I'll post some selective chapters and tables from the report.
Online retailing
Asian markets, especially China, are driving growth in e-commerce globally. They are also well primed for sales made using mobile devices (m-commerce) and social media (s-commerce). The latter is still nascent, but interest has been lodged by Asian firms. Japanese e-commerce firm Rakuten has invested heavily in online pinboard community Pinterest, with a view to using the network as a storefront for popular items. More recently, Alibaba’s purchase of a US$586 million stake in Sina Weibo,64 a Chinese Twitter-like service, has highlighted the value that social media could hold for online retailers.
China is already the world’s largest e-commerce market. According to iResearch Consulting Group, year-on-year growth in online sales in China slowed in 2013, but was still estimated at 42%,65 reaching US$306 billion. This compares with estimated sales in the US of US$263 billion (up by 16.9% year on year66), according to the US Department of Commerce. McKinsey, a management consultancy, expects Chinese e-commerce sales to reach US$650 billion by 2020.67 In China, mobile payments accounted for 8% of total online transactions in 2013, up from just 1.5% in 2011. Data from iResearch show that 26% to 30% of web visits (through browsers and apps) are made by smartphones and tablets, and mobile devices already contribute to 15% of orders. If the current trend continues, there is a high likelihood that mobile payments will account for 20%-30% of online transactions by 2016.
The market opportunity is clear, but non-domestic players will find it difficult to tap into. Chinese firm Alibaba has been commanding the world’s attention, having launched a record-breaking IPO which values the company at over US$230 billion. As China’s leader in e-commerce, Alibaba owns several major e-commerce sites including Alibaba.com, Tmall and Taobao Marketplace. It accounts for almost 40% of China’s B2C e-commerce market and dominates eBay-style “marketplace” selling. The company is also developing international ambitions as it outstrips its US rivals Amazon and eBay. In the three months to 30 June 2014, Alibaba outsold Amazon and eBay combined by reporting GMV (gross merchandising volume or sales made through its portals) of RMB501 billion (US$82 billion).68 This compared with GMV of around US$20.5 billion for eBay and about US$37 billion for Amazon over the same period. (Amazon does not report GMV but reported direct sales of US$15.25 billion, which accounted for an estimated 41% of total sales.)
Despite the focus on Alibaba and Chinese e-commerce, other Asian markets such as India are creating a buzz of their own around social media potential, although actual results remain minuscule compared to China. According to the Internet & Mobile Association of India (IAMAI), Indian e-commerce rose by one-third to reach Rs629.7 billion in 2013 (about US$10.5 billion). Moreover, the IAMAI reported that 71% of Indian e-commerce was for travel.
Indian online retail is hampered by poor infrastructure, low Internet penetration and difficulties with basic enablers like online payments. Regulation presents another hurdle, especially to foreign entrants who cannot sell directly but can invest in marketplace-driven ventures, which host and fulfil for domestic third-party sellers.
The number of Internet connections is estimated by the IAMAI at 243 million, a large number in itself, but less than a quarter of the population, although the number grew by 31% year on year in 2013. More significant is the rapid growth in mobile Internet users, opening the door for mobile commerce (m-commerce). Reliable estimates of mobile Internet users are not available since most consumers continue to access the Internet through WiFi. But the number of 3G subscribers in India is expected to have grown to 88 million in 2014, from 56 million in 2013, and the number of smartphone users to 116 million in 2014 from 67 million the year before.69
Nasscomm, an industry association, estimates that e-commerce sales in India will reach US$100 billion by 2020, creating up to 50,000 jobs in the process—although global tech consultancy Forrester Research has set a more modest forecast of US$16 billion for online retail by 2018. Expectations have led to a host of firms—domestic and foreign—expanding aggressively to ensure they are well placed when the market takes off.
Snapdeal and Flipkart, the two largest domestic players, both have ambitious goals. Snapdeal, a marketplace seller which boasts 25 million registered users, hopes to emulate Alibaba’s success and has set an annual transaction target of US$1 billion on its platforms by the end of 2015.70 Flipkart, which merged with fashion portal Myntra in May, sees apparel retail as the next area of growth, targeting a 60-70% share of Indian online fashion.71
Much of the current frenzy of activity could also be due to timing. Despite closing off avenues of foreign investment in multi-brand retail, there are expectations that liberalisation to allow foreign ownership of e-commerce ventures is likely to come to pass soon. Walmart has already announced significant investment plans in its Indian technology business, in anticipation of deregulation.72 Amazon and eBay both have a foothold in India. Amazon, initially through its Junglee. com portal, but more recently under its own brand, has been present in India since 1998 and operating an online marketplace since 2012. eBay, meanwhile, has a modest direct presence but has also invested heavily in domestic firms, notably Snapdeal.73
As with multi-brand retail, anticipation over the potential of Indian e-commerce could be premature. Despite the investment, Indian e-commerce players have yet to see their activities become profitable. Rapidly rising sales have done little to address the high capital investment required to get established in e-commerce. With annual per capita consumer expenditure of around US$970, margins on any e-commerce venture will remain tight, although it will take a lot to dampen the current optimism around India’s e-commerce future.
Japan has the fourth-largest number of Internet users in the world after the US, China and India, along with a dynamic mobile telecommunications sector. It therefore offers huge potential for online and mobile shopping. Japan’s many convenience stores already offer multimedia kiosks for customers and often act as
collection points for e-commerce orders, a trend that has made its way to South-East Asian markets. Rakuten, a local firm, and Amazon.jp, the local subsidiary of the US-based Internet retailer, are the two largest online retailers in Japan, with market shares of 24% and 12% respectively, according to New York-based Goldman Sachs. Rakuten’s virtual mall hosts many smaller retailers, while Amazon focuses on selling directly to consumers. However, Rakuten has been aggressively buying new businesses overseas in its ambitious attempt to compete with Amazon on the global market.74
Yahoo! Japan has a 4% share of the online retail market in the country, operating a similar business model to Rakuten. Other players include Zozotown, with an online mall, and other specialised online retailers.
E-commerce in Taiwan has also grown strongly, recording double-digit growth in sales in recent years. The Ministry of Economic Affairs expects the value of e-commerce sales to surpass NT$1 trillion (US$33.6 billion) in 2015, up from NT$767 billion (US$25.7 billion) in 2013. Retailers are increasingly focused on improving their online offerings, including raising security and delivery standards. In late 2012, regulations were relaxed to allow small businesses to carry out online credit-card transactions. Leading domestic e-commerce retail platforms include Yahoo!, PayEasy and PChome Online. Chinese e-commerce firms, such as Alibaba’s Taobao, have already made rapid advances in the Taiwan market, largely free from restrictions. Leading Taiwanese e-commerce firms include Yahoo!- owned Kimo, PChome, Fubon Group’s Momo, PayEasy, and Rakuten Taiwan Ichiba.
Hong Kong’s heavily-concentrated population and high level of Internet penetration make it a promising prospect for online retail. A culture that favours bargain-hunting and a hands-on shopping experience will mean that a large amount of shopping continues to be done offline. Yet, couponing and Groupon-type sites, as well as social media or mobile applications linking location services to special offers, are increasingly blurring the line between online and bricks-and-mortar retail.
Electronic-goods retailers are the main beneficiaries of e-commerce, but apparel and also health and beauty products are becoming increasingly popular. Taobao and Tmall (both owned by Alibaba) as well as Amazon are among the most popular sites.
A wealthier Asia
Hopefully, before they wake up, China's local retailers (both online and physical) will have grabbed the lion's share.
4.28 trillion US dollars of 2014!!
That's an amazing number for China.
More and more people are flooding to shopping centres or buy stuff online.
Tonight we are going to one of them in Wuhan to celebrate my mother's birthday.
Electronic appliances
Hopes for China's Xiaomi, Huawei, Lenovo, Haier, TCL, Hisense， etc
