China e-commerce targeting rural, foreign markets

As the world's biggest e-commerce market, China has attracted global attention for an online shopping spree that has revolutionized the nation's shopping habits.

In 2014, China's e-commerce transactions expanded 20 percent year on year to hit 12 trillion yuan (1.96 trillion U.S. dollars), while online retail sales grew 41 percent, ringing up transactions of 2.6 trillion yuan, data from the Ministry of Industry and Information Technology (MIIT) showed.

Hoping to tap the new territory to offset a saturated urban market, China's e-commerce giants have stepped up expansion of online retail business in rural areas and abroad while promoting targeted and tailored services to consumers.

GOING RURAL AND GLOBAL

Alibaba announced in October 2014 that it will invest 10 billion yuan over the next three to five years to build 1,000 "operating centers" in county seats and up to 100,000 "service outlets" in villages in order to expand its presence in the rural market.

JD.com Inc., a Nasdaq-listed e-commerce firm, has also announced plans to set up a county-level center in south China's Guangdong Province to facilitate farmers shopping online.

Suning Commerce Group, another major player in Chinese e-commerce, also plans to establish 10,000 depots covering 25 percent of Chinese rural areas in five years, according to its vice president Sun Weimin.

"The rural market will become a new engine to drive e-commerce growth and the competition to dominate the new territory has just started," said Sun.

Experts forecast the rural e-commerce market will top 460 billion yuan in sales by 2016, and that it will exceed consumption by urbanites in as few as 10 years.

Meanwhile, Chinese online shoppers' appetite for overseas goods is also growing. The Ministry of Commerce forecast cross-border trade by e-commerce companies in China will be worth 6.5 trillion yuan in 2016, with an average annual growth of over 30 percent.

To capitalize, Amazon China announced in August that it will begin cross-border online shopping with a facility in the Shanghai Free Trade Zone. Chinese buyers can go to Amazon websites in the United States and other countries to buy online and receive shipments from Shanghai in a week to 10 days with lower delivery costs.

Alibaba has also opened channels for buying goods online from overseas and is using its global payment system, Alipay, to bring in more players from abroad, including U.S. retailing giants Macy's, Bloomingdale's and luxury brands like Prada and Hugo Boss.

TARGETED AND TAILORED SERVICES

China's e-commerce giants are also using Big Data technologies to grasp consumer trends and exploit analysis of personal consumption habits.

Li Xi, vice president of JD.com, told Xinhua that adopting Big Data was allowing JD to customize its products to consumers based on their previous orders.

"Data mining has become an important driver for business innovation and decision-making," said Li.

In other words, Big Data is fulfilling sellers' dreams of knowing what their customers want, and is helping bosses make business decisions.

As Suning's Sun Weimin has put it, no matter how the online business mode, science and technology develop, the purpose of e-commerce will remain unchanged: "to always serve the customers."

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