Daily Digital Pulse Of China: Tencent, Ecommerce & Mobile Shopping
The Price Of Entry Into E-commerce Discussed
For those of you who ponder how much capital it would take for entry into the e-commerce platform here in China. Research reports have performed a case study that highlights some useful numbers. For clothing and apparel for example it would cost about 100,000 yuan ( USD 16,218) in security deposits and 60,000 yuan in service fees (USD 9,730) Commission charge is around 5% of sales revenue. China online shops need these security deposits in order to prevent e-shops from cheating out their consumers. This security deposit acts as a stockpile in case of fraud that occurs; they then use this money to compensate their consumers. Monthly service fees for B2C’s are also a must to be paid monthly. Commission from trading in the B2C platforms is also charged. To summarize add the sum of security deposits, service fees and commission. For a further example : “Jingdong’s security deposit is 10,000 yuan (USD 1,622), and service fee is 6000 yuan (USD 973), with a 8% commission rate. Dangdang is the same as Jingdong. Yihaodian costs even less, 5000 yuan(USD 810) security deposit and 3600 yuan(USD 584) service fee with a 6% commission rate. QQbuy costs 20,000 yuan (USD 3,244)for security deposit, 6000 yuan (USD 973) service fee. Commission is 5%. Amazon doesn’t charge security deposit and service fee, but charge a 10% commission.”
Source: China Internet Watch
The Rise of Mobile E-Commerce in China
With the number of smart phone owners in China on the rise, e-commerce companies have unprecedented access to their customers. Consumers can visit websites at any time – and they really do. Customers visit websites while waiting for their preferred mode of public transport, make purchases while on their morning commute, and share their purchases on various forms of social media, acting as indirect marketers for the products. In addition to this, many shoppers visit mobile sites while at physical malls in order to conduct price comparisons. Liu Qiangdong, the founder of Jingdong Mall, a Chinese e-commerce site, has emphasized again and again that mobile e-commerce will be everything in the future. Jack Ma, founder of the Alibaba group, has even said that “Taobao Mobile will outperform Taobao. According to data from iResearch, mobile e-commerce accounts for 42% of all of China’s mobile internet usage, coming out on top when compared to mobile value-added services and mobile games. Unlike the unprofitable mobile apps industry, PC makers and entrepreneurs are vying for a spot in the mobile e-commerce industry. Mobile e-commerce is a quickly developing subsector of e-commerce in China, with mobile e-commerce transaction volume making up 7.6% of total e-commerce in Q1 2013. When compared to just 0.7% the previous year, we can see that the mobile e-commerce market has grown quite a bit.
Source: CKGSB KNOWLEDGE
Smart TV’s Appear To Be The Next Trend In China
The trend now from the big players in China tech these days seem to be leading in the direction of Smart TV’s. This month we have seen Baidu and Xiaomi getting in on the action, even though there isn’t that big a market present yet. This fact however does not stop LeTV and Tencent from pursuit of this market. Rumors have been spread to the Chinese press that the two companies are working together to market their new Smart TV. One source stated that LeTV would be having a major press event towards the end of September, which leads us to ponder. Another rumor worth mentioning is the collaboration between Tencent investing in Xiaomi for the same reason of developing another smart TV for the market. However it is only likely that one of these collaborations will take place so which one are they partnering with? What one can expect is for Tencent to integrate a WeChat platform into one of these products, we however don’t know which choice of company Tencent will be working with. Further speculation is needed.
Source: Tech In Asia