China Online Shopping Grows 2.8-Fold Over RSCG in Q2 2013

According to Q2 2013 China Online Shopping Report released by iResearch, GMV of China Online Shopping market hit 437.13 billion Yuan, up 45.3% compared with the same period of 2012. As to online shopping market structure, B2C accounted for 36.1%, up 2% over Q1 2013. According to the share of online shopping market, Tmall and JD took a combined share of 67.9%, leading B2C and independent B2C market separately.

GMV of China Online Shopping Market in Q2 2013

According to iResearch, GMV of China online shopping market attained 437.13 billion Yuan, up 24.2% QoQ and 45.3% YoY. The data from National Bureau of Statistics of China shows that total retail sales of social consumer goods was 6.03 trillion Yuan in Q2 2013, up 8.7% QoQ. GMV of online shopping took the share of 7.3% in total retail sales of social consumer goods and QoQ growth rate of online shopping GMV was 2.78 fold over growth of retail sales of social consumer goods.

iResearch analyzes that China online shopping market experienced “price wars” in Q2. Major e-commerce companies declared the “price war” one after another with the promotion modes of anniversary celebration, cash back, the low price, discount, coupon etc. to stimulate consumption, attract online shoppers’ participation and raise online shopping GMV, up nearly 50% YoY. Meanwhile, there is no doubt that the “non-intervention” attitude of Ministry of Commerce of the People’s Republic of China further drove the development of e-commerce industry.

B2C Market

According to iResearch, GMV of China B2C online shopping market including B2C on C2C platform in Q2 hit 157.61 billion Yuan, up 2% compared with Q1 and occupied 36.1% in the overall online shopping market. As to the growth rate, YoY growth rate of B2C online shopping market in Q2 was 77.4%, 2.4 fold over C2C online shopping market growth.

iResearch analyzes that growth B2C share is attributed to the following reasons. Firstly, “price war” in Q2 was mainly launched on B2C platform, which lead the online shoppers’ attention to B2C; Secondly, online shoppers’ attitude towards online shopping tended to be rational due to the increasing demand on goods quality. Thirdly, the low price advantage of traditional C2C platform was not as attractive as before, resulting in the increase of B2C share indirectly.

Market Structure

In Q2, B2C market structure was similar to last quarter, that is, Tmall and JD kept leading position in B2C and independent B2C market separately. Tmall occupied 50.8% in B2C online shopping market by GMV. In other B2C companies, the YoY growth rate of Suning, Tencent, Gome, Yihaodian and Vipshop were higher than the overall growth of B2C industry.

In the independent B2C market, JD accounted for 43.9%, slightly up over last quarter. Suning occupied 12.9% in independent B2C market, up 1.7% QoQ. The share of Amazon China, 51buy.com and Vipshop were over 5% in Q2. The combined share of top 9 companies was 86.8%, indicating that the competition in B2C market got fiercer and the market structure further concentrated.

All the major e-commerce companies participated in the price war and “price war” has become a kind of marketing method, rather than just way to compete for market share. Also, the goal of the price war was not price cutting, but to stimulate consumption at the greatest extent possible.

iResearch analyzes why e-commerce enterprises frequently launch price war. On the one hand, if not following the trend of price war, e-commerce companies will fall behind other competitors in the market. But participation in price war does not mean they can change their position in the market. On the other hand, the online shoppers tend to be more rational, and the price wars are not as attractive as before. In the long-term, the e-commerce companies shall not just relay on low price to attract consumers, but to strengthen the management of the supply chain through the platform construction and to take advantages in the suppliers and the channels.

iEcTracker Data

According to the measuring data of iEcTracker, mobile phone sales on JD and Tmall took over 70% in B2C mobile phone sales market in May 2013. However, both the sales of JD and Tmall declined slightly since March. 51buy and Suning followed closely with a combined share about 20%.

As to sales of different brand mobile phone, top 10 well-sold mobile phones are dominated by foreign brands. Nokia 1010 and iPhone 4 White ranked top two on the list. As Xiaomi provided more chance to purchase the phone, Xiaomi 2 was favored by the fans with M2 and M2S on the top 10 well-sold list.

iEcTracker is a kind of third-party measuring product launched by iResearch, providing retailing data of China major e-commerce platforms. By measuring retailing data of these platforms, iEcTracker helps e-commerce platforms and brand manufactures understand the industry structure, realize advantages and disadvantages in the process of development, know user behavior, and then improve product design, make rational marketing program and offer data reference and relevant recommendations.

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