Ecommerce China: huge potential for western Brands !

Ecommerce China: huge potential for Second hand Brands ! 

An arms race between the two most powerful Internet companies in China has increased again, with one of them, Tencent, announcing an investment that grows further into the e-commerce - territory long controlled by rival, Alibaba.

Tencent said Wednesday it would pay 1.5 billion Hong Kong dollars, or $ 193 million for a stake of nearly 10 percent in China South City Holdings, which operates warehouses and stores of commercial factory and offers a variety of other logistics services to retailers. The shares of both companies are listed in Hong Kong.

Alibaba VS tencent

Until recently, Alibaba and Tencent seemed largely content to develop their own areas of expertise, without moving too aggressively on grass on the other. Alibaba has e-commerce sites like Taobao and Tmall, while Tencent operates messaging services like QQ and WeChat.
But during the past year, with Alibaba position for an initial public offering and Tencent eyeing the lucrative gains from the booming online business in China, the gloves have come off.

"Tencent is absolutely trying to get more aggressive in the e-business space, Alibaba challenging, as most of their services are now overlapping," said Olivier from ecommercechinaagency.com.

In October, Jack Ma, chairman of Alibaba, announced it was closing its WeChat account and move to a new messaging service called Laiwang Alibaba. He urged his followers to do the same.
Last week, Alibaba said he intends to establish a platform mobile game from which it would offer developed by outside programmers applications, revenue sharing with them. Tencent generates more than half of its revenue from games. Most are free, but it relies on the broad scope of WeChat, who says he has over 270 million active users per month to fuel demand for purchases in the game determined by the following players to stay ahead of their friends.

 Ecommerce market in China

The ecommerce market in China grew 38 percent last year to $ 13.8 billion, according to a government agency that oversees the industry. Mobile games have been the fastest growing segment, with revenue more than tripled to $ 1.8 billion.
E-commerce is a much larger company. Last year, sales in China, including online transactions between businesses, increased $ 335 billion from $ 221 billion in 2012, according to a research center of Alibaba.
On unofficial holiday for single people in November that turned into the equivalent of Cyber ​​Monday in the United States, the Chinese online retailers face a huge amount of promotions. Alibaba reported $ 5.75 billion in transactions processed through the payment system online sales day this year.


But Alibaba is not resting on its laurels. In December, the company said it was investing about $ 360 million to Haier Group, one of the largest appliance manufacturers in China. Companies said they would establish a joint venture of logistics support delivery operations of Alibaba. Alibaba has also reached an agreement last year with Sina Weibo, the operator of the first platform of microblogging in China, which aims to counter the popularity of WeChat and drive more users to the sites of e-commerce Alibaba. Continue reading the main story Continue reading the main story Advertising
Tencent responded with investments of its own, including the purchase of a stake in a search engine called Sogou. And the company has moved to develop its own e-commerce capabilities, which include sites like QQ and 51Buy Wanggou, adding a pay function WeChat.
Tencent said the agreement with China South City strengthen its e-commerce reach. The two companies will work together to help small and medium enterprises to develop their business retail online, they said.
 
"The cooperation with China South City allows us to jointly facilitate these companies online migration, using the physical locations of the South China City and logistical capabilities and platforms to use the Internet Tencent and technology capabilities, "Martin Lau, President of Tencent, said in a statement.

In addition to warehouses and other logistics facilities, China South City operates factory malls featuring brands such as Nike and Adidas. Tencent and China South City said they would "explore opportunities for cooperation services online sales for branded products."
Tencent has its headquarters in Shenzhen, China where South City also has its center


Last week the Chinese Ministry of Commerce issued a report on the turnover in online retail. It shows that last year the Chinese have spent more online than U.S. consumers.

Rapid growth of Ecommerce in China

According to the 'China E-commerce Development Report' 2013 China last year generated a total figure online business 1.85 trillion yuan ($ 217.9 billion). This is an increase of 41.2% over the previous year. And Chinese e-commerce grew three times faster than the rest of the retail and currently represents 7.8% of total retail sales in China.
With such growth China is better than the United States, which in 2013 displayed an online sales of 262.51 billion dollars (192.85 billion euros), an increase of 16.9%.

302 million e-shoppers in China

Last year China had 302 million e-customers, an increase of 24.7% compared to 2012 and it is expected that by 2015 30 million people will have a function related to electronic commerce. The report also indicates that in 2013 the total amount outstanding in e-commerce, including in particular transactions between companies has reached 10 billion yuan (1.2 billion euros).
"Driven by technology and innovative business models, e-commerce is one of the new engines of economic development in China and help Chinese enterprises to explore the international market," said Li Jinqi, e-commerce director within the Chinese Ministry of Commerce, during the presentation of the figures.

84% via Alibaba group taobao/tmall

These figures also possible to locate huge amounts realized by Alibaba. According to the latest estimates, in 2013 Alibaba achieved a turnover of $ 248 billion (€ 182 billion) in China through its online marketplaces Taobao and Tmall. This therefore équivait 84% of the total turnover of the Chinese e-commerce.

The staggering growth rates, all powerful groups, bulimic consumer ... China in 2013 became the world leader in e-commerce. A market for very closed time ...

E-commerce to a new bubble?

The information has not yet caused a stir in 2013, China has become the world's number one ... e-commerce. With a total turnover of $ 300 billion, the Chinese e-commerce is passed American and European. And this is just the beginning are Features. While in Western countries growth is slowing in the Middle Kingdom is euphoria. Between 2009 and 2012, the growth of online commerce there was an average of 70% when the United States it was only 13%.

And this is not only because the country has a huge domestic market of 1.3 billion people. The e-commerce revolution is cultural in China. Its penetration in the country is 6.3% according to the agency iClick Interactive, against 5% in the United States. This is easily explained.
It is now estimated that 475 million Chinese have a purchasing power equivalent to a Westerner (the number of Chinese consumers who can affect a third of their income on discretionary spending). However, this population, which is also very connected (there are 500 million Chinese Internet) does not have an equivalent in the United States and Europe commercial offer. Large groups global distribution remain largely American and European. This population is turning to the internet to satisfy his appetite (her bulimia?)