China's e-Commerce is Going Through the Roof

China's e-Commerce market continues to grow rapidly and total online retail spending in China is forecast to grow at a compound annual rate of nearly 20% until 2019, when it should exceed U.S.$1 trillion, according to a new forecast from U.S.-based market research company, Forrester Research.

According to the report, the growing number of middle-class and affluent Chinese consumers adds to online demand for a wide variety of high-end products, such as fresh food, imported goods, and automobiles. The convenience, variety, and fast delivery associated with online purchase will boost e-Commerce in these new categories.

Major web players, Tmall and JD.com, will continue to dominate China’s e-Commerce market, with respective market shares of 57% and 21%.

Along with rapid growth in e-Commerce, the country's express delivery companies are expanding onto the turf of their international counterparts in cross-border services. Last month, one of the largest logistics companies in China, Sinotrans, partnered with a small Chinese Internet company called Netease Inc., while Chinese delivery services company, SF Express, also launched a portal in January 2015.

Finding senior staff is a major challenge for local express firms
The growing competition among Chinese delivery enterprises, as well as with international express companies such as UPS, FedEx and DHL, has also intensified efforts by Chinese express firms to hire, often foreign, senior executives, who have experience in cross-border e-Commerce.

Shanghai YTO Express (Logistics) Co Ltd, a major delivery service provider in China, which launched an international B737F charter service last week, linking Shanghai with Inchon, Qingdao and Hong Kong, in January hired Zhong Zhanrong, former Asia-Pacific trans-shipment director of UPS as the company's vice-president. In his new position, Zhong joined ex-UPS vice-president, Xiang Feng, who job-hopped to YTO as chief executive officer in 2013.

"As China's e-Commerce market is maturing, an expanding pool of buyers are taking to the Internet to buy products from abroad, which poses challenges to express enterprises," said Wang Xiaoxing, an e-Commerce analyst at Analysys International, a Beijing-based Internet consultancy. According to China Customs bureau, more than 2,000 companies have registered as cross-border e-Commerce enterprises since 2012.

Nol van Fenema

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