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| The customer service department of an e-commerce firm in Guangzhou. (File photo/Xinhua) |
Online
retailers in China racked up massive sales in 2012, seriously threatening the
operations of many bricks-and-mortar stores.
On Nov. 11,
celebrated as the unofficial holiday as Singles Day by hundreds of millions of
young people in China, two of the country's leading e-commerce businesses,
Taobao and Tmall—both owned by Alibaba Group—collectively recorded 19 billion
yuan (US$3 billion) in sales, equivalent to 30% of total national retail sales
on the day. "The 30% share is absolutely a miracle," remarked Zhang
Yong, CEO of Tmall.
Online
shopping, as pioneered by Taobao, has enjoyed rapid growth in recent years. In
2011, Taobao accounted for 3.44% of China's total retail sales, up from 2.55%
in 2010, 1.57% in 2009, and 0.87% in 2008.
Liu Jie, a
professor at Fudan University's School of Management, told Guangzhou's 21st
Century Business Herald, "The skyrocketing growth of online shopping has
greatly impacted the traditional retail industry. Traditional enterprises
should open their mind and learn from Google and Apple, selling not only
products but also services to cope with the change."
As of Nov.
30, total transactions for the year at Taobao and Tmall topped 1 trillion yuan
(US$160 billion). Zeng Ming, chief strategic officer at Alibaba, attributes
this phenomenal development to fundamental changes in society.
Zeng Ming
says that with hitting the 1 trillion yuan milestone, Alibaba will switch its
development focus from single business mode and market expansion to the
construction of e-commerce ecosystem, as Amazon, Google and Apple, among
others, have done.
As the
growth in online shopping has been impossible to ignore, many traditional
retailers have ventured online. Yet a number of difficulties are commonly
encountered. "You have to embrace the spirit of the internet in combining
new and old retail businesses, utilizing the web to integrate the offline
experience rather than mechanically moving the offline mode to the online
business," comments Zeng.
For
traditional retailers, the biggest initial challenge to moving some business
online is getting the logistics right. "In the future, businesses will
match buying and selling of stock according to the customer needs, rather than
stockpile goods beforehand," remarks Li Shujun, president of GXG, an
apparel firm which has moved into online shopping.
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