very single day of every week, an estimated 150,000 new Chinese shoppers join the ranks of the hundreds of millions in the country who have discovered the world of e-commerce. Online retail penetration in China reached 11% in 2014 and surpassed RMB 2.9 trillion in total value. Penetration is expected to double by 2020, according to our estimates, with the total value skyrocketing to RMB 10 trillion. But this dramatic adoption of online shopping is not the biggest news to emerge from Bain & Company’s latest research on China’s e-commerce market. The exciting ﬁnding is the way that e-commerce is now shaping consumer behavior and the profound inﬂuence those shoppers are having on online sellers. Despite the massive and steady growth in penetration and value, China e-commerce is rapidly evolving to become more than a numbers game for both consumers and sellers.
In the earliest days of e-commerce, the major reason consumers went online was for lower prices on generic goods than they could ﬁnd in physical stores. Now, in record numbers, they’re swiftly growing in taste and sophistication, turning to online commerce for quality products and brand names and looking for a satisfying shopping experience. In response, sellers have made a similar shift from the quantitative to the qualitative. Sure, it’s still important for them to grow the number of shoppers, but it’s no longer an aggressive and single-minded land grab. Now it’s critical for them to develop the best brand strategies and investments to serve an increasingly savvy market, seeking valuable customer insights that can help them hone their branded offerings and improve everything from marketing to supply chains.
To help us understand how brands are adapting and transforming their strategies amid these changes in the world’s largest digital marketplace, we partnered with AliResearch, Alibaba Group’s research arm. We focused much of our research on six major trends in the e-commerce market that we expect to intensify in the next few years.