoduo are two examples. Xiaohongshu users post into their powerful marketing and sales channels, but
their purchase, others who like the items can directly gaining knowledge from their enormous deposits of
go to the product page by clicking tags. On Pinduoduo, consumer data. In addition, businesses who understand
users post the items they want to buy and invite others the market will become increasingly attractive partners
to cut the price by buying the same items or clicking for brands seeking to maintain or gain leadership in
on the posts. The report predicted that more than China (Tanner).
30 million people will work in the social e-commerce
industry in 2018, 50.2 percent more than 2017. China
has the world’s largest e-commerce market, with online
retail sales growing 32.2 percent year on year in 2017 to
reach 7.2 trillion yuan. Data provided by the Ministry of
Commerce showed that, by 2020, online retail sales will
reach 9.6 trillion yuan, while social e-commerce sales
are expected to account for 31.3 percent (Xinhua).
According to Forbes, several trends are rising in retail.
Convenience stores are still among the fastest growing
retail channels in China due to the busy urban lifestyle.
Convenience store sales are expected to grow 13 percent
per year until 2025. These stores may eventually become
irrelevant with as e-commerce, mobile payments and
food delivery now mainstream in China. New Retail
will marry convenience with experience, on the back of
big data analysis and established logistics networks. In
2018, it was likely to see New Retail shift from a novel
concept to the mainstream. Alibaba expects to grow its
current 20-odd Hema grocery stores to 2,000 over the
next three to five years, in addition to rolling out New
Retail across its Intime, RT-Mart, Auchan, Suning chains.
The company will also dive into experimental retail
290
up from 77.8 percent in the first quarter. National Bureau projects such as vending machines selling anything
of Statistics data showed China’s GDP expanded 6.8 from live hairy crabs to new cars. Tencent is hard on its
percent year on year in the first half, with a 6.7-percent heels, investing in digital integration with Carrefour,
growth in the second quarter (China Economic Net). Yonghui, Wanda Plazas, unmanned WeChat stores and
1,000 7Fresh grocery stores in conjunction with JD and
Walmart. Walmart and subsidiary Sam’s Club will likely
With a vast geographical span and huge regional learn from the experience and follow suit. Brands will
differences, distribution in China has long been not only target the less competitive markets in the
complicated. Often, goods have to pass through lower tier cities, but be much smarter about which
multi-layers of distributors before reaching the cities they focus on. These smaller cities are leading the
hands of the consumers. As China strives to build a growth of Alibaba’s e-commerce platforms. This growth
more consumption-driven economy, the country’s is supported by increasing consumer wealth and
distribution sector is gaining increasing attention sophistication, and improving logistics. E-commerce
these days, both from businesses and the government growth is both raising awareness of new products,
(Business Wire). The total retail sales of consumer goods categories and origins, but also provides a depth of data
hit 36.6 trillion yuan in 2017, a 10.2 percent increase from that can help determine local and regional preferences.
a year earlier and maintaining double-digit growth over More brands also are realizing that they can’t do it alone
the past 14 years. China’s social e-commerce will reach in a market as fragmented, complex and dynamic as
1.14 trillion yuan ($170 billion) in 2018, with a year-on- China. Large corporations are signing more partnerships
year increase of 66.7 percent. Social e-commerce, which with companies like Alibaba and Tencent such as the
emerged in 2013 in China, combines social media with recent deals between WeChat and Lego and Alibaba
e-commerce. E-commerce platforms Xiaohongshu and and Ford. These deals won’t just be about tapping
Pinduoduo are two examples. Xiaohongshu users post into their powerful marketing and sales channels, but
their purchase, others who like the items can directly gaining knowledge from their enormous deposits of
go to the product page by clicking tags. On Pinduoduo, consumer data. In addition, businesses who understand
users post the items they want to buy and invite others the market will become increasingly attractive partners
to cut the price by buying the same items or clicking for brands seeking to maintain or gain leadership in
on the posts. The report predicted that more than China (Tanner).
30 million people will work in the social e-commerce
industry in 2018, 50.2 percent more than 2017. China
has the world’s largest e-commerce market, with online
retail sales growing 32.2 percent year on year in 2017 to
reach 7.2 trillion yuan. Data provided by the Ministry of
Commerce showed that, by 2020, online retail sales will
reach 9.6 trillion yuan, while social e-commerce sales
are expected to account for 31.3 percent (Xinhua).
According to Forbes, several trends are rising in retail.
Convenience stores are still among the fastest growing
retail channels in China due to the busy urban lifestyle.
Convenience store sales are expected to grow 13 percent
per year until 2025. These stores may eventually become
irrelevant with as e-commerce, mobile payments and
food delivery now mainstream in China. New Retail
will marry convenience with experience, on the back of
big data analysis and established logistics networks. In
2018, it was likely to see New Retail shift from a novel
concept to the mainstream. Alibaba expects to grow its
current 20-odd Hema grocery stores to 2,000 over the
next three to five years, in addition to rolling out New
Retail across its Intime, RT-Mart, Auchan, Suning chains.
The company will also dive into experimental retail
290
