Two major challenges facing e-commerce companies
Singles Day, celebrated on Nov 11, has become not only China's answer to Cyber Monday in the United States but also the world's biggest shopping spree.
It was reported that Alibaba's customers spent a total of $9.3 billion on the company's two e-stores last Singles Day, up significantly from the full-day tally of $5.8 billion in 2013.
This year, in addition to all the lavish commercials, China's e-commerce giants have even decided to stage a spectacular TV show, a potential rival to the Spring Festival Gala.
Will this year's annual online sales day bonanza set a new record? It's almost a sure bet, the answer will be yes.
Statistics show that China's online retail soared to 2.59 trillion yuan ($409 billion) in the first three quarters of this year, up 36.2 percent over the same period last year. Since the top e-commerce giants have the lion's share of the country's e-retail, they will definitely benefit more than others from Chinese consumers' growing appetite for online shopping.
Yet, will they be able to turn the event into an engine for both their bottom lines and the country's long-term campaign to boost domestic consumption?
There are certainly good signs that China's e-giants can ride a steady and sustained growth of domestic consumption.
China's per capital GDP has reached about $8,000. If the world's second-largest economy continues to grow by no less than 6.5 percent annually in the coming five years, it is more than likely that consumption will play an even bigger role in driving economic growth than the 58.4 percent it contributed to China's GDP growth in the first three quarters of this year.
And the fact that Chinese e-commerce giants have managed to sell more goods and service during the online shopping days in a relatively smaller domestic market than their US counterparts did in the world's biggest consumer market might indicate they do have some extraordinary commercial savvy in tapping into the pockets of Chinese consumers.
But challenges abound on both the demand side and the supply side.
For Chinese consumers to spend more online and offline, the government must work hard to deliver on the promise of doubling per capital income between 2010 and 2020 while doing its most to alleviate their worries about the costs of healthcare, education and social welfare and so on.
Equally important, China's e-commerce giants should take seriously rising consumer complaints and spare no efforts in improving their service to customers.
Though online retail accounted for only one-tenth of the country's retail sales, most complaints made by Chinese consumers last year were about online shopping. It was reported that just 58.7 percent of products sold online were found to be authentic during a random inspection in 2014 by the State Administration of Industry and Commerce.
The online retail platforms may argue about the precision and correctness of such a random inspection but they cannot turn a deaf ear to the complaints of online shoppers.
Another problem is the delayed delivery of purchases after every peak in online sales. A recent government directive requiring parcel delivery companies to obtain the personal information of senders and check the contents of their packages will only increase the challenge of timely delivering goods. The new requirement will cost efficiency but enhance the safety of deliveries, which is a key link in online shopping, but how the e-retail giants deal with such changes without undermining the satisfaction of consumers will be a key test to their ability to adapt the changing consumption environment in this country.
In this sense, every Singles Day should be a fierce competition among the e-commerce giants of how to best serve customers.
This year, in addition to all the lavish commercials, China's e-commerce giants have even decided to stage a spectacular TV show, a potential rival to the Spring Festival Gala.
Will this year's annual online sales day bonanza set a new record? It's almost a sure bet, the answer will be yes.
Statistics show that China's online retail soared to 2.59 trillion yuan ($409 billion) in the first three quarters of this year, up 36.2 percent over the same period last year. Since the top e-commerce giants have the lion's share of the country's e-retail, they will definitely benefit more than others from Chinese consumers' growing appetite for online shopping.
Yet, will they be able to turn the event into an engine for both their bottom lines and the country's long-term campaign to boost domestic consumption?
There are certainly good signs that China's e-giants can ride a steady and sustained growth of domestic consumption.
China's per capital GDP has reached about $8,000. If the world's second-largest economy continues to grow by no less than 6.5 percent annually in the coming five years, it is more than likely that consumption will play an even bigger role in driving economic growth than the 58.4 percent it contributed to China's GDP growth in the first three quarters of this year.
And the fact that Chinese e-commerce giants have managed to sell more goods and service during the online shopping days in a relatively smaller domestic market than their US counterparts did in the world's biggest consumer market might indicate they do have some extraordinary commercial savvy in tapping into the pockets of Chinese consumers.
But challenges abound on both the demand side and the supply side.
For Chinese consumers to spend more online and offline, the government must work hard to deliver on the promise of doubling per capital income between 2010 and 2020 while doing its most to alleviate their worries about the costs of healthcare, education and social welfare and so on.
Equally important, China's e-commerce giants should take seriously rising consumer complaints and spare no efforts in improving their service to customers.
Though online retail accounted for only one-tenth of the country's retail sales, most complaints made by Chinese consumers last year were about online shopping. It was reported that just 58.7 percent of products sold online were found to be authentic during a random inspection in 2014 by the State Administration of Industry and Commerce.
The online retail platforms may argue about the precision and correctness of such a random inspection but they cannot turn a deaf ear to the complaints of online shoppers.
Another problem is the delayed delivery of purchases after every peak in online sales. A recent government directive requiring parcel delivery companies to obtain the personal information of senders and check the contents of their packages will only increase the challenge of timely delivering goods. The new requirement will cost efficiency but enhance the safety of deliveries, which is a key link in online shopping, but how the e-retail giants deal with such changes without undermining the satisfaction of consumers will be a key test to their ability to adapt the changing consumption environment in this country.
In this sense, every Singles Day should be a fierce competition among the e-commerce giants of how to best serve customers.
