China B2C Market Annual Report 2006

Abstract

Findings and Recommendations

Analysys' Findings

• Market Size
  • The market size of China' s B2C e-business reached 4.13 thousand million Yuan in 2005, with an increase of 32.6% over the previous year, showing a booming developing momentum.
  • It is estimated that the market size of China' s B2C e-business will expand rapidly in the next three years with a compound annual growth rate of 33.6% and reach 9.85 thousand million Yuan in 2008.
  • Internet retail remains the main form of B2C e-business and its market size was 2.31 thousand million Yuan in 2005. Industries of online order and internet direct selling will also enjoy a rapid growth.
• Commodities
  • At present B2C e-business mainly deal with shopping goods.
  • Category of commodity will diversify in the next few years and convenience goods will become key dealing products.
• Information Communication
  • Shopping agency will turn into a crucial information entrance of B2C e-business.
  • Comparison shopping will be an important form of shopping agency, change the value chain of B2C e-business and lead to price convergence.
  • The existing shopping agencies will develop into e-business brokers that joint purchase and sale, possess plenty of customer resource and integrate purchase advice and customer servicer, and will have great influence on e-business.
• Market Competition
  • Market competition will gradually transform from price competition to comprehensive competition focusing on service quality.
  • B2C and other forms of e-business will complement each other and integrate.

Analysys' Recommendations

Recommendations for B2C E-Business Vendors

• On Commodity:
  • Expand the product line and develop the brand and user resource while maintaining the competition edge of core product line.
  • Take convenience goods as one of the key products of near future.
• On Payment: Take measures to inspire users to pay online.
• On Delivery:
  • Provide order tracking service by short message, let the consumer know about the flow of purchase and take measures to address the problem of lack of information in purchase process.
  • Cooperate with traditional retail enterprises on flow of materials and make use of their stocks and channel resources.
• On Service:
  • Provide all-around and convenient service to return or change the goods in order to reduce customer' s worry about risk.
  • Provide diverse member service and benefits to enhance user stickiness.
• On Information:
  • Attach importance to shopping agencies, take initiative to cooperate with Web sites of comparison shopping, promote your products and services through cooperation and grasp the first opportunity in the market.
  • Improve interaction of service, transform from human-computer interaction to interpersonal interaction and build a community with e-business as its theme.
  • Encourage clients to evaluate the commodity and service and keep the negative evaluation.
  • Focus on users, turn from one who provides the commodity into one who meets the need. Intensify need-oriented mode for specified consumer group on basis of natural classification of commodities and provide fuzzy search.
  • Mobile business: Prepare in advance, enter mobile business market, target at young consumers under 25 with fashionable products..