Despite Fears of a Slowdown, Here’s What US Retailers Can Learn From China
As one of the world’s largest economies, China boasts 700 million internet users. This year, the country’s online sales are estimated to be 55 percent of the global e-commerce market. And at 415 million, China’s millennial population — majority of which have grown up digitally native — exceeds the population of both the United States and Canada.
All of the above — combined with investments in technology and the resulting “digital interconnectedness” — has helped Chinese businesses outdo their American counterparts, according to a new study by Deloitte.
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“Next generation technologies in the United States are yesterday’s technologies in China,” read the advisory firm’s annual retail outlook. “For retailers and brands looking to expand, the advances in China can set the expectation for what is mandatory to compete in this market. It also serves as a global trend poised to enter all markets and define consumer expectations.”
In 2017, the country’s total mobile payment transaction volume hit $13 trillion, compared with $50 billion in the U.S. Alibaba, Tencent and JD.com are among the leading players in the sector, with the former two e-commerce behemoths battling for mobile payment supremacy.
Unlike American customers’ nonlinear shopping experience — think sifting through social media, search tabs and brand sites before a purchase is made — almost the entire shopping journey for Chinese consumers is integrated within a single platform via services like Alipay or WeChat Pay.
Joining a panel at the National Retail Federation’s 2019 Big Show, Alibaba Group president J. Michael Evans explained: “The simplest way to think about it is the digitization of the entire retail value chain for the benefit of the merchant and the consumer.”
He added: “Consumers don’t really care whether it’s online or offline; they just want to shop when and where they want to shop. But for merchants, it’s much more complicated. There’s inventory, logistics, payment, delivery and fulfillment. What we’ve done is create technology that allows you to digitize everything you’re doing online and offline, integrate them, provide merchants with all of that data so that they can optimize the supply chain, [become] more productive and increase the bottom-line profit margin.”
The report comes as new data from China sparked fresh worries over an economic slowdown as well as its impact on the global market. Not long after noting that its manufacturing sector was shrinking, government data showed that the country’s vast export industry suffered its worst month in two years, with the value of goods shipped from China dropping more than 4 percent in December.
However, the negative figure was offset by China’s record-high trade surplus with the U.S. in 2018. The $323.32 billion gap in value — a 17 percent increase from the previous year — comes as President Donald Trump and his Chinese counterpart, Xi Jinping, seek a trade deal to end a bitter dispute that has already seen tariffs on $250 billion worth of Chinese imports and levies on $110 billion of U.S. goods.
“We’re doing very well with China,” Trump told members of the press ahead of today’s speech in New Orleans, where he was scheduled to address the American Farm Bureau Federation. “They’re having a hard time with their economy because of the tariffs … I think that we are going to be able to do a deal with China.”
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