China Gives the US a Run for It's eCommerce Position | ad-ition digital strategies that work
China Gives the US a Run for It’s eCommerce Position
December 13th, 2011, In Advertising, Social Media, by Beverly Crandon
Currency through eCommerce, we all know, is expected to rise over the next phase of our forecasted digital futures, and mostly, the US has taken the lead when discussing eCommerce trends. comScore, for example, has released countless reports on the viability of this area of our market. Their most recent account shows that eCommerce sales are up a whopping 15 per cent, when compared to just a year ago and if trends continue as
they are, we could very easily see the 2012 holiday season, eCommerce dollars, approach the 28 billion dollar mark. However, given that Internet penetration is, as of October 2011, 79.8% in the US, the potential for new growth is minimal. The ideal markets, in my mind, are the ones with strong economies, decent Internet penetration, but one that shows room for sizeable growth trends. To put it simply, getting in on an emerging eCommerce economy, where your financial benefits will yield sizeable returns, for a longer period of time.
Based on highly published Web stats, the ideal emerging market or emerging market template is China. China has a population of 1.3 billion people, of which 485 million are online, giving us a penetration rate of 36 per cent. A far lower Internet penetration number, when compared to the US. So, not only do the afore mentioned statistics shape it to be prime for an eCommerce waive, but it is how the culture has played in to world of eCommerce in China that also leads to higher forecast expectations now, and moving forward.
In past, China’s residents have been somewhat skiddish about online shopping. It was too impersonal. The act of giving a faceless entity your credit card information in hopes that they will make good on their promises of a product, in return for your money, was too hard to fathom. To combat this, top online listing, auction and classified sites in the country have worked tirelessly in trying to build their own eWallet solutions, which has worked out well. These online giants were home grown, and known to the residents of China, so a natural sentiment of trust was casted, now making for a smooth transition to electronic purchases. One such online listing giant, is Baidu, and if you are familiar with recent Baidu news, you will know that they formed a partnership with Facebook, earlier this year. Which was a likely partnership, considering that Facebook has 505k Chinese subcribers. It’s not a number that would, upon first glance, scare a partner such as Baidu, but the growth trends in this area have been astronomical. So, as we speak about eCommerce and its future potential in China, the Facebook partnership is making a heck of a lot of sense for Zuckerberg.
When it comes to eCommerce, it has been said that more and more online stores are integrating Facebook’s social features, to the point that today 88% of Internet Top 200 retail sites are integrated with Facebook. This creates a viability to use Facebook as an eCommerce platform, in partnership with Baidu. Promoting in profile purchases, through recommendations or through a posting of a company you have chosen to like, would be a nice addition to the Baidu offering. Facebook would have to forget the virtual currency concept – we don’t see this working well in China.
With the Chinese population themselves referencing the lack of stock in brick and mortar retail outlets, as their
main reason for turning to eCommerce solutions, it is clear that the growth potential is limitless. We had forecasted that the Baidu/Facebook relationship would result in an early 750 million dollar uplift for the social network site, but, should they get the eCommerce strategy right and remain respectful of culture and the nature of business in China, our forecast could be too remedial. At any rate, our eyes are on China. Could we even see a makeup between China and Google, given the potential? Who knows, but opportunity does make everything possible.
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