The e-commerce industry is rapidly evolving and transforming the retail sector faster than ever before.
Although the customers might differ in their buying decisions, e-commerce is becoming an important player in all markets around the world.
China saw the opportunity New Zealand can provide to their e-commerce industry – many of the country’s largest e-retailers were present at the Tripartite Economic Summit in Auckland, seeking out products that would be in high demand.
“E-commerce is a very simple topic.” -Rob Freelen
“E-commerce is a very simple topic,” said Rob Freelen, Los Angeles Market Manager of Silicon Valley Bank at the Tripartite Economic Summit. “It boils down to connecting a product with the customer, including how you market and sell to the customer, and how you transact with the customer.”
While the customers might differ somewhat between Los Angeles, Auckland, and Guangzhou, the e-commerce industry is rapidly evolving and transforming the retail sector faster than ever before.
Freelen noted that the United States is seeing a large number of e-commerce companies operate in very specific niche sectors.
Thrive Market sells ‘the best healthy, natural, non-GMO, organic, vegan, raw, Paleo, gluten-free, and non-toxic items from the top-selling brands at wholesale prices’ – effectively a hybrid between Whole Foods and Amazon. They deliver specifically to those demographics that don’t have an easily accessible Whole Foods, and it’s a market that is growing very quickly.
Club W is a wine discovery platform targeted to 21-31 year olds. It has been designed to introduce younger consumers to new tastes they might like. The Dollar Shave Club sells very cheap disposable razors. Both of these business spurred a multimillion dollar business based on a couple of YouTube videos that went viral.
The US economy often leads the world in industries like e-commerce. Freelen has seen the industry rapidly shift from an information economy to an experience economy. “These companies are expected to not only go internationally, but to go after customers in a unique, innovative way, that will drive much faster sales increases,” he said.
Recognition of the transformation to an experience economy was even echoed at the Tripartite Summit in a panel discussion on virtual and augmented reality. “The importance is not discounting; it’s about upselling experience,” said Dr Roy Davies, Founder of Imersia.
“The importance is not discounting; it’s about upselling experience.” -Dr Roy Davies
The Guangdong Cross-border E-Commerce Industry Association (GCEIA), an industry body that was formed by many of the leading Chinese e-commerce industry players reiterated China’s e-commerce interest in New Zealand.
GCEIA actively promotes New Zealand as a region and a source of products among its membership. When asked what they aimed to get from their attendance at the summit, GCEIA said “the Summit is a great opportunity to explore potential local suppliers. Many of our association members are interested in the opportunity for New Zealand products in China. We are here to seek out those goods that will be in high demand through our platforms.”
China’s E-mall platform provided by ICBC now has 680 million subscribers, which at more than the population of the European Union, ranks it as the largest e-commerce platform in the world. The internet industry has contributed to seven per cent of China’s total GDP, and this is expected to continue to grow.
China has seen such rapid development of the e-commerce industry because it corresponds to the growth of the middle class. China is being further and further urbanised, customers demand for better quality products is growing, and disposable income continues to increase. By working with top quality businesses, ICBC have established a solid brand in the marketplace, and are achieving a very good word of mouth reputation among customers and businesses.
ICBC’s New Zealand E-mall was launched in November 2015, and allows ICBC’s small and medium sized businesses to sell directly into the Chinese market through a secure sales channel. In the three months since the New Zealand E-mall went live, ICBC facilitated 4000 transactions on the platform. Leveraging the increasing demand from Chinese consumers for high quality, safe products, the majority of items on the New Zealand E-mall are personal health care and cosmetic products, and New Zealand made snacks.
“The next step for ICBC will be to expand their product lines into new products, including tourism and studying in New Zealand.” -Xiaoyan Chen
“The next step for ICBC will be to expand their product lines into new products, including tourism and studying in New Zealand,” said Xiaoyan Chen, ICBC Director. “We plan to provide information and solutions for people looking to visit and study in New Zealand. ICBC wants to become a strong bond. One that can link trade between our countries together, and provide a one stop cross-border solution.”
Vipshop, a Chinese ecommerce giant, is another Chinese company capitalising on the ecommerce shift. Working with around 18,000 brands, many of them at the premium end of the market, the company now has 180m registered members, including 13 million daily active users, with an 80% repeat purchase rate.
“You can really see how ecommerce is shaping the whole China retail market.” -Hillary Wang
To put the shift into ecommerce into perspective, 46% of all pairs of shoes sold in the Chinese market in 2015 were sold online. “You can really see how ecommerce is shaping the whole China retail market,” says Hillary Wang, Senior International Director at Vipshop.
E-commerce platforms like Vipshop are able to provide the suppliers whose products they feature with access to an increasingly large pool of data about buyers. For example, Vipshop can provide suppliers with information about where merchandise has been delivered to and who has been buying. New Zealand companies can then use this information to make strategic decisions when entering the Chinese market in a physical, offline sense.
These innovations open New Zealand retailers up to a potentially enormous customer demand, especially now that China has overtaken the US to become the world’s largest e-commerce market, and this is only anticipated to continue, with China’s strong domestic consumption and rapid urbanisation.
https://www.timmccready.nz/wp-content/uploads/2017/07/shutterstock_266460659-660x3301.jpg330660tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2017/10/TimMcCreadylogo.pngtim.mccready2016-05-17 11:39:552017-10-22 19:32:08Tripartite Summit: E-commerce - a world of opportunity