E-commerce: The Great Mall of China?

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There’s nothing like starting a new year with a fresh perspective. For me, this came in the form of a trip to China over the holidays. While I fell in love with the sights, people and culture, one image from this experience lingers as the most impactful:

Those are e-commerce packages waiting to be delivered. If this was one random storefront, what would it look like if we scaled this by thousands? Is this pace indicative of the nation as a whole? Naturally, I did a little digging on the numbers behind e-commerce in China, and here is what I found.

I don’t think anyone would be surprised that China is an e-commerce titan; however, the degree of the nation’s dominance in this arena is staggering. In 2014, China had already hit US$458 billion, dwarfing the US total of US$297 billion. They've rapidly overtaken the U.S. and other developed nations, becoming the world's largest e-commerce market. Domestically, e-commerce is becoming a shaping force of China's economy, contributing 19.4% of China's GDP growth and 33.5% of China's retail growth (per Kantar Retail 7.28.15).
 
What’s driving this growth? One likely factor may be Chinese consumers’ devotion to mobile, and more recently, their increasing interest in mobile shopping. Alibaba reported that in Q1 of 2015, 83% of all active buyers were mobile buyers, ultimately contributing 51% of Alibaba's total GMV (per Kantar Retail 7.28.15).

And this is just the beginning. As companies are able to expand their distribution to rural areas, they will surely unlock a new level of growth. Companies like Taobao.com are already taking steps to set up rural service centers to handle orders and fulfillment.

Finally, as you know from everything I share on this blog, you never want to leave the human element out of the equation. Beyond the widespread adoption of mobile web browsing, it’s important to consider that e-commerce has been so widely embraced because it is also a natural fit for a savvy consumer base of natural bargain hunters who equally value pre-purchase research done online with in-store experiences.

When we step back and look at the Chinese e-commerce phenomenon as a whole, I am optimistic. Not only because this represents potential and opportunity on this side of the globe, but also because it exemplifies the perfect manifestation of technology enhancing, not replacing, real human dynamics. This is what being a marketing technologist is all about.