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Online business set to thrive

By Ding Yining | April 25, 2016, Monday | Online Edition

China's total mobile online retail transaction volume is expected to more than triple to 7.4 trillion yuan(US$308 billion) this year from around 2 trillion yuan last year, and it will make up a quarter of overall retail size, a latest study by research firm Mintel shows.

The "Pocket Power" white paper shows that China's total e-commerce transaction size is estimated to reach 9.7 trillion yuan by 2020, with business to consumer (B2C) making up 5.2 trillion and C2C market size standing at 4.5 trillion.

The number of active smartphone users in China would reach 700 million by 2018, up from around 520 million last year, it estimated.

China's overall online to offline (O2O) services' expenditure is expected to more than triple from 2015 to 2020 and reach 4.2 trillion yuan with a significant amount of capital from Internet giants and venture capital firms pouring into new service models and tech star-ups.

"People would come to rely on their mobile phones on everything with mobile retailing and services are expected to dominate more of the consumer economy," Mintel's report suggested.

"Mobile commerce has the potential of completely changing the relationship between consumers, brands and retailers," Matthew Crabbe, Mintel's director of research at Asia Pacific, wrote in the report.

Social media is also gaining momentum as a significant purchasing platform instead of just an advertising display channel.

"The majority of millennium consumers no longer trust standard advertising and are favoring friends and family members' recommendation through social networks, and we've also seen an increasing number of consumers are making purchases through social networks or chat apps, which is already a prevalent model in China," Willy Kruh, KPMG’s global chairman of consumer markets, told a recent interview with Shanghai Daily.

According to a recent survey with 400 global consumer industry executives by KPMG, almost half of respondents from China identified "mobile platforms and apps for shopping” as extremely or considerable important to their potential customers when they are choosing which brand or retailer purchase.

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