Daily Digital Pulse of China
How do China’s Low-Frequency Shoppers Behave?
China’s low-frequency shoppers are the main contributors to sales revenue for small brands – that’s the verdict of Bain & Company’s “China Shoppers Report 2013”. What might be the reasons for this? Firstly, the bulk of online shopping in China takes place away from the media spotlight – not on Single’s Day, not in exclusive districts of first-tier cities, but by middle-income consumers in China’s first, second and third-tier cities, as well as those living in towns in close proximity to metropolitan areas. The explosion of e-commerce in recent years has been built not on one-off luxury purchases, but by high-frequency shoppers buying daily essentials, such as groceries. However, for brands whose market share is relatively small, low-frequency shoppers, that is to say consumers who make a purchase less than five times per year, are the mother lode. A consumer who purchases a particular brand less frequently tends to spend more per purchase, providing the brand with greater sales revenue. This paints a promising picture for newcomers – despite the fact that a newcomer to say, luxury watches, would have many competitors, the sales revenue generated by low-frequency, high-income shoppers would compensate for the lack of market share.
Source: China Internet Watch
Tmall Aims for ¥18bn on Singles' Day
Singles' Day is just under 3 months away (11.11), and Tmall is already preparing for battle. From now until next Friday (22.8), the company is recruiting online vendors to enter the B2C fray in November. Building on last year’s success, Tmall has announced that it will organise offline events to widen participation in the run up to Singles' Day. Becoming a Tmall vendor for the biggest day of the year in online retail is a hot ticket - the company plans to woo potential vendors with an exclusive rewards package, details of which have yet to be revealed. E-commerce gurus expect Tmall to exceed its target of ¥18bn in sales revenue this year – a prediction based on site’s performance in 2012, as well as that of its sister company in Alibaba Group, Taobao.
Online Food Sales in China
The Chinese have acquired a taste for online grocery shopping. Why is this? Coupled with rising consumer expectations, the largest contributing factor is the recent flurry of food contamination scares. The promise of safe, uncontaminated groceries from online retailers is an ever-more attractive option for China’s growing middle class. But what does the online food market actually look like? Up until now, Yihaodan and Jingdong Mall have faced little or no competition when it comes to online groceries. However, a series of prominent food safety scandals, most recently Fonterra baby milk, has spurred new players, both large and small, into action. Taobao’s 10 million users per minute are increasingly adding food and drink to their shopping baskets, with fruit and vegetable sales of ¥1.3bn in 2012. Taobao’s entry into the market has been accompanied by a wave of SMEs offering similar services. For instance, Benlai Shenghuo, set-up in 2012 and whose name translates as “orginal life”, is a food specialist, a purveryor of chicken meat. The offline-online shift in food shopping is part of the wider e-commerce boom in China, combined with rising expectations – middle-income consumers consider it no longer acceptable to have to ask “Is this meat safe to eat?” “Is this milk contaminated?” “Are these vegetables fresh?”