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Ecommerce battle hits China

by: isev

on: 2nd March, 2011

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China’s quickly growing e-commerce sector has led companies such as Suning, Gome and Wal-Mart to increase their online presence in the country.

Suning, the home appliance giant, will be simultaneously enlarging its already substantial offline network whilst also increasing its online visibility.

‘While we add stores, we’re still paying attention to our online business,’ Sun Weimin, Suning’s vice chairman, told the China Daily.

‘Traditional [retail] and ecommerce have different customers, and we believe the two can develop cooperatively.’

Increasing its offline profile, Suning is building 27 storage centres, ten of which are already under construction.

Gome, a rival to Suning, purchased 80% of Coo8.com in 2010, as it tried to compete in the burgeoning ecommerce category.

‘E-commerce will play a very important role in Gome over the next five years, and we have a determined resolution regarding this,’ said Wang Junzhou, Gome’s president.

‘It’s the company’s first shot to tap the e-commerce market.’

Wal-Mart is also getting in on the action, taking a share in internet-based electronics retailer 360Buy, and recently unveiling an e-commerce platform linked to Sam’s Club outlets in Beijing, Shanghai and Shenzhen.

Doug McMillon, chief executive of Wal-Mart International, said:

‘We believe our 8,000 points of distribution give us an opportunity to leverage that network, more than a purely online retailer can do,’ he said.

Tabobao Mall, a virtual store has recently partnered with big brands such as Levi, Gap Uniqlo and Adidas. Lured by the possibilities promised by over 450m ‘netizens’.

‘We felt that working with Taobao Mall offered the best approach to reaching out to more consumers because it is so clearly the most influential online business-to-consumer sales channel,’ said Christophe Bezu, chief e-commerce officer for Adidas, last year.

‘It allows us to reach millions of consumers in a very direct way, many of whom we would have difficulty reaching through brick-and-mortar storefronts.’

According to iResearch, the total number of orders made via the web in China hit 564.7m by the close of 2010, measured against 371.5m just one year earlier.

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