IDC: Mobile E-commerce To Become the Focus of Competition in Chinese E-commerce Market 

Beijing, March 24, 2014 – According to IDC’s Top 10 Predictions for Chinese Internet industry, mobile e-commerce will become the focus of competition in Chinese e-commerce market in 2014, as the number of mobile Internet users and mobile e-commerce transactions increases rapidly.

The “Double Eleven” online shopping festival in 2013 not only reported record Internet retail sales, but also sounded the clarion call of China’s Mobile e-commerce: A quarter of the RMB 35 billion transactions were completed via mobile terminals such as mobile phones or tablet PCs, and users’ receptiveness to mobile e-commerce providers had significantly improved compared to the approximately 10% mobile terminal transactions at the beginning of the year.

IDC predicts that the scale of Chinese mobile e-commerce market will reach RMB 155.22 billion in 2014, up 67.9% compared to 2013 and far exceeding the 28% average growth of Internet retail market for the same period.

"The development of mobile e-commerce market will not be a simple migration from PCs to mobile terminals; it will be an individual-consumer-centric reconstruction of industrial models,” says Jialin Jiang, Senior Market Analyst, Vertical Industry Research and Consulting of IDC China.

Jiang points out that the question is whether e-commerce leaders of the PC Internet era like Taobao and Jingdong, or traditional retail giants like Intime and Wanda, who are eager to have a try at transformation with the help of O2O, or even brand vendors such as Haier, Lenovo and P&G, will all be important participants in the competition of this future market.

“The competition for individual consumers will gradually replace the competition for flow inlet, becoming the key for all participants in the industry to gain competitive advantages."

IDC estimates there will be three main development themes for mobile e-commerce in 2014: Promotion of mobile e-commerce client terminals, competition for social mobile-Internet portals and new business model exploration, and mobile terminal membership marketing and management by brand vendors.

Promotion of mobile e-commerce client terminals: Taobao, TMall and Jingdong and other e-commerce platforms will promote the use of mobile client terminals by increasing subsidies, so as to conform to the transfer of self-owned user groups to mobile client terminals. This trend had become very evident in 2013. For example, Taobao tried to encourage users to use mobile client terminals by giving away lottery tickets and coupons and through other incentive programs during “Double Twelve” period. IDC expects sales and marketing efforts in the Mobile e-commerce will continue in 2014.

Competition for social mobile-Internet portals and new business model exploration: The integration of “Weibo” with Alibaba e-commerce platform in 2013 did not result in significant sales conversions, and on the contrary accelerated user flight from platform “Weibo” to platform “Wechat”. Competition for socialized Mobile e-commerce portals between “Laiwang” and “Wechat” will become more intense in 2014, accompanied by business model exploration based on social and mobile relationships built by the two platforms. The large user base and usage frequency of Wechat will give Tencent a head start; however, without much breakthrough in socialized e-commerce business models, the battle between these two platforms perhaps will only evolve into a mobile IM (Instant Messenger) contention, and will not affect the landscape of e-commerce market much.

Mobile terminal membership marketing and management by brand vendors: Brand vendors in the era of Mobile e-commerce, will gradually learn not to “rise in revolution” by passively following the channels or platforms. This is because no matter how the channel type and model change, it is most important to focus on ones’ own products and services and strengthen the brand. Brand vendors will pay more attention to user information collection and in-depth analysis and take a more careful approach on membership marketing and management, in an effort to gradually reduce the increasingly high cost in channels and site traffic purchase, as well as achieving continuous upgrading and improvement in customer relationship management.

"In sum, the current oligopolistic market landscape of e-commerce market will be eventually changed as a result of rising competition in mobile e-commerce market.  A new revolution of China E-commerce market is coming," concludes Jiang.

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