Online Retailers conquer China

Wednesday, 29 December 2010
It might be censorship, but the online culture is taking off in China and rapidly catching up with Western economies. As a matter of fact, the digital vehicle is the preferred one for all of those Chinese shoppers willing to show off their acquisitive power.

Online retail represents the next major area for retail growth in Asia, according to a new study by the Economist Intelligence Unit and PriceWaterHouseCoopers China that was released to the press on December 13. As published by the China Daily, online retail sales in China, which has the world's largest web population of at least 420 million, soared 117 percent last year to $39 billion, according to iResearch, a Shanghai-based research firm. That's the reason why so many retailers use Internet platforms to grow in the emerging market.

In China, online shopping is skyrocketing. About one-third of China's 420 million Internet users now shop online. In the first half of 2010, Internet sales in China increased by 60 percent compared to the same period last year. According to the China Internet Network Information Center, in July 2010, 33.8 percent of Chinese made purchases via the Internet, up from 28.1 percent in January. China's largest online marketplace, Taobao, handled 97 percent more transactions in the first half of 2010 than a year earlier. However, the online sector is still largely underdeveloped in China, particularly when it comes to transaction security and credit-card use. Zhao Ping, a professor at Beijing Institute of Fashion Technology, said online sales were the trend for the clothing industry and developing a buying habit was very important. "Online clothing sales are promising, accounting for almost 60 percent of all apparel sales in China," said Zhao. "Gap can take advantage of this channel to promote its brand."


According to Glenn Murphy, chief executive officer of Gap, having an online store is vital in the e-commerce era. The American casual fashion brand has now introduced its online strategy to the world's fastest-growing economy, with a Chinese-version website and online store, gap.cn, launched in China last month. So far, Gap China's online store has received orders from places as far apart as Harbin in Northeast China, Kunming in Southwest China, Xinjiang in Northwest China and Guangdong in South China. Murphy added that the global specialty apparel retail industry was highly competitive and its first month of booming business will not guarantee its future popularity in China. But he said the company was determined to enter China. "It's a huge market, and we are sure to expand new stores in Hong Kong next year," Murphy said. "An online store will be opened in advance for promotional purposes." In a similar movement, Italian fashion designer Giorgio Armani launched an online store in China in November and told Agence France-Presse that it was "the first fashion brand to offer a 'flagship store' online experience in China".

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