A recent report from McKinsey shows that China is the world’s fastest growing online retail market.
I had a few proof points of this on my recent trip to China, for example:
- One Shanghai company now has an “official Taobao policy” that staff must sign for their own courier packages. The business owner I spoke with said every day there were many packages delivered to his office, all for staff who were using Taobao for shopping.
- When I needed to buy a new suitcase, I turned to my online community on Sina Weibo. The overwhelming answer was, buy it online. High street retail was seen as too expensive.
- Two other conversations I had suggested that, for clothing and some foodstuffs, online was the way to go.
- 70% of China’s ecommerce market is C2C – consumer-to-consumer (think of western sites like Ebay and Trademe). This is a good analogy to what you’ll find on the streets of any Chinese city – alongside the high street retail stores, you’ll also find dozens of roadside stands selling anything from tofu sausages to socks to suitcases.
So, what does this mean for anyone launching a new product into China?
Real-world retail isn’t dead yet. But online retail is becoming an important credibility point. Particularly if your product is new, people will go online to see if your brand is being sold there. What will they find?