With Chinese-based e-commerce giant Alibaba's recent IPO reaching new heights for a tech-based company, it seems as if the bar has been set high.
China largest global e-commerce market
According to Forrester Research, total e-commerce spending in China reached $307 billion in 2013. Due to recent growth and technological development, that figure is expected to mature at a compound annual rate of nearly 20 percent until 2019, exceeding the $1 trillion threshold. Both mobile and online commerce is statistically growing thanks in part to a wider availability of broadband across the entire country and into the more rural parts of China.
As of 2013, China has been the world's largest e-commerce market. Citing Forrester data, TechCrunch reported that Chinese e-commerce hit an estimated $440 billion in 2014, or nearly 10 percent of retail sales in China that year. Alibaba currently holds close to 60 percent market share; by comparison, it's top competitor, JD.com, has a 21 percent market share.
Moving toward Mobile
In terms of purely mobile commerce growth, China spent an estimated $50 million in 2014, which was close to double year-over-year growth, a recent Go-Globe infographic said. It seems that since broadband availability and mobile device popularity are both increasing, Chinese consumers are buying more from their phones – and will likely continue to do so in the near future.
"The top players have been trying to seize control of the m-commerce market by enhancing their mobile investments and improving their customer experience, giving the runners-up little chance of threatening Tmall's and Taobao's mobile dominance in the foreseeable future," Forrester analyst Vanessa Zeng said in the report.
As a result, logistics will likely play a key role in determining the future maturation of Chinese mobile and online commerce. Companies are now promising quicker delivery times to keep up with market demand and customer expectations. They need the appropriate back-end infrastructure in addition to an accessible payment processing platform. Major players in the Chinese e-commerce market are already working to improve their back-end logistics and delivery models.
Alibaba recently invested more than $16 million into a real-time logistics network in hopes of delivering packages to customers at any address in the country within a 24-hour time limit. Similarly, JD.com offers same-day delivery in 111 countries and recently opened its first automated warehouse in Shanghai, TechCrunch added. As China continues to promise to meet quicker delivery times, it will also need to build out its infrastructure to meet these demands.
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