China’s steady growth during the recession provided opportunity
The Chinese economy did not stop its bold step of growth during the global recession. During 2008 and 2009, the first two years of the global financial downturn, China saw GDP growth of 9.6% and 9.2% respectively, as is shown by a related market report in China. China did not slow down in 2010 and 2011 and GDP continued to rise. As a result, the disposable income levels of the Chinese consumers skyrocketed. An increase in consumer expenditure on clothing and footwear accompanied this vigorous economic growth, with 71% growth in Chinese consumers’ annual per capita spending on apparel since 2006, reaching 1,154 CNY in 2011.
Internet retailing and its boom in China
In 2010, internet retailing in China achieved current value growth of 296%. In 2011, the growth number is 100%, with sales reaching 159.7 billion CNY.
Young adults – market segment with the greatest potential
In 2011, apparel internet retailing industry registered the strongest current value growth of all categories – 168%, accounting for 2% of the total apparel retail value sales – a figure that was just 0.1% back in 2007, according to a recent market research study in China.
Chinese consumers born in the 1980s and 1990s are the most frequent online shoppers and online shopping has increasingly become a part of their lives and habit. Moreover, this trend is expected to continue. What attracts the younger consumers are the diverse choices, lower prices and convenient payment. Due to these factors, internet retailing is expected to account for a growing share of the apparel market every year.
Local providers – main force online in china
Currently, Chinese retailers dominate online apparel retailing in China, largely due to a first-mover advantage and better insight on the preferences of the local consumers.
Tianmao, the official online B2C shopping platform of taobao, the largest online shop, achieved total sales of 936 million CNY in a single day when its online stores offered up to 50% discounts.
More companies going online in China
After seeing great potential and result from other internet retailers, traditional stores also wanted a share. A typical example is Belle International Holdings, a leading local brand in China that entered internet retailing in 2010 and showed great ambition to increase its share online.
Daxue China consulting (Mystery Shopping in China)
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