China is set to overtake the U.S. in e-commerce to be the world's largest e-commerce market this year, led by shoppers from the rising middle class.
Consultancy firm Bain & Co. forecasted in a report released Wednesday the country has grown an average rate of 71 percent from 2009 to 2012, compared to 13 percent in America, Reuters reported.
China's e-commerce revenue is also expected to hit 3.3 trillion yuan (US$539 billion) by 2015, the consultancy firm noted. The country’s spending on online shopping hit US$212.4 billion in 2012 and in comparison, the U.S. hit US$228.7 billion.
"While beating the U.S. in a major milestone for e-commerce in China, there is no longer a meaningful distinction between China Daily report., Web and mobile strategies," Serge Hoffmann, a partner in Bain's retail practice in China, and co-author of the report, noted in a separate
It was found that 71 percent of Chinese shoppers research products and compare prices online and offline, and across different online stores, with half of them citing price as the top reason for shopping.
Two-thirds of buyers also, a proportion higher than that of the U.S.
For upper-income consumers with a monthly household income of 50,000 yuan (US$8169.55), the figure for shoppers who research and compared products and prices online was 75 percent.
The rising middle class has high expectations of consumer products and a need for product verification, Robert Theleen, chair of the American Chamber of Commerce in Shanghai, said in the report.
"With the rise of e-commerce and social media, online marketing channels and Internet forums offer a platform for consumers to gather the intelligence they need to make informed purchasing decisions," Theleen noted.
Bain & Co's latest report echoes a separate research paper by Boston Consulting Group (BCG) in 2011, which stated China already had more Internet users than the U.S. and Japan combined and had 145 million online shoppers, and further exponential growth will.
B2C can leverage C2C success, have physical store presence
The potential is huge for business-to-consumer (B2C) sites to woo shoppers from, Hoffman said.
The compound annual growth rate (CAGR) for B2C platforms was 160 percent from 2009 through 2012, and is set to continue growing 53 percent annually through 2015. In comparison, Taobao.com, China's leading C2C platform grew by a CAGR of 65 percent throughout the period.
Given a choice, 82.9 percent of shoppers also prefer an online store with a brick-and-mortar presence compared to pure play sites such as Jingdong Mall, which only has online stores. This indicates a strong growth opportunity for "omni-channel merchants", Hoffmann said.
It was also found Web sites successfully fed store sales. More than 60 percent of shoppers said a retailer's online store will increase their spending at the same retailer's brick-and-mortar stores.
Building a dedicated digital team and investing in a world-class Web site are critical to grab a foothold in the e-commerce market, Hoffmann noted, citing Japanese apparel brand Uniqlo, who had outsourced development of its Web sites for its online store, as an example of streamlining entry into China's digital retail market.