Will China become the world's largest online store?

e-commerce Global Trade

by Charles Brewer

October 7, 2016

A child’s birthday party I attended recently left me pleasantly surprised.

Not because of the stylish and extravagant presentation of party decorations. But because I found out that they were all ordered online. The parents seemed extremely pleased both at the choice and the convenience – all at a fraction of what it would cost at their local brick-and-mortar store.

It got me thinking: How has e-commerce changed the way we live today and will live tomorrow?

Consumer expectations are evolving. Tech-savvy individuals are constantly in search of value for money; they are resourceful and they trust third-party reviews more than a brand’s advertising. Therefore, e-commerce players must rethink their business models – from one that simply offers solutions to one that provides customers with a value-added experience – in order to win the hearts of these discerning consumers.

Online retailers need to meet the specific logistics needs of the e-commerce industry. This is especially so as e-commerce shipments change from low-volume bulk orders to high-volume small orders.

China is one country that has recognized this. As a manufacturing hub, the country has a 25% share of the global manufacturing output and is continuing to shift its focus from B2B to B2C. Experts predict that by 2020, China will become the world’s largest market for e-commerce activities. The total value of commodities sold by online retailers to overseas consumers is expected to reach $994 billion.

Here are some trends that I have observed over the last few years:

1. Which countries are purchasing from China?

China has always been known as a manufacturing powerhouse. It produces a wide variety of products ranging from textiles to electronics and consumer entertainment goods. In fact, China produces about 80% of the world’s air conditioners, 70% of its mobile phones, 60% of its shoes, and almost half of the world’s goods.

Made-in-China products are popular among consumers from the United Kingdom, United States, and Germany. This can be attributed to the improved quality of the goods produced, the competitive pricing, and ease of access to the Chinese market today. Some of the top products consumers from these countries purchase include electronic gadgets, clothing and footwear.

2. Logistics needs to be tailored for the e-commerce industry

Today, we can practically buy anything and everything online – from food and phone covers to household electronics, furniture, and luxury goods. The e-commerce industry is seeing an evolutionary change as more and more people embrace the convenience of online shopping. The types and frequency of purchases have also evolved tremendously.

Online retailers need to meet the specific logistics needs of the e-commerce industry. This is especially so as e-commerce shipments change from low-volume bulk orders to high-volume small orders. They need lower cost, more convenience, and more choice in order to thrive.

3. Consumer expectations

The one-size-fit-all idea no longer works as consumers today demand a highly personalized shopping experience. They seek services that give them control. This includes those that empower them to choose the platform on which they want to shop, how and when their purchases will reach them, and where to collect their purchases based on their timelines, not the shipper’s! Besides prompt customer service, customers also want real-time visibility of their online shopping.

As the world’s leading logistics group, we are well placed and highly determined to close the gap between the needs of the e-commerce merchants and the expectations of consumers. We will do this by tailoring logistics solutions specific to various market needs.

One such example is our Parcel International Direct solution. In the case of China, this allows Chinese e-tailers to reach major e-commerce markets with a solution that combines tracking and cost-effectiveness for shipments within four to six business days and an ever increasing choice of how to deliver across the ‘last mile’.

The rapid path of retailing to e-tailing is massively reshaping China’s retail industry. Consumers are shifting from brick-and-mortar to online shopping. As such, the import and export opportunities for China are huge.

E-commerce and cross-border ordering is only going to get bigger and bigger, so online retailers must continue to partner with a logistics company that can add value to the consumer experience and truly ‘put the smile in the last mile’.

With e-commerce, the world is indeed getting smaller. And China is well on its way to becoming the place where the world shops. Who knows, maybe the decorations for my child’s next birthday will be purchased there, too.