Comments (0)

By Angie, June 15, 2010 7:05 pm

To continue last week’s post about e-shopping (because this is a pretty hot topic and it’s not going away any time soon!), find out which city shops the most online, and which country is hoping to grab a piece of China’s e-shopping pie.

Online Shopping Boom

According to the China Internet Network Information Center (CNNIC), one out of four Chinese netizens shop online.  In 2009, China’s online trade reached 248 billion yuan ($36.4 billion USD), up 94% from 2008.  This number is expected to reach 1 trillion yuan by 2013.

From this ---> to This!

Shanghai #1 in e-Shopping

Shanghai residents took the top prize in spending the most time online AND also spending the most money there – nearly at the level of developed countries.    Taobao recently released an online shopping report that compared the internet spending of people in Shanghai, Beijing, Shenzhen, Hangzhou, Guangzhou, Nanjing, Suzhou, Tianjin, Wenzhou and Ningbo.

Shanghai consumers cashed out with 17.42 billion yuan in online spending in 2009.  In 2^nd and 3^rd place were Beijing (RMB 11.25 billion) and Shenzhen (RMB 6.48 billion).

Annual spending (May'09-May'10) power of China's top 10 e-spending cities. Source: Taobao

According to the report, in all ten cities, 25 to 34 year old consumers were the driving force for online shopping, making up 62.5 percent of the sales.

Led by Taobao

Taobao boasts an 86% of China’s market share.  With a name meaning “hunting for treasure”, they actively aid the consumer’s hunt by incorporating tools that ease the shopping process.  Taobao instant messenger is an easy communication channel for buyers and sellers and a platform to foster trust and answer questions in real-time.

The company has also been serious about establishing itself as a credible enterprise and has spent 100 million yuan (15 million dollars) in an ad hoc campaign to proclaim its zero tolerance policy for fake goods, closing all online stores selling fake products.

Large retailers getting on board

The power, reach and influence of Taobao cannot be denied.  China’s biggest Xinhua Book Store has an outlet on Taobao and in April, Japan’s UNIQLO also opened a shop.  Even airline company, China Eastern, will soon set up an online ticket store on Taobao.

Taobao’s strategy for the next year is to facilitate the business to consumer platform, making it easier for companies to sell products online to an established (and growing!) consumer base.

Japan getting in on Chinese online shopping

The fervor and passion of China’s e-shoppers is not waning any time soon and others have picked up on this trend, including Japan’s biggest online shopping mall operator, Rakuten (sidenote: they’ve got a great tagline – “Shopping is Entertainment” and their 2009 revenues exceeded US$3.2 billion).  Partnering with Baidu, Rakuten will begin operations on China’s largest online mall in July.  This enables Baidu to start playing in the e-commerce space and focus on a B2C strategy.

Rakuten's English Landing Page

Online Shopping Addiction becoming a real concern in China

A group of e-shoppers have identified themselves as being members of the “internet shopping tribe”, also called wang gouzu (网购族), leading to online support groups for e-shopping addicts.  In one of these groups, an “addict” described the thrill of finding something online priced cheaper than retail and getting a ‘high’ when pressing the purchase button.  According to Sina.com, Chinese shoppers each spend an average of RMB 10,000 per year online.

What’s next?

With the sheer size of the Chinese population, their rapid adoption of the internet and the vast untapped market (China’s internet penetration rate was 28% as of January 2010), and the advancement of delivery routes into lower tiered cities, China’s e-shopping space is an area companies are not taking lightly.

.

Comments (5)

By Angie, June 9, 2010 12:40 am

Online shopping is a big deal in China.
According to the China Internet Network (CNNIC), 632.9 million people made online purchases last year.  In major cities like Beijing and Shanghai, 40% of the online population will often buy products online.

We saw it in our mom research.  We saw it in our youth research.   In this post, I’ll explain the concepts of Tuangou, Shike, tier differences in e-shopping amongst youth, and also the newest form of group e-shopping in China.

Tuangou
Tuangou (group shopping) started offline; with consumers meeting up at stores in large groups to add physical weight to their cause (that’s why it is also referred to as mob-shopping).  Next, it became a pure online-shopping experience, where consumers banded together with others they met via forums. The initiator seeks out the vendor and negotiates online on behalf of those who raised their virtual hands to purchase the product. The idea spread to youth who were beginning to purchase more and more online. One Youth Surveillance respondent told us that she recently joined an online group whose objective was to gather 20 buyers so that they could get a discount buying jewellery with a Taobao seller.

e-Shopping is not only about transactions
It’s about experiences!  It’s about teaching and learning, reviews and entertainment.  So much so that even Taobao has incorporated a new video component service.

Tiered differences
Through Lower Tier Youth Surveillance, we also saw tier differences in the way youth shop online.  Naturally, tier one youth are the most e-shopping savvy and will seek out ways to save money, such as tuangou.  Another concept called Shike has become popular amongst this group – it is a concept that enables consumers to test products before launch and send in their product reviews, thus involving them in the process and fueling their brand sirening.

Tier 3 youth on the other hand, view e-shopping sites as a platform to learn about products they don’t have access to and they view sites like Taobao as entertainment.  Even students who were not on Ren-Ren or Kaixing 001 were on Taobao and they would cite it as one of their favourite sites, despite not making any purchases.

Tier 3 youth view online shopping sites as entertainment

What now?
Within the past few months, an even newer group e-shopping concept has blossomed in China.  The premise of it is that through a site, a retailer offers a special discount on a product/service on the condition that it will be honoured if enough people sign up for the discount or purchase that product/service in advance.  Basically, it takes the “old” format of posting on a BBS/Forum: “hey guys, anyone else want to buy this lamp too?  Let me know and we can see if we can get a group deal”, to something organized, efficient and controlled by the retailers themselves.

This format has grown rapidly.  According to the China Daily, even during the past two months, sites offering this kind of service have ballooned from a mere handful to over 400, with Taobao and even Kaixin001 launching their own version of group buying websites.  Other sites include: Meituan.com, Lashou.com,  and ftuan.com.

Ftuan.com and Meituan.com: Lower left hand side shows the number of participants still needed to achieve the group discount.

Chinese consumers are really serious about taking their traditional practice of bargaining, online.  Are you keeping up with them?

.

Comments (2)

By Angie, June 2, 2010 6:24 pm

Starcom China partnered with Microsoft to conduct a thorough study on the secret online lives of Asian mums. The study spanned 8 regions (China, HK, Taiwan, Singapore, Malaysia, India, Japan and Korea) and was conducted using quant (2,859 respondents) as well as in-home sessions, chatting with the moms and peeking over their shoulders as they showed us their online favourites.

The findings will make it easier for marketers to target moms, knowing not only the sites they visit, but also the motivations behind their online decisions.  A few interesting conclusions we came to include:

- We can’t only look at mums as a whole group.  It’s crucial to consider mum-stages – from when the woman is a mom-to-be, to mums with a young child aged 0-2, toddlers 3-5, and older children 6-10 and 11-17.  Each of these mom-stages will use the internet for specific purposes and the online contact choices she makes will differ.

- Mums are talking about you!  She is a brand ambassador, so take advantage of this and give her noteworthy items to share. In fact, 59% of Asian mums even said that she often convinces her family and friends to buy the same items she buys.

- Mums trust other mums – even if she doesn’t know them in person.  Mom’s online network is important to her.  Many of the contacts she makes online are faceless names, yet she will still turn to them for advice and place a great amount of trust and value into their opinions about child-care products and purchase decisions – sometimes even more than her ‘real’, offline family and friends!  (This is especially the case for China moms)

Below is an article in MEDIA discussing this study:

E-commerce revolutionises Asian mums’ buying habits

by Kenny Lim    27-May-10, 12:06

Mothers have long been identified as the key target market for consumer brands, but a recent study shows just how much new media channels are imacting their purchasing habits.

Dubbed ‘Secret online lives of Asia’s mothers’, the research from Microsoft and Starcom MediaVest Group shows certain nuances of mums from eight key markets across the region. However, one aspect that should really get marketers and brands excited is the growing acceptance of e-commerce and how mothers are embracing online shopping.

In terms of numbers, over two-thirds of the 2,859 mums polled had purchased child/family products online and close to 70 per cent plan to do so in the next 12 months. For individual markets, online shopping for kids and family is most popular with mums in China (87 per cent) and Korea (82 per cent). When it comes to buying products for personal use, Chinese and Korean mums also lead, with 94 per cent having made an e-purchase.

Across other parts of Asia, percentages of mothers shopping online might not yet yield high numbers owing to lesser e-commerce infrastructures. But uptake of e-shopping can only grow as new generations of online savvy young women enter motherhood and e-commerce infrastructures evolve to deliver against mums’ online shopping needs and expectations of the total shopping experience.

Joanna von Felkerzam, director of research and insights for Asia-Pacific at Starcom MediaVest Group, explains the upsurge: “Shopping online taps into a universal truth about mums – that they are smart and need to feel like they are making smart choices. Mums have little time to themselves and online shopping lets them take care of their needs when it’s convenient. It delivers on their need for reliable product access.”

According to Maile Carnegie, general manager, P&G Marketing, Asia, brands need to be where mums are receptive to receiving their message. “Increasingly this is in digital. While there is still a place for other media channels, increasingly our more successful brands have an integrated media plan that has a strong digital component.”

But brands also need to be aware that expectations of shopping online also differ by market. In Taiwan, mothers love online shopping as it frees them of in-store consultant pressures. In Malaysia, meanwhile, mums appreciate special offers and promotions. In markets such as Japan, China and South Korea, mum-targeting websites offering cheaper alternatives to retail shops figure highly too.

Kenneth Andrew, marketing director, Microsoft Advertising Greater Asia-Pacific, says more interactive online spaces in the lead-up to the purchase decision or to engage mums in the lead-up are critical. “When exploring creating an online experience to influence purchasing decisions, brands need to consider where mothers across Asia will access their content,” he says. “This will mostly be in spaces that brands already own – micro-sites and corporate pages.These types of spaces can include interactive aspects like e-commerce, feedback pages and company blogs.”

Social spaces such as networks, forums and blogs are now important as well, as the majority of mothers (85-86 per cent) are active readers of online social content and three-quarters of them are contributors. Two-thirds are social networkers and 56 per cent update their profiles each week.

Therefore, through giving mums an optimal online shopping experience, coupled with them gravitating towards social and interactive spaces, mothers will continue to be ideal brand ambassadors.

With mums embracing e-shopping, brands and marketers cannot ignore post-purchase scenarios and behaviours as well.
“Mums and consumers don’t randomly end up on web pages and e-commerce sites to buy something,” says Pushkar Sane, chief digital officer, North and South Asia, Starcom MediaVest Group. “If a mum buys something and they like it, they are more than likely to recommend the brand to someone else. It doesn’t start and end as an e-commerce transaction now.”

http://www.media.asia/searcharticle/2010_05/E-commerce-revolutionises-Asian-mums-buying-habits/40072