China E-Retail Market Report 2016

The report

China E-Retail Market Report 2016 is jointly released by Deloitte China and China Chain Store & Franchise Association (CCFA). This report provides a detailed analysis on the development status of global and China’s e-retail market and delves into online retailers’ key development issues based on a specific survey by Deloitte and CCFA about online retailers.

Viewpoints / key findings

• The consumer-led marketing age is coming
  In the Internet age, the consumer-led marketing age has begun as China’s retailing market is changing into buyer market from seller market. Current consumer behaviors and needs take on new trends and features: 1. channel digitalization and socialized online shopping; 2. quality-oriented purchase via channels and experience-oriented consumption; and 3. behavior personalization and mobile payment.
• Large retailers are active in cross-industry activities to build a consumer ecosystem
  Large retail giants are active in diversified development while consolidating their retailing businesses and improving consumer penetration rate through a multi-perspective coverage of consumers. Such cross-industry activities enable the competition for consumer resources to be expanded from retail industry to multiple scenarios including finance, entertainment, local services, socializing and logistics, making the diversified competition take shape.
• Digitalization is the core of retailers’ transformation into Omni-channel
  Omni-channel retailing connects all channels for strategic restructuring rather than incrementally adjusting the retail industry. Cooperation among strategy, operation and implementation is required for the revolutionary changes of shopping scenarios, category allocation, logistics warehousing, and service experience driven by digital transformation.
• Supply chain management becomes the key to retailers’ competitiveness
  In order to serve consumers better and lower corporate cost in the current competition, industry giants have been investing substantial capital and human resources to improve their supply chain management capabilities and strengthen management systems of logistics, warehouse and sources of goods. For cross-border e-commerce, overseas logistics efficiency also becomes the key to increase consumer satisfaction.
• The market still sees investment interest in e-commerce from capital
  The impetus of capital for e-retail development should not be underestimated. E-commerce financing maintains substantial growth and rural e-commerce, fresh products and cross-border e-commerce have developed into new investment hotspots. Meanwhile in the M&A market, e-commerce giants are actively leveraging M&As to complete their industrial chain layout due to limited profit and little growth potential while small and medium e-commerce can also increase their overall valuations through M&As, which improves the overall industry efficiency.