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Boston Consulting Group and Chinese online retailer Alibaba have published a joint study "The New Retail: China's Lessons for the West." It reports that Chinese consumers spent about $ 750 billion online in 2016, which is more than in the same time spent by Americans and British combined.
The authors of the study are not inclined to see the cause of this only in the large population of China. When online trading appeared in the USA in the 1990s, even ordinary retail was very poorly developed in China, which was just in beginning of its market reforms. Americans, already accustomed to high standards of trade, had to rebuild and change their preferences, then the Chinese just "jumped" through consumption in the usual retail.
"As a result, e-commerce quickly became the norm in China, and its development was so rapid that China was already ahead of it in the West", the study said.
The situation developed in the same way in the segment of mobile online trade. "Many Chinese users have jumped through the PC era, immediately starting to use smartphones. This can also explain why Samsung phones with large screens became popular in China earlier than in Western countries", the authors note.
According to forecasts of BCG and other analysts, by 2020 online purchases made with the help of smartphones will account for 74% of all electronic retailing in China, compared to 46% in the US. At the same time, the dynamics of e-commerce in China shows no signs of slowing down. In the next five years, it will grow at an average of 20% per year. This is twice as fast as in the US or the UK.
Analyzing the market’s dynamics and consumer behavior in China and Western countries, experts conclude that all online retailers are struggling with approximately the same tasks. Among the top priorities is the creation of universal sales channels. They must combine the strengths of online and offline retail, give users an easy and at the same time effective opportunity to purchase, select and compare products and use the supply chain.
"The difference between online and offline trading will disappear in this world, and how the consumer thought and behavior will be the main determining factor for how sellers behave", the researchers expect. "Market players will focus on more active involvement of customers by personalizing the proposed range. This is what Alibaba calls the "new retail".
source: bcg.com
The authors of the study are not inclined to see the cause of this only in the large population of China. When online trading appeared in the USA in the 1990s, even ordinary retail was very poorly developed in China, which was just in beginning of its market reforms. Americans, already accustomed to high standards of trade, had to rebuild and change their preferences, then the Chinese just "jumped" through consumption in the usual retail.
"As a result, e-commerce quickly became the norm in China, and its development was so rapid that China was already ahead of it in the West", the study said.
The situation developed in the same way in the segment of mobile online trade. "Many Chinese users have jumped through the PC era, immediately starting to use smartphones. This can also explain why Samsung phones with large screens became popular in China earlier than in Western countries", the authors note.
According to forecasts of BCG and other analysts, by 2020 online purchases made with the help of smartphones will account for 74% of all electronic retailing in China, compared to 46% in the US. At the same time, the dynamics of e-commerce in China shows no signs of slowing down. In the next five years, it will grow at an average of 20% per year. This is twice as fast as in the US or the UK.
Analyzing the market’s dynamics and consumer behavior in China and Western countries, experts conclude that all online retailers are struggling with approximately the same tasks. Among the top priorities is the creation of universal sales channels. They must combine the strengths of online and offline retail, give users an easy and at the same time effective opportunity to purchase, select and compare products and use the supply chain.
"The difference between online and offline trading will disappear in this world, and how the consumer thought and behavior will be the main determining factor for how sellers behave", the researchers expect. "Market players will focus on more active involvement of customers by personalizing the proposed range. This is what Alibaba calls the "new retail".
source: bcg.com