Chinese consumers are the most enthusiastic online shoppers in the world.
Last year, consumers in China are estimated to have bought US$1.94 trillion worth of products and services online, according to eMarketer, a research firm. That’s more than three times the online sales done in the U.S.
This has helped create some of the world’s biggest e-commerce companies like Alibaba and Pinduoduo, which are pioneering innovative ways to engage consumers. The success of these concepts has attracted the attention of global companies keen to replicate them in their home markets.
This year, livestreaming, group buying and the data-based consumer-to-manufacturer (C2M) model are among the most prominent trends that will shape China’s e-commerce market, according to New York-based Coresight Research.
“In 2020, we expect China’s e-commerce market to be full of innovation, strong expansion into recommerce and faster delivery,” the research firm said in its report dated Jan. 20.
Livestreaming sessions are real-time webcasts by presenters who model or try out products. Viewers are able to purchase the featured items through embedded online links in the stream.
Last month, when large wholesale produce markets were shut down due to the COVID-19 outbreak, farmers from Yunnan province were able to sell five tons of onions in two hours after some 300,000 users watched their livestream and placed orders.
Livestreaming will play a bigger role in ecommerce in 2020 as it enables brands and retailers to market their products to consumers in real time and offers consumers the advantage of limited-time discounts, according to Coresight Research.
Know your influencer
Another top trend is the rise of the key opinion consumer (KOC).
Not to be confused with key opinion leaders (KOLs), KOCs are your average consumers who share their own product reviews and recommendations. They are increasingly seen as more credible than KOLs because they are not paid by brands to endorse the products.
Let’s all buy
Ecommerce platforms will increasingly embrace group buying in 2020, according to Coresight Research.
The group buying model offers products and services at significantly reduced prices if consumers buy together, in so doing generating large volumes.
This works well for brands that want to expand into China’s so-called lower-tier cities as it offers relatively low prices, which can help them reach a wider user base.
No more middlemen?
China’s consumer-to-manufacturer (C2M) model will become a new driver in e-commerce.
In the C2M model, retailers and manufacturers collect and analyse data from customers to come up with products that are tailored to their needs.
Corou, a manufacturer based in central China, cut the size of its tissue paper and moved its production line closer to a port after data analysis from Pinduoduo. The company was able to raise sales and cut logistics costs as a result.
The C2M market in China reached US$2.5 billion in 2018 and is expected to hit US$6 billion in 2022, according to iResearch.