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Tag: E-Commerce

  • Zalora Indonesia plans to expand marketplace to boost sales

    Zalora Indonesia plans to expand marketplace to boost sales

    Zalora’s Marketplace initiative was launched last year to give an online platform to independent designers and sellers, who can create their own branded storefront within the retailer’s site.

    The company currently manages 500 small medium enterprises (SMEs) and aims to increase these numbers significantly in the coming years.

    Managing director of Zalora Indonesia Anthony Fung, Marketplace is become a promising business in Indonesia following the government’s plans to boost SMEs or startup companies in the country.

    Speaking at a press conference, Fung said, the company was looking at ways to boost the customer base through mobile phone users.

    “We have seen a big shift in consumer behavior. We are investing a lot of money in marketing and add more people to do mobile apps,” he told reporters at a press conference at Zalora’s office in Jakarta.

    The company said, a lot of its customers actually access the e-commerce platform using their smart mobile phones. Hence, the company will invest more to maintain mobile apps. According to the Zalora’s head of marketing, Jo Bjordal, mobile users in Indonesia are below 1 per cent of total retail users while in China the figure is 8 per cent. In five to10 years from now, he said, Indonesian mobile users will reach that level (8 per cent).

    In Asia, Zalora has drawn up marketing campaigns and promotions to boost sales in the upcoming festive season. Zalora plans to hold several events to boost their sales in coming months in Indonesia and Southeast Asian countries. In Indonesia, Zalora will hold a month-long discount called Zalora Great Sale starting October 6.  Zalora will hold 11/11 Online Revolution on November 11 in collaboration with China’s Alibaba, Cyber Monday, Black Friday, Christmas sale November 27 to December 25, and National Online Shopping Day on December 12.

    Bjordal said, last year, during the Zalora Great Sale programme, the orders saw a 10-fold increase in one day compared to regular days.

    Zalora is a part of Global Fashion Group–which counts AB Kinnevik and Rocket Internet as lead investors–that operates through five leading fashion e-commerce companies, India’s Jabong, Latin America’s Dafiti, Russia’s Lamoda, Namshi in the Middle East, and Zalora in South East Asia and Australia.

    “We have a footprint around the world today. We are the number one fashion e-commerce platform in emerging markets. Zalora now has presence in Indonesia, Singapore, Malaysia, Thailand, Philippines, Vietnam and Hong Kong,”  Fung stated.

    Zalora started its Indonesian operation in 2012.

    So far, Fung said, Zalora offers 1,200 brands in Indonesia and there were plans to increase this number to 3,000 over the next six months.

    He noted it was easier now to add brands as consumers were now familiar with Zalora brands.

    The company revealed that 70 per cent of Zalora customers were female in the 18-40 years bracket.

    Warehouse and Brands

    Zalora Indonesia, which set up its new warehouse in Cibitung, Bekasi, West Java province in April this year, claims the warehouse can store up to 2 million products, making it possibly the largest such facility in the country. Zalora has a physical store in Kota Kasablanka and also in HK and Philipines.

    Zalora partners with over 1,000 local and international brands. Zalora plans to invest in the merchandising market and acquire local brands in Indonesia. Zalora will continue to be aggressive in brand acquisition, Anthony Fung said.

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  • China August Retail Sales: E-Commerce Remains Robust

    China August Retail Sales: E-Commerce Remains Robust

    China reported August retail sales that grew 10.8%, which beat the consensus 10.6%. Most encouraging was that online retail sales remain robust, underscoring my bullish view on Alibaba. As for offline retail, jewelry grew off a lower base so we view this of a lower quality while it appears that offline electronic retailers are taking share from online retailers, which is a negative to JD.com. We see China retail numbers to be a good read-through to companies such as BABA and JD as well as North American companies with exposure to China such as Tiffany. We reiterate my bullish view on BABA and Nike and our cautious view on JD and TIF.

    Online retail numbers remain robust for the first eight months of the year, and this is a positive indicator to Alibaba. For the first eight months, online retail sales grew 36% and accounted for 9.8% of total retail sales vs. 8% a year ago. Worth reminding investors is that China leads the world in e-commerce penetration and we expect penetration to continue to grow, driven by mobile device penetration in second and third-tier cities as well as the lack of proper retail infrastructure in those cities. We can easily envision China’s online retail penetration to reach 20% in the next 10 years driven by those two factors as well as higher mobile consumption driven by online-to-offline services that are heavily invested in by BABA, Baidu and Tencent. Looking at the individual segments, online sales of services was up a whopping 41%, as were discretionary items such as food. Apparel grew 27% and other discretionary items grew 39%. All these figures imply that August online sales alone grew 27% y/y, still solid given the near-term weakness of the Chinese economy.

    As for offline retail, jewelry grew 17% y/y vs 14% in July but it was largely due to a lower base from last year. As such, we would not be quick to jump into TIF stock until we see material improvement from the demand side. Interestingly, home appliances and electronics accelerated in the month, up 14% vs. 8% in the prior month. This could potentially be a negative to JD.com given this could imply that BABA and Suning JV may be taking share from JD in the online segment.

    In conclusion, we remain bullish on BABA while cautious on JD and TIF.

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  • Alibaba feels China pain as it trims sales forecasts

    Alibaba feels China pain as it trims sales forecasts

    E-commerce giant Alibaba has succumbed to the crisis gripping the Chinese economy a year after the company became the world’s biggest float.

    Founder and former English teacher Jack Ma became an overnight billionaire when Alibaba launched on the New York Stock Exchange in September 2014, as the firm raised a record-breaking $25 billion (£16.3 billion) in a float valuing the company at $186 billion.

    Alibaba is the biggest player in the Chinese e-commerce market — where spending is set to hit $1 trillion by 2019 — accounting for 80% of online sales in China.

    The firm is also among the top picks of UK retail investors, according to fund manager Hargreaves Lansdown.

    But the company admitted today that a weakening Chinese economy has taken its toll on business, as it slashed forecasts for the total value of transactions it expects to take place in the current quarter.

    This will now be “mid-single digits lower” than the giant’s initial estimates for the quarter.

    Alibaba’s head of investor relations, Jane Penner, said consumers were still willing and able to spend but that the company had been seeing a “negative impact of the magnitude of the spending”. Average order values are also lower, Penner added.

    What is Alibaba?

    The latest fears over the e-commerce giant come a month after it reported its slowest growth in transactions for more than three years.

    Shares in the company are now below their $68 float price after a near-5% slump overnight to $60.91. The stock has halved since the end of May, when Alibaba’s shares hit $119 — valuing the company at a staggering $300 billion.

    The latest bad news out of China comes hard on the heels of a dramatic slump in imports — fuelling fears of a hard landing for the world’s second biggest economy — and a month of turmoil in global stock markets following Beijing’s sudden devaluation of the yuan.

    China also cut its official growth estimates for 2015 this week. China has also cut interest rates five times since November and intervened directly to stem plunging stock markets.

    Rathbones investment director Jane Sydenham said: “Investors are beginning to adjust to what was initially quite a shock in terms of the renminbi devaluation, share repurchases — normally those kind of activities on the part of central banks signal something really quite serious.

    “It’s taken some time for investors to adjust to the fact that clearly, growth is slowing, perhaps more than we’d thought.”

    Despite the gloom from Alibaba, shares rallied in China for the second day running on hopes of more government stimulus.

    Asian markets rose on Wednesday

    Shanghai’s main market gained 2.3% after the finance ministry set out plans to boost infrastructure spending and speed up reform of its tax system to support the economy.

    Japan’s Nikkei also saw its biggest single gain in seven years — rising 7.7% — as markers rallied on comments from prime minister Shinzo Abe raising hopes of a corporate tax cut and a new trans-Pacific trade deal.

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  • MatahariMall Sets Its Sights High in Booming E-Commerce Scene

    MatahariMall Sets Its Sights High in Booming E-Commerce Scene

    Since its soft-launch earlier this year, MatahariMall has garnered nearly 200,000 customers with 200,000 different products in its inventory offered by some 1,200 vendors, according to Hadi.

    It has also set up a 10,000-square-meter warehouse located near Halim Perdanakusuma airport in East Jakarta.

    Backed by Lippo, one of the nation’s biggest retail groups, MatahariMall offers an online-to-offline service that would allow customers to order their goods online and collect them at a nearby Matahari department store or Hypermart supermarket.

    Both Matahari and Hypermart are affiliated with the Lippo Group, as is the Jakarta Globe.

    The service will later also be expanded across Lippo’s network, to outlets such as the Books & Beyond bookstore chain, Hadi said.

    “We are very proud of the team,” said the Lippo Group’s John Riady. “The growth numbers are very strong and the team is very focused. Lippo and our other investors are fully committed to doing anything we can to support MatahariMall as it pioneers e-commerce in Indonesia.”

    Undeterred by the current economic slowdown, Emirsyah Satar, the MatahariMall chairman, said the site aimed to capture a 20 percent share of Indonesia’s online retail market over the next five years, banking on the country’s expanding middle-class population.

    “We can see that Indonesia’s e-commerce still lags behind our neighbor countries,” he said. “In fact, we see the economic slowdown as a momentum to boost online retail, because most people are now looking for more affordable products.”

    Lippo’s much-publicized venture has lured in a series of seasoned executives from Indonesia’s tech industry, including Hadi from Zalora, another popular e-commerce site; Emirsyah from Garuda Indonesia; and ex-Google Indonesia head Rudy Ramawy as vice chairman.

    Adrian Suherman, previously the CEO of aCommerce, a Thai e-commerce logistics provider, also recently joined the MatahariMall team as a commissioner.

    The Lippo Group in April appointed Credit Suisse and Bank of America Merrill-Lynch to lead its $200 million first-round financing, with Britain’s Rothschild as financial advisers.

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  • Chow Tai Fook changes strategies to tackle tough market

    Chow Tai Fook changes strategies to tackle tough market

    Chow Tai Fook Jewellery Group is renegotiating store rents and consolidating its retail network in order to manage rental costs, chairman Henry Cheng Kar-shun said on Thursday.

    Amid a downturn in the city’s retail landscape, the largest Hong Kong-listed jeweller in terms of market capitalisation had also shifted focus to smaller-priced items to attract customers, Cheng said.

    Business is getting tougher for retailers, with sales in July dropping 2.8 per cent from a year earlier to HK$37.6 billion, following a 0.4 per cent fall in June. The drop in July was the biggest since March’s decline of 2.9 per cent.

    Sales of jewellery, watches, clocks and gifts all recorded a smaller decrease of 5 per cent, after four months of double-digit falls.

    “There are a number of external factors that are out of our control, such as the macroeconomic conditions, the central government’s policies and the devaluation of China’s currency,” Cheng said. “What we can do is do our best to operate the business well.

    “While we are still making profits in all of our [Hong Kong] stores, we may consider cutting some to maximise profits. For example, if we have three shops on one street, we may opt for two in order to cut costs.”

    Facing a sluggish retail market, commercial landlords are now willing to set more realistic prices and reduce rents.

    Cheng said the company was renegotiating with landlords to lower rents and the extent of rent cuts would depend on the business performance of the store concerned, said Cheng, suggesting the average cut could be between 20 and 30 per cent.

    Chow Tai Fook in June reported net profit for the year ended March fell about 25 per cent to HK$5.46 billion from the previous year.

    Revenue dropped 17 per cent to HK$64.28 billion.

    The average selling price of gem-set jewellery fell 12.7 per cent and that of gold products declined 1.2 per cent.

    The company extended its e-commerce network to strengthen its capability to reach more online customers, particularly the younger generation, said Cheng, adding the online division was making profits.

    He was speaking at an event to mark the company’s unveiling of a diamond piece centred on a 24 D-colour internally flawless diamonds cut from a 507.55 carat rough diamond, known as the Cullinan Heritage, that Chow Tai Fook acquired for HK$275 million in 2010.

  • Wal-Mart says heavy e-commerce investments put a crimp on earnings

    Wal-Mart says heavy e-commerce investments put a crimp on earnings

    The retailer’s global online sales increased 16% in Q2, excluding the impact of the stronger U.S. dollar.

    Wal-Mart Stores Inc. says its heavy investment in e-commerce infrastructure is paying off, with online sales growing by double-digit percentages, but that it hit a rough patch in international online sales and that the spending is weighing on its earnings.

    The retail giant, No. 3 in the Internet Retailer 2015 Top 500 Guide, said Tuesday its global online sales, excluding the impact of the strengthening dollar, grew 16% in the second quarter. But investments in e-commerce are estimated to lower full-year earnings per share by between 6 cents and 9 cents, company officials said. With 3.23 billion shares outstanding, that suggests Wal-Mart will spend between $190 million and $295 million on e-commerce this year.

    “The highlight was solid growth in the Walmart.com and SamsClub.com U.S. businesses, while international was soft, due to economic challenges in several of our key markets,” chief financial officer Charles Holley said on the company’s earnings call. The international results led Wal-Mart to revise its e-commerce sales growth forecast for 2105 to the mid to high teens from the previous mid-20s range.

    Wal-Mart also said its e-commerce investments, meant to vie with Amazon.com and other online retailers, are vital given the competitive environment.

    “We’re pleased that the investments we’ve made are helping to improve our business,” CEO Doug McMillon told analysts during the company’s earnings conference call, according to a transcript from Seeking Alpha. “Even if it’s not as fast as we would like, the fundamentals of serving our customers are consistently improving. In this case, our desired changes require investments, which are pressuring earnings this year.”

    Also in the quarter, the retailer opened two automated online fulfillment centers in the U.S., each bigger than 20 football fields, and two more are coming this quarter, said Holley. The centers will serve customers this holiday season and serve as the cornerstones of Wal-Mart’s fulfillment network, he says.

    On the call, Wal-Mart executives discussed its deal, announced last month, to acquire the remaining 49% it did not already own in Yihaodian, a Chinese online grocery retailer that’s been expanding into other categories and is No. 7 in the Internet Retailer 2015 China 500 Guide. Wal-Mart spent $760 million in the quarter to acquire the remaining 49% of Yihaodian, the online retail site in China with 100 million registered users.

    “Our primary goal is to continue to accelerate Yihaodian’s core e-commerce business and maintain strong local Chinese expertise,” Neil Ashe, CEO of Wal-Mart Global e-Commerce, told analysts. “Now that we are the sole owners, we will be expanding our leadership team from within the Yihaodian business, from within Wal-Mart and from the e-commerce industry in China. We will also leverage Walmart’s global reach and scale to better benefit Yihaodian, including global sourcing. China is an exciting, dynamic, large and competitive market. We are excited about our long-term opportunity in China.”

    For the quarter ended July 31, Wal-Mart reported:

    • Net sales of $120.229 billion, relatively flat from $120.125 billion.
    • Wal-Mart did not report online sales but said e-commerce sales increased 16% globally when adjusting for the strengthening dollar, which is reducing the dollar value of sales outside the United States. The total value of purchases on Wal-Mart’s e-commerce sites in 11 countries increased 18% on a constant-currency basis. That includes sales by outside merchants selling on Walmart.com and other sites that offer goods from other retailers.
    • Net income of $3.475 billion, down 15.1% from $4.093 billion in the same period in 2014
    • A decline in operating income in the retailer’s three primary divisions. At Wal-Mart U.S. it was $4.819 billion, down 8.2%; at Wal-Mart International it was $1.277 billion, down 14.2%; and at Sam’s Club it was $428 million, down 13.4%.
  • MatahariMall aims for 20% of Indonesian e-commerce market by 2020

    MatahariMall aims for 20% of Indonesian e-commerce market by 2020

    MatahariMall, which is planned to be launched next September, is eyeing 20 per cent of the e-commerce market in Indonesia by 2020. That year, the total market volume is projected to reach US$20-30 billion, compared to US$1.3 billion currently.

    It was told by MatahariMall’s Chairman Emirsyah Satar to Berita Satu. He stated that the team uses Alibaba as their role model. As we know, MatahariMall is the first marketplace to use O2O (Online to Offline) concept since the very beginning.

    Satar said, “Currently, the e-commerce market in Indonesia is worth around $1.3 billion. It’s so low, not even one percent of the total national retail sales. In other countries, e-commerce could cover 5-8 per cent of total retail sales. So, we estimate that out market volume would reach around US$20-30 billion by 2020.”

    “Our network footprint is quite strong and well-distributed all over Indonesia. We also have the experience of doing offline retail. Users may inspect their desired products before purchasing them, thanks to the support by Matahari and Hypermart. So, they may touch, feel, and even return the product should they feel that the it doesn’t meet their expectation,” he continued.

    MatahariMall has been accessible at the moment, although it’s still in form of a teaser page. Satar claimed that the number of buyers is already quite significant.

    Challenges of the e-commerce industry

    Satar pointed out two main challenges of the e-commerce industry in Indonesia, which are infrastructure and regulation. Infrastructure refers to the poor distribution of the Internet network, while regulation refers to the government’s law.

    “For instance, the regulation that requires merchants to fill out their TIN or ID number before posting at marketplace. I don’t think it’s urgent, as the industry is still infant. It should be enforced once the right time comes,” he said.

    The government, led by the Minister of Communication and Information Rudiantara, is currently formulating the roadmap for e-commerce in Indonesia, as President Joko Widodo stated in the opening of Indonesia Convention Exhibition (ICE) last Tuesday.

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  • SingPost flourishes on eCommerce focus

    SingPost flourishes on eCommerce focus

    A firm focus on serving the booming eCommerce market has helped Singapore’s national postal service achieve a record first quarter profit.

    SingPost on Wednesday says in made S$46.6 million net profit in the first three months as its eCommerce strategy paid dividends. Its performance comes in an era when postal services internationally are struggling to break even and remain relevant as traditional mail volumes fall.

    Like every other mail service provider, traditional mail volumes declined in the quarter – by 1.6 per cent – but a modest increase in postal charges offset declining traditional postage income. However revenue from logistics, which includes SingPost’s eCommerce logistics business, soared 43.6 per cent to S$140.1 million – $15 million more than postage revenue.

    The company also achieved a one-off gain from divestments.

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  • E-commerce market in China is big enough for multiple players

    E-commerce market in China is big enough for multiple players

    Cross border e-commerce is gaining traction worldwide, partly because of rising business from China. Despite the rise in global players, US online retailer Amazon is not afraid of the competition.

    Amazon has felt the wind of late comers. Alibaba has brought the war onto Amazon’s home turf, recruiting small US businesses to join its sales network after its debut on the New York Stock Exchange last year.

    Amazon’s senior vice president of international consumer business Diego Piacentini says the market is big enough for multiple players.

    “Business is not sport, where there is one winner. Business has multiple winners,” Piacentini said.

    “The size of the business, particularly e-commerce, would be so large. There is room for global players. Amazon is going to be one of them, absolutely, Alibaba and Tmall is one of them and many others.”

    Besides talking the talk, Amazon has beefed up its operation in China since last year. It opened direct mail to China from six of its global locations. Amazon also set up a Chinese e-commerce website and increased its overseas purchases in China to bolster local sales.

    “For countries like China or India, they are not exposed to many years of modern retail, e-commerce, or mobile commerce. You can expect in the next few years, that the vast majority of retail activities in China and India would happen online,” Piacentini said.

    Last year, 18 million Chinese consumers spent US$213 billion overseas—more than double Amazon’s annual sales. For any global commerce site, such potential is hard to ignore.

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  • Facebook, Twitter to drive online shopping growth

    Facebook, Twitter to drive online shopping growth

    New data from Juniper Research predicts global eCommerce sales will reach $1.7 trillion this year – up more than 17 per cent on last year.

    And while recent growth has been buoyed by expansion of public Wi-Fi networks and 4G, the next round of growth will be driven by social media companies creating direct sales platforms.

    The new research, Mobile & Online Purchases: Cards, Carrier Billing & Third Party Payment Platforms 2015-2020 concludes that Twitter, Facebook, Pinterest and Instagram have already launched ‘buy’ buttons on their mobile apps.

    “Such players are also likely to enhance their sales prospects through strategic retailer partnerships, with Twitter already enabling users to link their accounts to Amazon,” the report said.

    The research also finds that online retailers are increasingly seeking to reduce time-to-consumer by launching same-day delivery, while ‘bricks and mortar’ stores now widely offered next-day in-store collection – often charging a premium for this option.

    But Juniper cautions that retailers need to deliver a consistency of message, branding and shopping experience across all channels.

    “Integration between in-store and online is critical if retailers want to maximise the extent to which they can identify a unique individual’s omnichannel shopping habits,” the report said.

    Author Dr Windsor Holden said the key is to ensure consumers are allowed to choose their own path to purchase rather than have it effectively mandated by channel limitations.

    The report also concludes that smartphones will account for more than 40 per cent of online transactions by 2020.

    “While carrier billing should provide content providers with a key mechanism for monetising digital content, its use for buying physical goods is likely to be limited by comparatively higher share of revenues demanded by network operators and billing platforms.”

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  • Food fight! The next battle for China e-commerce

    Food fight! The next battle for China e-commerce

    A number of e-commerce firms in the mainland are inking deals to import foreign delicacies, reflecting growing consumer worries over a series of domestic food scandals.

    JD.com, the mainland’s largest online direct sales company, announced on Monday the launch of a new channel dedicated to selling a range of authentic Australian food products, including milk, meat and fruit, as well as wine from Treasury Wine Estates. Australia is the latest entrant to JD.com’s online ‘country malls’, which already include France, South Korea and Japan.

    “Chinese consumers are increasingly enthusiastic about trying, buying and using products from all over the world” said JD.com founder and CEO Richard Liu.

    Online supermarket Yihaodian opened a similar exclusive channel for Canadian seafood and meat earlier this month in an agreement with Agriculture and Agri-Food Canada (AAFC). Alibaba, meanwhile, already leads the way in terms of foreign food products. Last week, the e-commerce giant announced it added 11 more countries to its Tmall Global site, a platform dedicated to foreign brands. Food is Tmall’s most popular product category, according to Alibaba.

    The transaction volume of imported goods purchased online could reach $245 billion in five years, with more than 200 million Chinese consumers engaging in cross-border shopping, said a recent report from Accenture and AliResearch, Alibaba’s research arm.

    The taste for imports comes as no surprise given the country’s ongoing battle with food hygiene. Last week, authorities seized a batch of smuggled frozen meat that was 40 years old. Scandals like these explain why 75 percent of Chinese have no confidence in domestic food safety, a March survey by the China Food and Drug Administration (CFDA) showed.

    “Food safety issues, an increased focus on health and wellness, and a growing willingness to spend on children have made organic or fresh fruits, meats and vegetables, and baby-related products top spending priorities this year,” Boston Consulting Group (BCG) in a report on Monday.

    While JD.com was unable to share top-selling brands, it told CNBC that dairy and wine had traditionally been two of the biggest selling categories of Australian products.

    A two-speed market

    E-commerce trends are only a partial reflection of Chinese consumption, consulting firm BCG noted.

    China has a “two-speed consumer market,” where middle to upper-middle-class and affluent households, known as high-speed consumers, make up the bulk of digital shoppers, it said. Forty percent of these consumers shop online frequently-at least once a week-compared with 20 percent of less affluent households, i.e. the low-speed consumers.

    Wealth gaps account for the difference between the groups, BCG explained.

    “The average affluent household is expecting nearly 11 percent income growth; the average aspirant household, only 6 percent. This 5 percentage point difference, given the vast disparity in income levels between these two groups of consumers, translates into a 20-fold difference in actual earnings.”

  • China’s e-Commerce market is 80 times larger than India

    China’s e-Commerce market is 80 times larger than India

    Retail e-commerce sales in India are expected to reach $17.5 billion (Rs 105,120 crore) by 2018, from $5.3 billion (Rs 31,800 crore) in 2014, according to data analysed by eMarketer, a digital-research firm, but only two of 10 internet users in India shop online.

    India’s e-commerce market is intensely competitive, with US giant Amazon establishing its presence in India in 2013 and Alibaba, the Chinese giant, planning to start selling by August this year. Flipkart, India’s largest e-commerce firm, recently raised $550 million (Rs 3,300 crore) at a valuation of $15 billion (Rs 90,000 crore).

    Despite having the third-largest internet user base in the world with 200 million users at the end of 2014, India does not feature in the top ten e-commerce markets in the world, according to an eMarketer report. The reasons centre on low Internet reach, slow internet speeds outside the metropolitan cities and poor customer services.

    India’s e-commerce sales in 2014 were $5.3 billion (Rs 31,800 crore), 1/80th the size of China’s $426.26 billion (Rs 2,557,760 crore) and 1/58th the size of the US’ $305.6 billion (Rs 1,833,900 crore).

    “If you look at Japan, China and US, e-commerce became popular as early as 2002-2003. It has taken them about 12-13 years to reach where they have reached.  E-commerce really took off in India only in 2012-13. It will take India also that much time to reach there,” Rajnish (he uses only one name), a technology expert, said.

    China: Number 1 in e-commerce with skyrocketing growth ahead

    China and the US accounted for more than 55% of global internet retail sales in 2014. China’s growth over the next five years will widen the gap between the two countries.

    China will likely exceed $1 trillion (Rs 6,000,000 crore) in retail ecommerce sales by 2018, accounting for more than 40% of the total worldwide.

    Globally, retail sales reached $22.492 trillion (Rs 134,952,000 crore) in 2014 but retail e-commerce sales stood at $1.316 trillion (Rs 7,896,000 crore, 5.9% of overall retail sales).

    E-commerce sales are expected to increase 89% to $2.489 trillion (Rs 14,934,000 crore, 8.8% of overall retail sales) in 2018.

    Digital-buyer penetration—a measure of digital reach—is a major factor in determining the success of retail e-commerce sales. India’s digital-buyer penetration was quite low at 24.4% in 2014 as compared to the global average of 41.6%.

    The UK leads the world with 88% penetration. Ironically, China with 55.2% and US with 74.4% penetration do not feature in the top five.

    Indian e-commerce has a long way to go

    “E-commerce in India still has a lot of friction,” Rajnish said. “Till that is solved, it will be hard for penetration to go beyond 30%. For example, India has very low credit-card penetration and the cash-on-delivery (COD) model is why Flipkart really took off.”

    People above 35 are not very comfortable using their debit card online. PayTm and others solve this problem but there is a lot of friction. “I use PayTm for Uber and it is still a process that has friction. In US, the return policy is very generous. I bought a coat from Amazon in the Bay area; it ended up being the wrong size. My experience of changing to the correct size was very seamless. When I bought a down jacket in Bangalore, and it ended up being the wrong size, getting the right size was really a painful experience,” said Rajnish.
    That view is echoed by Paritosh Sharma, an advisor to tech startups and an entrepreneur with PayUMoney, a digital-payment platform.

    “Digital buying has an attached expectation to it. I place the order and it should appear in front of me over the next two or three days. In many cases this does not happen. Also, in a lot of cases (especially in tier-2 and tier-3 cities) in India, if you get a product that is not of the exact quality that you ordered, returning it is a major problem. Most people, hence, prefer what’s available in a physical retail store,” Sharma said.

    There are two more reasons for low online sales, said Sharma.

    First, the internet infrastructure in India is poor. If one steps outside city limits, you automatically are shifted from 3G to an Edge (a lower-speed) connection, deterring buyers.

    Second, lack of good service and support. While most Indian e-commerce companies are sprucing up their support via phone and digital media, it’s quite haphazard. Most companies still lack processes to ensure customer satisfaction and trust.

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  • Singaporean retailers thrive on online market

    Singaporean retailers thrive on online market

    A study by eBay shows that Singapore’s tech savvy retail exporters, who use the company’s online market place, sell to an average 41 international markets.

    eBay defines retail exporters as those sellers on its site who garner US$10,000 in sales to global customers (that is buyers outside of Singapore).

    According to an eBay spokesman, Singaporean retail exporters have been experiencing solid growth on the back of a revitalised US dollar. In South-east Asia, Singapore is ranked second in terms of reach behind Thailand. Interestingly, Singapore’s ranking is five destinations higher than US retail exporters.

    Jason Lee, director, eBay South-east Asia, noted that the US is the top trade corridor for Singaporean retail exporters.

    “An exciting trend for Singapore businesses seeking new revenue streams is the speed in which entrepreneurs are able to become a retail exporter, with 22 per cent of Singaporean retail exporters on eBay hitting the US$10,000 sales mark in the past year alone,” he added.

    The top three categories that Singaporean retail exporters sell on eBay are jewellery and watches, cell phones and accessories and clothes, shoes and accessories.

     

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  • Chinese, South Koreans prefer online shopping to stores

    Chinese, South Koreans prefer online shopping to stores

    Online shopping has overtaken bricks and mortar retail as the most popular method of purchase in several Asian markets.

    That stunning revelation comes from a new report from real estate company CBRE How We Like to Shop Online which is based on responses from online consumer panels. CBRE warns the findings represent the emerging behavior of this important and fast-growing segment of all markets, but may not fully represent consumer behavior in markets with low online penetration.

    That said, the conclusions remain relevant to traditional retailers.

    “While 50 per cent of Asia Pacific consumers still physically visit a shop to make a purchase, findings show that in emerging markets such as China and India, the majority of respondents – 76 per cent and 68 per cent respectively – use online shopping as their most commonly used method of making purchases,” said CBRE in an overview of the report.

    “This is also the case in more developed markets of South Korea and Taiwan where 73 per cent and 55 per cent of consumers respectively, also said their primary method of making purchases is online.”

    “For emerging markets, given the lack of quality retail space – particularly in lower tier cities – advances in technology and logistics networks mean that online retail is often the most efficient way for retailers to reach their customers,” said Jonathan Hsu, head of occupier markets research, CBRE Asia Pacific.

    Along with convenience, pricing ranks as one of the top reasons why consumers shop online – 63 per cent of the total number of respondents surveyed identified this as their key deciding factor. These correspond to the same deciding factors when shopping at physical stores.

    “With 56 per cent of Asia Pacific consumers using their desktop or laptop to check prices of products online, price transparency is an important aspect for retailers to consider,” said Joel Stephen, senior director, head of retailer representation, CBRE Asia.

    “We recommend retailers review their regional pricing strategy, particularly in China and South Korea where more than two-thirds of consumers identified lower prices and better offers as the main reason behind their decision to shop online. In Asia Pacific, foreign brands – in particular luxury – are often more expensive than other regions due to import duties, exchange rates and the franchise model impacting the price. This may encourage consumers to consider alternative sales channels, such as overseas online markets, in search of better deals,” said Stephen.

    The ability to compare products without having to physically visit individual stores is another key factor for the region’s consumers when shopping online. This trend is more prominent in emerging markets such as Vietnam (64 per cent), China (61 per cent) and India (58 per cent) where quality shopping centers or shops are often located far from each other.

  • Chinese language thirst for funding wine insatiable

    Chinese language thirst for funding wine insatiable

    Acker Merrall & Condit, the world’s largest wine auctioneer, says consumers from Hong Kong, China Macau and Taiwan accounted for greater than 48 per cent of worldwide gross sales by worth within the final yr.

    “Their urge for food for the best wines stays robust,” the corporate says.

    Acker Merrall has just lately developed a brand new format, ‘Connoisseur’s Membership’ reside public sale in Hong Kong, which is simulcast in Beijing, Shanghai and Taipei. It has additionally unveiled a brand new cellular App permitting clients to bid whereas on the transfer, and runs month-to-month internet-only auctions in Hong Kong.

    These improvements, squarely aimed toward Asian collectors, helped Acker Merrall shut the primary half of the 2015 wine public sale season with over US$40 million in income, setting 750 new world data, of which greater than two-thirds have been Burgundy.

    “What being primary once more in each the US and Hong Kong markets actually means is that the World’s Prime Collectors proceed to decide on Acker Merrall,” stated chairman John Kapon.

    “We work onerous, and we play onerous, too. We’re wine lovers initially, and we’re very grateful to share our love with probably the most passionate collectors all over the world, a world that continues to develop with every new day.”

    In tons, or quantity of wine moderately than worth, the US nonetheless accounts for 61 per cent of the corporate’s gross sales, and 41 per cent of the worth.

    “The web public sale enterprise skews the info a bit on the subject of the variety of tons, since that enterprise is rather more developed in America, and since we simply began them right here in Hong Kong,” stated Kapon.

    “However it does present that America is shopping for extra A to Z, accumulating extra wines and getting stronger usually. It additionally exhibits how a lot potential stays within the Far East. China continues to be actually in its improvement levels but continues to spend probably the most cash.

    “With 4 new stay auctions and month-to-month web auctions added this yr in Hong Kong, together with simulcasts in three new main (and thirsty) cities, Higher China stays an thrilling and critically necessary market.”