China retailers bet that the future is online
(From Asia Times Online) Several large Chinese retailers have announced plans to join hands with manufacturers in developing online marketing.
Statistics show that some 70% of China’s chain retailers have set up websites, of which nearly 26% have launched online marketing initiatives to different degrees.
Ministry of Information Industry statistics, however, show that online transactions make up only 0.02% of the total retail sales volume in mainland China, indicating that consumers here have not yet taken to online purchasing.
Household-appliance manufacturers, including TCL, Epson and Philips, recently announced their cooperation with professional e-commerce websites in opening brand flagship stores.
Such traditional household appliance retailers as Gome, Suning and Dazhong Electronics then announced plans to increase their investment in online marketing. An e-commerce platform constructed by Bailian Group has gone into operation.
In 2005, Lotus opened an online store, which offers prices similar to those at its traditional stores but stocks a smaller variety of goods. However, when addressing the 2007 China Retail Sales Marketing Forum, held in Hangzhou last Saturday, a Lotus spokesman said the company has no plans to increase its investment in online sales. The strategic focus of the company in 2007 will be mergers and acquisitions, expansion, and establishing more commercial outlets.
French chain Carrefour announced the opening of an online store last June, and three months later it opened stores on a trial basis in Beijing, Qingdao, Wuhan, Guangzhou and Shenzhen. Carrefour admits that its online stores are still in the development stages and face many challenges ahead. Company sources disclosed that the biggest problem at present is high logistics costs.
Wal-Mart says it faces the same problem, which is why the US retail behemoth has not yet gone online in China.
