China’s M-Commerce Spending Sees Boost In 2015

Online shopping in China is moving to mobile in a very big way.

The latest research from Emarketer projects commerce taking place on smartphones, tablets and other mobile devices will reach $334 billion in 2015, accounting for a record high of 49.7 percent of total eCommerce expenditure, Tech In Asia reported yesterday (July 30).

Emarketer’s forecast shows more than 10 percent of total retail sales in China will take place via mobile by 2016.

According to Emarketer, China’s retail m-commerce sales are estimated to be nearly 450 percent of those in the U.S., where such sales are projected to increase 32.2 percent this year. U.S. retail m-commerce sales will represent 22 percent of the total retail eCommerce but just 1.6 percent of all retail sales for the year, which draws a striking comparison to China, where 7.9 percent of total retail sales will be made on mobile devices.

While the Chinese retail market continues to become more digital, the country’s eCommerce companies are ready to bring that transformation to far reaching areas.

Both Alibaba and JD.com are betting big on China’s rural communities, where the rate of eCommerce growth now outpaces that in major cities, Reuters reported today.

But for Alibaba, fewer than one-tenth of online purchases made through its platforms were actually shipped to China’s countryside in the first quarter of this year. With an estimated 600 million people living in rural China, the eCommerce giant sees significant growth opportunity for the market, estimating the potential market at 460 billion yuan ($74 billion) by 2016.

In order to boost the Internet usage in rural regions, Alibaba recently teamed up with China Telecom — the nation’s largest telecom operator — to roll out low-cost smartphones to citizens living in these areas. The deal with China Telecom — and access to its 186 million subscribers — is part of a two-pronged attack for Alibaba. The eCommerce giant has increasingly come to view smaller cities as a key to the growth of both its retail business and its operating system, YunOS.

Rival JD.com is not far behind on a rural eCommerce strategy of its own.

Late last year, JD.com set up a county-level operating center in south China’s Guangdong Province. The move followed a decision to open a physical store in a small county in the northern Hebei Province in November to help farmers purchase home appliances via JD.com’s online store.

In order to better reach the rural population, Alibaba has been heavily recruiting locals who can set up service centers in smaller villages and assist the people living there with shopping online, Reuters said.

These recruits, or “partners” as Alibaba calls them, tend to be younger, more educated and comfortable with technology, especially when it comes to browsing sites like Alibaba’s online emporium Taobao. Partners are given both a written and computer exam, interviewed and then trained for two to three days before being sent out to help the rural masses.

“My dreams aren’t that big,” Cheng Yonghao, an Alibaba local recruit, told Reuters. “I just want to live in the countryside and give back to the people there so they can have the same quality of life as people in cities.”

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