I have picked up an interesting topic that is related to the topic that we have chosen. It was taken from the Borneo Post dated 13 September 2010 that was just recently happening in China China
Nowadays, young Chinese teens are driving the booming e-commerce internet retail industry which estimated to have a total yearly turnover of 3.8 trillion yuan (441.2billion) by the Ministry of Commerce. Apart from that the Taobao – Chinese online auction site found that majority customers who are interested in these sorts of things would be at the age of 21 and 30. Most of them are fanatic about Louis Vuitton, Armani etc.
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| Chinese between 21-30 are so addicted into online shopping |
Hello Edith and Fiona, it’s quite interesting to read your blog posts. Just like you had mention, China e-commerce market is now expanding largely and the Chinese consumers prefer to shop online nowadays. I have found one article stated that according to the 2010 China Luxury Forecast, about 78 percent of the respondents said they would maintain their luxury goods consumption in the next 12 months, while almost 50 percent said they were willing to buy luxury goods online. (Chen 2010) From this statement, it can be shows that China consumers tend to be more active in online purchasing especially in buying luxury items. Distinct from past period, most of the Chinese consumers go for online purchasing as they tend to be alert to technology transform.
ReplyDeleteAccording to the survey done among Chinese online consumers, the major reasons that attract them to buy online are mainly because the favourable prices and comfort in internet shopping. (India Server 2010) By adopting internet shopping, Chinese consumers can easily make comparison between the prices offered by different online stores. And, the branded official websites offer favourable prices over franchised stores. Normally the franchised store offer relatively high price than its official website because it included the service charges, rental costs and other additional costs incurred in physical store. Besides that, online shopping is very convenient as consumers can browse the internet at anytime and anywhere.
In these days, there is a large consumption of luxury items online among the Chinese consumers especially in Shanghai and developing cities in China. It can be says that their living standard getting better and also the e-commerce activities. It may helps to improve the China economy.
References
Chen ZY 2010, 50% Chinese choose to buy luxury items online, China Daily, viewed 4 October 2010, http://www.chinadaily.com.cn/china/2010-07/22/content_11037134.htm
Most Chinese Prefer Buying Luxury Items Online: Survey 2010, India Server, viewed 4 October 2010, http://www.india-server.com/news/most-chinese-prefer-buying-luxury-items-30731.html
Hello Edith and Fiona,
ReplyDeleteThis discussion topic is really interesting.
According to the document title of ‘China In focus: Luxury Goods Market’, there is a correlation between the growth of e-commerce in China and sales of luxury goods. As respond to this statement and your blogpost, let me discuss on some of the reasons that lead China prefer to buy luxury goods online.
Convenient of overseas payment might be one of the reasons that lead China prefers to buy luxury good online. China people might claim that the overseas payment such as paypal is convenient and simple where they do not need to manually convert foreign currency by themselves. Consumers can skip the process of foreign exchange when dealing with international online retailers of luxury products. (Daily 2010) It makes the transaction process more easy and efficiency when purchase luxury goods online.
Second, able to read other customers’ review before purchase the products are another reason that lead China prefer to buy luxury goods online. Chinese customers regard quality of products is important. (Bachwitz et al. 2010) Moreover, the purpose of Chinese customers to buy luxury goods is not because they want to show off. (Lu Xiao 2010) They bought luxury goods due to the quality posses by products itself. Well, customers are able to investigate the products quality by referring to other customers’ review before purchase the luxury products. From the customers’ review, Chinese customers might able to know more information about the luxury products no matter is good or bad as customers will not get some of this information if purchase from physical shop.
Third, China people might able to purchase the luxury goods directly from branded company without through intermediary is also the reason they buy luxury goods online. Well, some branded company might not have physical shop in China, thus they might through agent to sell their luxury products. Undoubtedly, the price should be more expensive as they had adding additional profit margin on it. Thus, China people will prefer buy luxury goods online as it is cheaper and quality should be guarantee as it is bought from branded company.
References:
Daily, J 2010, Global Luxury Brands “Testing The Waters” in China’s E-Commerce Market, Signature9, viewed 5 October 2010, http://www.signature9.com/fashion/global-luxury-brands-in-china-e-commerce-market
Lu Xiao, P 2010, Luxury consumer behavior in mainland China: What exists behind the façade of new wealth?, European Business Review, viewed 5 October 2010, http://www.europeanbusinessreview.com/?p=2418
Bachwitz, S, Tarkay, B, Coleman, J, Dell, G, Humphrey, D, Lockhart, C, March, J, Neiss, M, Stevenhagen, M, Weingand, C, Yunker, A 2010, China In Focus: Luxury Goods Market, viewed 5 October 2010, http://www.export.gov/china/industry_information/Luxury%20Goods%20Market%20%28May%202010%29.pdf
Dear Pauline and Chia Chia,
ReplyDeleteThank you indeed for sharing with us about what both of you have written... Yes I do agreed with your saying regarding to the reasons that lead China prefer to buy luxury goods online, however there are other drawbacks that I would like to highlight.
There are many other drawbacks which in fact hinder the faster expansion of E-commerce in China: The greatest weakness in the Chinese market is the embryonic state of B2B development. Most E-commerce activities remain focused on B2C transactions, but there is very little B2B activity involved. Apart from that, low level of credit card and internet penetration (less than 1% of the population).
The viability of many of China's e-business model is uncertain. Most E-commerce models in China are rudimentary. The strategy is simply to build a site, hope to attract visitors and worry about how to make money later. Many sites are a mere copy other pages from overseas. Most consumer websites in China are E-commerce sites in name only, with shoppers taking orders online but paying offline, usually cash-on-delivery. Moreover, most sites maintain traditional relationships with inefficient suppliers and distributors.
Speaking of prices too also caused it to be often uncompetitive, too, and service standards are poor. China's e-commerce vendors cannot provide the benefits that customers in other countries have learned to expect, such as reduced prices that are usually lower than those found in conventional stores, superior service. With this, it would have some risks involved when dealing with e commerce in China.
The reference are:
ReplyDeleteKim Ki Hee & Leung C.K 2006, E-Commerce In China And Its Risks And Opportunities For US Companies volume 5 Number 3, International Business & Economics Research Journal
http://www.cluteinstitute-onlinejournals.com/PDFs/2006240.pdf
Hi Edith and Fiona,
ReplyDeleteI agree with your posting that people from China are preferred to online purchasing luxury items. Besides that, I have read about a news which indicates that about 50% of Chinese buy luxury items online. According to Ians, 50% of China’s urban residents say they prefer to buy luxury items through online. The reason for drawing more people to internet retailing is there are more favorable prices over franchised stores. In year 2009, according to China Luxury Forecasting, there is 78% of respondents indicated throughout a survey that they would continue purchase luxury items as reported by China Daily. It is more than 1,100 of the people who with an average annual income of 250,000 yuan took part in the survey. In addition, respondents state that they prefer to purchase online also due to the reason that they can just browse the merchandise anytime or anywhere they want or available since it is for 24 hours. In other words, it is more convenient for them to purchase through online.
References:
Ians 2010, 50 Percent Chinese Buy Luxury Items Online, Thaindian News, http://www.thaindian.com/newsportal/business/50-percent-chinese-buy-luxury-items-online_100400897.html.
Hello!
ReplyDeleteIt is definitely shocking to see the statistics that many Chinese prefer to buy luxury goods online. In my opinion luxury goods is inevitably expensive and usually consumers take extra precaution when purchasing these goods, not to say purchasing it online where we might find the other party, difficult to be trusted as we do not know who the seller really is. Besides that, despite all the privacy and security issues when purchasing online, the statistics shows a different manner of results. This perhaps shows that these websites may have taken precautions in handling such danger. However, I believe that no matter how many steps of precautions you may take, there is still a risk there. This is relatively important where the goods that they purchase are not inexpensive. Some may cost a lot of bucks when you mentioned about Louis Vuitton, Armani and etc. Hence, it is definitely shocking to see that many Chinese prefer to purchase these expensive products online. Despite there are a lot of issues involved and there might also be genuine issues concerned.
Looking at the statistics of young Chinese teens adapting into the e-commerce internet retail industry and also the huge population in China, I believe there is a tendency of an immense growth of e-commerce in China. Many will start to adapt to e-commerce, firms and later followed by consumers. With China having the largest population in the world, I believe that it will also influence the other countries also to adapt to e-commerce because of the increasing of power and also from economic point of view. Hence, in my opinion I would not be surprised if the number in the statistics increase tremendously in years to come.