Archive for ‘Consumer’

05/09/2014

Alibaba’s Taobao, Tmall Transform Shopping in China’s Small Cities – Businessweek

Li Yuxin remembers when she had to travel from Zhangjiekou, her northern Chinese home town, to visit her half-sister in Beijing so she could buy the right clothes. Sure, Zhangjiekou has large shopping malls full of cheap t-shirts and baggy jackets, but not stores where the aspiring fashionista could purchase accessories from such foreign luxury brands as Prada (1913:HK) or even popular Western sportswear made by Nike (NKE) and Adidas (ADS:GR).

Checking deliveries from online marketplaces Tmall and Taobao at an express delivery company in Beijing

But since she started ordering clothes from Taobao and Tmall—websites owned by Alibaba Group—her options and her wardrobe have dramatically expanded. “Maybe I spend too much money now, but I have to catch up with Li Zhu,” her half-sister who lives in China’s capital, she says.

E-commerce has quickly changed the face of shopping and consumer marketing in China. Mirroring the rise of Amazon (AMZN) in the U.S., the ascendance of Alibaba in China has greatly accelerated this trend and turned China into the world’s second-largest e-commerce market.

via Alibaba’s Taobao, Tmall Transform Shopping in China’s Small Cities – Businessweek.

25/07/2014

Consumers Drive Chinese Internet But Enterprise Use Lags – China Real Time Report – WSJ

By some measures, China’s Internet dwarfs that of the United States.

China has the world’s largest Internet population with 618 million users, well over twice as many as in the U.S. China also has the world’s largest online retailing industry, with e-commerce giants like Alibaba that sprawl far larger than the likes of eBay EBAY +1.08%.

But a new study by the McKinsey Global Institute argues that enterprise use of the Internet is still lagging in China and that the country’s businesses will need to catch up in this area to unlock economic gains.

“The Web is just beginning to penetrate many Chinese businesses – and the most sweeping changes are yet to come,” said the report, which was published this week.

MGI estimates that increased adoption of Web technologies like cloud computing and big data by China’s enterprises can add 0.3 to 1.0 percentage points to China’s GDP growth rate. By 2025, it could translate to annual economic gains of between 4 trillion yuan ($645.5 billion) and 14 trillion yuan, the research firm said.

China’s Internet has outpaced the U.S. among consumers. Alibaba’s online shopping platforms Taobao and Tmall have nearly twice as many active buyers than the U.S. site eBay. Jonathan Woetzel, one of the MGI study’s authors and a partner of the firm, told The Wall Street Journal that Chinese consumers spend more time shopping online and make more purchases than their American counterparts.

“China’s consumer generation has shown up at the same time as the Internet,” he said. “They have the money, but the offline shopping platforms like malls haven’t been built up fast enough to accommodate their expectations and needs. So more of them shop online.”

But when it comes to China’s businesses, they still lag in use of Web technologies, he says. The typical Chinese company spends 2% of revenue on IT, half of the international average, according to an MGI survey of CIOs. The enterprise cloud adoption rate in China is 21% compared to 55%-63% in the U.S.

Some sectors that stand the most to benefit in China include the financial services, health care and automotive industries, MGI says. Big data can help financial firms manage risks and reduce non-performing loans, while remote monitoring of chronic diseases can save costs for the health care industry.

via Consumers Drive Chinese Internet But Enterprise Use Lags – China Real Time Report – WSJ.

11/07/2014

Flipkart Fights to Keep India E-Commerce Lead Over Amazon – Businessweek

In 2007, when Indian software engineers Sachin Bansal and Binny Bansal were starting their online bookstore Flipkart.com out of a two-bedroom apartment, they faced a challenge Amazon.com (AMZN) founder Jeff Bezos never had: how to collect payment. At first the two, who aren’t related, accepted credit cards, but because few Indians use them, they needed a way to conduct e-commerce in cash. Payment-on-delivery was the obvious solution, but Flipkart didn’t want third-party couriers to carry large quantities of its money. So in 2010 the company decided to remake itself as a version of both Amazon and United Parcel Service (UPS).

A courier for Flipkart finishes loading his backpack as he prepares to deliver packages at a distribution hub in Bangalore

Becoming a delivery service brought a slew of infrastructure problems. India has no standardized street address system, and road conditions are rough. Often a building name, street, and series of landmarks are needed to locate a house. And customers have to be home to receive a package. “You cannot leave anything outside the door, because it will just disappear,” says Ashok Banerjee, Flipkart’s former vice president for logistics, now chief technology officer for e-business at Symantec (SYMC) in California.

The entrepreneurs looked at distribution as a technology problem. “The advantage we had was we were not a logistics company trying to do e-commerce,” says Mekin Maheshwari, head of human resources. “Because we were creating the systems completely in-house, we could actually solve it.” With venture funding from Tiger Global Management, Flipkart’s engineers developed systems to determine the best warehouse locations; it has six across the country. It alerts customers by text several hours before a scheduled delivery and has a lab dedicated to improving the final stage of deliveries, from local warehouses to buyers.

via Flipkart Fights to Keep India E-Commerce Lead Over Amazon – Businessweek.

08/07/2014

Car maker Tesla sued in China for trademark infringement | Reuters

U.S. electric car maker Tesla Motors Inc (TSLA.O) is being sued in China for trademark infringement, a surprise development that casts a shadow over CEO Elon Musk‘s ambition to expand rapidly in the world’s biggest auto market.

A Tesla Motors logo is shown at a Tesla Motors dealership at Corte Madera Village, an outdoor retail mall, in Corte Madera, California May 8, 2014. REUTERS/Robert Galbraith

Tesla said in January that the trademark dispute between it and Chinese businessman Zhan Baosheng – long seen by analysts as a barrier to Tesla’s entry into China – had been resolved. The car maker began delivering its Model S sedans to Chinese customers in April.

But Zhan, who registered the “Tesla” trademark before the U.S. company came to China, is now taking Tesla to court, demanding that it stop all sales and marketing activities in China, shut down showrooms and supercharging facilities and pay him 23.9 million yuan ($3.85 million) in compensation, his lawyer Zhu Dongxing said on Tuesday.

The Beijing Third Intermediate Court will hear the case on Aug. 5, according to a statement on the court’s website. Tesla China declined comment. Zhan declined to be interviewed.

The case underscores one of the thorniest problems faced by foreign firms in China. Global companies including Apple Inc (AAPL.O), Koninklijke Philips NV (PHG.AS) and Unilever NV (UNc.AS) have all been embroiled in trademark disputes in the country in the past.

Zhan, who claims ownership of the “Tesla” trademark, has long been a headache for the Palo Alto, California-based car maker and in part contributed to Tesla’s belated arrival in China.

Based in China’s southern province of Guangdong, Zhan registered the trademarks to the Tesla name in both English and Chinese in 2006. He had in the past sought to sell the label to the U.S. company but negotiations collapsed.

In January, Veronica Wu, head of Tesla’s China operations, told Reuters the company had resolved the trademark dispute that had prevented it from using “Te Si La”, the Chinese name best known among Chinese consumers, which Tesla wanted to use in China.

Zhan’s current lawsuit, however, brings new uncertainty to Tesla’s fate in China, which the firm had expected to become its biggest global market next year.

Apple Inc was embroiled in a similar case for years before reaching a $60 million deal last year for the rights to use the iPad trademark in China.

via Car maker Tesla sued in China for trademark infringement | Reuters.

08/07/2014

Chinese ‘customers’ at IKEA?

Do have alook at these actual photos: https://www.google.co.uk/search?q=chinese+asleep+IKEA,+2014&tbm=isch&tbo=u&source=univ&sa=X&ei=E-67U4HSDoHX7AadmYGQCg&ved=0CB8QsAQ&biw=1360&bih=850

Ikea Shenzhen China

Ikea Shenzhen China (Photo credit: dcmaster)

And from: http://www.scmp.com/news/china/article/1300942/ikea-last-cracks-china-market-success-has-meant-adapting-local-ways?page=all

“On a recent Saturday afternoon, Ikea‘s flagship mainland store – one of the world’s largest – is abuzz with people. Walkways guiding visitors from one showroom to the next feel more congested than the road outside, and almost all 660 seats in the canteen are occupied. Yet the lines to the cashiers are refreshingly short – most are not here to shop.

The store is gripped by a kind of anarchy that would rarely be seen, or tolerated, in its country of origin. There are picnickers everywhere – their tea flasks and plastic bags of snacks lining the showroom tables. Young lovers pose for “selfies” in mock-up apartments they do not live in. Toddlers in split pants play on model furniture with their naked parts coming in contact with all surfaces.

On a king-size bed in the middle of the largest showroom, a little boy wakes from a nap next to his (also sleeping) grandmother. When the old woman casually helps the boy urinate into an empty water bottle, dripping liquid liberally on the grey mattress under his feet, most passers-by seem not to mind or even notice. The exception is a young woman who elbows her disinterested boyfriend: “Look, he’s peeing into a bottle!”

Most endemic, however, is the sleeping. After a few, rare clear days, the city’s notorious heavy smog has returned, and is made worse by a sticky, dusty heat wave striking northern China. Weeks earlier, a photo of people napping in a Shanghai shopping centre to escape the searing heat went viral, but in the capital, it is Ikea’s cool, conditioned air that is salvation for tens of thousands of its inhabitants.

The bedroom and living room sections on the store’s third floor are the most popular. Virtually every surface is occupied by visitors appearing very much at home. Older people read newspapers or drink tea; younger visitors cuddle or play with their phones. Most, however, are sound asleep.”

 

17/06/2014

China’s Gray-Haired Set Could Boost Digital Shopping – China Real Time Report – WSJ

Online shopping in China isn’t just for the young, according to a new survey. That could be good news for an already quickly growing e-commerce industry that largely caters to the young.

While the bulk of online shoppers are still in their 20s and 30s, a survey published Tuesday by data provider Nielsen said the number of online consumers aged 55 or older grew 72% between 2012 and 2013. It cited data from Taobao, one of China’s largest shopping websites, which is owned by Alibaba Group, though it didn’t release the underlying figures.

“China could become the world’s most aged society by 2030,” said Tao Libao, a Nielsen official with responsibility for e-commerce, in a prepared statement. “The elderly online consumers deserve more attention from both current online retailers and brick-and-mortar retailers who are going to venture online.” People aged over 60 could be 30% of China’s population by 2030, Mr. Tao said.

They survey said they tend to be more careful shoppers, attracted by easy price comparisons and special discounts given that they often have less income than younger people.

“It’s cheaper to buy online,” said Zhang Jinnian, a Beijing shopper in her fifties who has been using the internet to shop for the past year. In that time she has bought clothes, shoes and a bicycle online. “It’s always more expensive in a store,” said Ms. Zhang, who declined to give her exact age.

via China’s Gray-Haired Set Could Boost Digital Shopping – China Real Time Report – WSJ.

14/06/2014

First there was fake Apple stores in China now fake Ikea shop found in Kunming | Mail Online

It seems that Kunming in the southwest corner of China is the world capital of knock-off shops.

Seem familiar? Employees push a shopping cart past the information desk at the lobby of the 11 Furniture Store

Apple recently found five counterfeit versions of its stores there after blogger BirdAbroad posted photos of one online – and now a fake Ikea has surfaced.

It’s called 11 Furniture and is a 10,000 square metre, four-storey replica that’s virtually identical to the Swedish-made version.

It copies Ikea’s blue-and-yellow colour scheme, mock-up rooms, miniature pencils, signage and even its rocking chair designs. Its cafeteria-style restaurant, complete with minimalist wooden tables, has a familiar look, although the menu features Chinese-style braised minced pork and eggs instead of Ikea’s Swedish meatballs and salmon.

This knock-off Ikea store is emblematic of a new wave of piracy sweeping through China. Increasingly sophisticated counterfeiters no longer just pump out fake luxury handbags, DVDs and sports shoes but replicate the look, feel and service of successful Western retail concepts — in essence, pirating the entire brand experience.

‘This is a new phenomenon,’ said Adam Xu, retail analyst with Booz&Co. ‘Typically there are a lot of fake products, now we see more fakes in the service aspect in terms of (faking) the retail formats.’

 

via First there was fake Apple stores in China now fake Ikea shop found in Kunming | Mail Online.

23/05/2014

Wal-Mart to open 110 stores in China as part of $100 million expansion bringing 19,000 jobs to world’s second-largest economy | Mail Online

Wal-Mart, the world’s largest retailer, has announced plans to accelerate its expansion into China by adding as many as 110 stores over the next three years, resulting in an almost $100 million investment.

Re-adjustment: Wal-Mart Stores Inc is changing its approach, closing some big-box stores that never quite caught on with locals

The Bentonville, Arkansas-based firm wants to open the new stores in the world’s second-largest economy at the same time as closing 30 under-performing outlets over the next 18 months.

China is key to Wal-Mart’s international ambitions but it has stumbled in a market where consumers value safe and authentic food over the low prices for which the retailer is known.

The U.S. retailer, which operates about 400 units in China, said last October that it would open up to 110 facilities in the country between 2014 and 2016 and was looking to close 15-30 others over the next 18 months as part of a rationalization process in the country.

Its local rival, Sun Art Retail Group Ltd, said in March it would continue to maintain steady new store expansion after China’s top hypermarket operator posted a 15.2 percent rise in 2013 net profit with an expanding store network helping it shrug off an economic slowdown.

‘China presents one of the biggest opportunities for us around the world to grow our stores and clubs, so its really important,’ Doug McMillon, president of Wal-Mart’s international business, said today in an interview with Bloomberg Television.

Wal-Mart already has 400 outlets across China and Wal-Mart is looking to develop a larger presence in the country’s largest center’s while building bigger stores in third- and fourth-tier cities.

via Wal-Mart to open 110 stores in China as part of $100 million expansion bringing 19,000 jobs to world’s second-largest economy | Mail Online.

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23/05/2014

The Secret Weapon Behind China’s Booming Online Retailers? Women – China Real Time Report – WSJ

The secret weapon for many of China’s booming e-commerce companies is women, who shop more, spend more and generate bigger profits. Though the income of Chinese women is generally lower than that of men, they are also more likely to spend on themselves.

As the WSJ’s Wei Gu reports:

A new crop of Chinese e-commerce companies has harnessed the power of female consumers. Shares of Vipshop Holdings Ltd., which specializes in branded apparel at big discounts, have soared 30-fold since the company went public in New York two years ago. Women are 75% of the customer base and provide 90% of the revenue.

The company said it chose apparel because it is more profitable than alternatives such as electronics, which appeal more to male buyers. VIPshop’s gross margin is a healthy 25%.

The companies are embracing a research-supported stereotype: Devoted shoppers are disproportionately female. A third of Chinese consumers shopped online more than 40 times in 2013, according to iResearch, a Chinese Internet tracking firm, and 59% of those frequent shoppers were women.

“The ones that are succeeding in China’s e-commerce space are the female-dominated ones,” said Shaun Rein, founder of China Market Research. “The optimism level for female is considerably higher, and they drive retail sales.”

A survey of 1,000 Chinese consumers by China Market Research found that 62% of the women between 25 to 45 plan to spend more in the next six months than in the previous six months, compared with only 52% of the men in that age range. Younger women, aged 24 to 35, are the most optimistic of all.

If they found themselves with extra money, Chinese women say they would spend on clothing and health products, while also setting some aside as savings, according to Nielsen. Women in developed markets would spend on a vacation and pay off debt, as well as saving some. As many as 86% of Chinese women believe their daughters will do well financially, versus less than 40% of women in developed countries.

via The Secret Weapon Behind China’s Booming Online Retailers? Women – China Real Time Report – WSJ.

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11/04/2014

All you need to know about business in China | McKinsey & Company

A lot of people view China business as mysterious. Relax. Consumers behave pretty much the same everywhere. Competition is pretty much the same everywhere. You just need to ignore the hype and focus on the basic fact that in China today, there are six big trends (exhibit). That’s it. Six trends shape most of the country’s industries and drive much of China’s impact on the Western world. They are like tectonic plates moving underneath the surface. If you can understand them, the chaotic flurry of activity on the surface becomes a lot more understandable—and even predictable.

Coauthors Jeffrey Towson and Jonathan Woetzel discuss China’s six megatrends with Nick Leung, the managing partner of McKinsey’s Greater China office.

These trends move businesses on a daily basis. They’re revenue or cost drivers that show up in income statements. Deals, newspaper headlines, political statements, and the rising and falling wealth of companies are mostly manifestations of these six trends, which aren’t typically studied by economists and political analysts. In fact, we happen to think that Chinese politics or political economics are wildly overemphasized by some Westerners in China. So let’s tell a story about each of these megatrends, with some important caveats. They’re not necessarily good things. They’re not necessarily sustainable. For every one of them, we can argue a bull and a bear case. Most lead to profits or at least revenue. Some may be stable. Some lead to bubbles that may or may not collapse. We are only arguing that they are big, they are driving economic activity on a very large scale, and understanding them is critical to understanding China and where it’s headed.

via All you need to know about business in China | McKinsey & Company.

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