February 19, 2014, 11:43 AM

China web merchants see the future and it’s mobile

China 500 merchants such as Dangdang and Yihaodian are preparing for a date in the near future when m-commerce could account for up to 50% of all web sales. China now has the world’s largest mobile base, with an estimated 1.1 billion subscribers.

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The mobile commerce market in China is currently about half the size of the U.S. m-commerce market, but many China 500 merchants already are preparing for the day when mobile could account for as much as 50% of all web sales.

Mobile commerce in China mushroomed to $15.7 billion in 2013, up by 101.3% from $7.8 billion in 2012 and 2925% from $400 million in 2010, iResearch says. As soon as 2015, China’s mobile commerce market could reach $41.40 billion, iResearch predicts. In comparison to China, m-commerce sales in the U.S. in 2013 grew about 64% to $34.2 billion from $20.9 billion in 2012, according to Internet Retailer’s Mobile 500.

M-commerce is growing in China for several reasons and in years ahead may even be the way the majority of Chinese consumers shop online, says Forrester Research e-commerce and China analyst Kelland Willis. China now has the world’s largest mobile base with about 1.1 billion subscribers, says Forrester. “The uptake of mobile commerce will push China’s e-commerce market to new heights,” Willis says.

Seeing that growth in m-commerce, many China 500 merchants are gearing up for a further uptick in traffic and sales from mobile shoppers. Dangdang, No. 10 in Internet Retailer’s newly published 2014 China 500, began selling books online in 1999 and now operates a web site offering a wide variety of merchandise. Nearly 40% of traffic to Dangdang.com comes from a mobile device and m-commerce accounted for about 10%, or $154 million, of total e-commerce sales of $1.54 billion in 2013, the company says. To accommodate mobile shoppers, Dangdang is busy updating its mobile site with such new features as faster search and updated log-in screens that enable registered users to more quickly access personal information such as a shopping history.

“We have collected a lot of customer demographic data and user behavior data, which helps us to provide more mobile upgrades such as personalized recommendations,” chief financial officer Jun Zou told Wall Street analysts on a recent earnings call. “We are helping our users to actually get used to mobile commerce ahead of some of other players in China.”

Today m-commerce only accounts for about 30%—$570 million—of 2013 web sales of about $1.92 billion at Yihaodian, No. 6 in the China 500. But Yihaodian, a web-only grocer with big ambitions to become one of China’s largest online mass merchants, expects that in just a few years m-commerce may account for as much as 50% of all web sales. To prepare for more growth in m-commerce and in the number of Chinese consumers using their smartphone and mobile Internet to shop online, Yihaodian is busy updating its mobile apps with better search features to access the company’s online inventory of about 3.4 million products. It’s also planning other yet-to-be-identified changes that founder and president Yu Gang says the merchant will introduce later this year. “Now is the time to go big because mobile commerce is already getting big in China,” Yu says. “We’re seizing the opportunity to build substantial market share.”

Yihaodian is one of the largest merchants ranked in the 320-page China 500, a newly published digital edition research guide and database from Internet Retailer. The China 500 ranks, by online sales, the 500 largest retailers in China, soon to be the world’s single largest national e-commerce market, according to industry estimates.

More on how to order the China 500 is available here.

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