With Internet traffic dividends gradually disappearing, traditional Internet e-commerce companies have noticed the vast traffic of the offline market and have begun to build offline retai...Aug 22 2021
The Chinese MarTech companies' valuation and profitability are much lower than American MarTech companies. The fast iteration of the mobile Internet and the Internet giants' MarTech ec...Aug 22 2021
The Chinese government works harder to promote the integration of the digital economy and traditional industries. The application of the industrial Internet platforms will continue to deepen i...Aug 22 2021
Due to rigid demand, China’s fresh food retail market has been growing steadily in recent years and exceeded 5 trillion yuan in 2020. Fresh food is among the basic consumer goods in Chin...Aug 22 2021
The consumption upgrade has promoted the growth of cross-border e-commerce users and the demand for cross-border shopping. As of the first half of 2020, the number of cross-border e-comme...Aug 22 2021
Status Quo of China's Retail Cloud Industry
Centralization and decentralization models co-exist
With the rise of omnichannel retail, retailers realize the importance of connecting offline and online scenarios. They also admit that obtaining digital assets in offline consumption scenarios by offline digital empowerment can improve the operation of offline businesses. With their technical capabilities, retail technology companies provide retailers and brands with smart marketing SaaS tools and solutions to increase potential conversion, customer retention, and customer repurchase rates; With e-commerce retail operation experience, traffic access, and technical advantages, the online retailers provide retailers with retail cloud solutions and digital upgrades of offline stores; with their supply chain management and operation abilities, product selection advantages and brand status, the offline retailers provide retail clouds for retailers and digital transformation for terminal retailers. Being the digital infrastructure of the future retail industry, the retail cloud has both centralization and decentralization model.
Main Players in the Retail Cloud Industry
Relying on the company‘s smart retail network, through the three core abilities of smart supply chain management ，Smart logistics management and Smart marketing management, MISSFRESH retail cloud provide offline supermarkets, vegetable markets, community stores and other retailers with SaaS+DaaS+AI services, covering commodity planning, supply and demand management, user online marketing, home delivery service and smart store operation. By digital transformation and upgrading of traditional retailers such as supermarkets, community convenience stores, and vegetable market, MISSFRESH retail cloud use AI to replace human in decision-making process to solve problems such as difficult SKU management, high losses caused by transport, short of online customer acquisition methods, etc., and help clients build exclusive online channels to turn their offline customers into online private traffic. Using retail cloud technology platform to improve the digital level of retailers, enhance operating efficiency, take opportunity of online development of retail to reduce costs and increase revenue will become the intelligent solution for fresh food and FMCG retail industry
Future Trends in the Retail Cloud Industry
The retail cloud is expected to cover a variety of retail forms in the future, improving the overall digital level of the retail industry
Due to the differences in SKU numbers and categories, the digital construction levels of retail forms vary. The convenience stores and supermarkets have a relatively high digital level, while the vegetable markets, mom-and pop-shops and other small retailers have low levels. Compared to traditional software services, the retail cloud is likely to cover multiple retail forms to enhance the digital level of the retail industry since it has lowered the use threshold.
Factors Driving the Development of China's Retail Cloud Industry: Technology
Big data, algorithms and AI technologies keep improving. The emergence of cloud provides platforms that empower business expansion
With the continuous development and improvement of the digital technology system, which has big data, cloud computing and AI as core technologies, retail companies are trying to use digital means to solve the problems in the aspects of consumers, products and scenarios through digital means. The accelerated omnichannel retail progress brings a lot of fragmented data to retail companies. However, traditional digital tools can hardly integrate or explore all retail data. With the advantage of efficient compatibility, the data architecture of the retail cloud can promote the improvement of retailers’ digital mining capabilities. and with the integration of retailers’ own businesses, the retail clouds provide systematic retail digital solutions for retailers, especially small and medium retailers.
Analysis of the Relationship between Application Scenarios in China's MarTech Market
These five scenarios empower each other, and effectively complete the realization links of enterprises’ marketing demands.
Five scenarios, data and strategy, content and creativity, advertising, channel operation and conversion, customer and process management, constitute the core service ability directions of China’s MarTech service providers. These five scenarios empower each other, and effectively complete the realization links covering data analysis and management, marketing strategy formulation, customer acquisition, sales conversion, customer operation, marketing effect analysis, and so on. (1) Data & Strategy Scenarios is the basis for the intelligent operation of other scenarios; (2) content and creativity scenario provide material for advertising; (3) Advertising scenarios guide traffic to sales conversion and customer operation; (4) Channel operation and conversion scenarios are important conversion carriers and expand advertising channels; (5) customer and process management scenarios improve the efficiency of advertising and channel operation and contribute to efficient customer operation.
Demand and Service Value of the Data & Strategy ScenarioService Value of Programmatic Outdoor Advertising
Data processing technology and product function operation optimization are critical to scenarios services
The data and strategy scenario covers data analysis and testing, management, visual presentation, monitoring and secure computing services. The functions and services are involved before, during and after the marketing activities of the demand side. The core demanders in the data and strategy scenario are brand owners, advertising agencies, and media platforms. Among them, the demands of advertising agencies and media platforms center on providing better marketing services. The brand owners’ demands mainly include customer data management, marketing activity planning, and effect analysis, etc. (1) Since this scenario is very close to data processing, technology stability and reliability and the guarantee of data security are extremely important and are the foundation for service providers’ products and services. (2) Data and strategy scenarios can be the basis of other MarTech scenario services. Service providers need to optimize product operation and make products more user friendly so that demanders can quickly understand the product's abilities and make a quick layout.
Business Models of the Content and Creativity Scenario
Business Models of the Content and Creativity Scenario
Keep improving content creation service capabilities in differentiated scenarios, focusing on strengthening commercialization capabilities.
Because of the competition for traffic, the industry has higher requirements for the number and quality of ads. Now, in the content and creativity scenario, MarTech marketing service providers mainly provide enterprises with differentiated content and creativity services through creative templates, programmatic creativity platforms, creative and content trading platforms. 1) Programmatic creativity platforms are more suitable for clients with high per customer transaction, and usually charge service fees monthly or annually; 2) Creative template model is suitable for individuals or small business owners since the fee is low. The main business models include software subscription fees and one-time payments. 3) The platform transaction model mainly earns service fees or price spread through matching transactions. MarTech services providers in this scenario are now able to serve the diversified content forms and creativity scenarios. However, the profitability still needs improvement. Service providers need to keep cultivating the market's willingness to pay for new technology services. The attribution ability of digital technology for content creativity is expected to improve, which can increase the profitability of enterprises.
Innovate digital applications to realize product-efficiency linkage and increase the advantages of outdoor advertising scenes
Traditional outdoor advertising has many pain points. The brands can‘t track the effect of ads, and are facing Low advertising accuracy and high trial and error costs of advertising placement. The agencies are facing difficulties such as low advertising placement efficiency, high labor costs , etc. Outdoor media’s main problems are low utilization and unit price of advertising space, and lack of advertising space capacity, etc. With the continuous development of 5G new infrastructure and IoT technology, through connected hardware equipment, digital construction of management system, and improvement of data accumulation, the outdoor service providers can improve the programmatic application of outdoor ads, gradually create a closed data loop and achieve unified brand and performance marketing. However, outdoor advertising doesn‘t have a whole digital chain of marketing. The core issue lies in how to accumulate data of enough dimensions. In the future, through technical methods, innovat ive means, and data resource cooperation between industries, it is possible to increase the interactivity of outdoor advertising, accumulate multi-dimensional data of users to connect the data of user life cycle and the whole marketing chain, complete a closed outdoor advertising loop, enhance the unified brand and performance marketing ability of outdoor advertising.
The Development Space of China’s Industrial Goods Market is Huge
The market scale is over 10 trillion yuan
In 2020 China’s industrial goods market scale was 10.6 trillion yuan, of which the MRO market and the PM market accounted for 20% and 80%, respectively. It is expected that the scale of China’s industrial goods market will hit 13.2 trillion yuan in 2025, with a CAGR of 4.7%.
This huge market has attracted Internet giants such as JD.com to join. Through integrating new technologies and new models and coordinating digitalization and supply chain, they provide conditions for efficiency improvement and cost reduction in every link, serving the development of the real economy and contributing to the transformation and upgrading of traditional industries.
The market scale is expected to hit 1.75 trillion yuan in 2025.
In 2020 China’s industrial goods B2B e-commerce market reached around 470 billion yuan, of which the online scale accounted for nearly 4.5%. The market scale will keep growing thanks to the transparent purchase policies, application of technologies, increasing demand for cost reduction as well as the improvement of the industrial goods B2B e-commerce platforms’ facilities and services. It’s expected to hit 1.75 trillion yuan in 2025, with a CAGR of 30% in the next five years.
Industrial goods B2B platforms should have multi-dimensional layouts to meet the needs of the upstream and downstream of the industry chain
As pandemic is becoming the norm now, to make suppliers more relied on online sales channels, iResearch believes that the industrial goods B2B platforms should expand their layouts in the following aspects: digital capabilities, premium service capabilities and online and offline coordination to help buyers expand marketing channels to achieve individualized marketing and improve digital empowerment.
Because of the pandemic, the development of suppliers’ online sales and enterprises’ online purchasing will accelerate.
The surging digital application provides B2B suppliers with great opportunities. Online sales can help suppliers expand the coverage, reduce customer acquisition costs, and prominently improve sales efficiency. In August 2020, the revenues from online channels account for 43% of all channels of B2B suppliers, which is the largest proportion.
Because of the pandemic, many purchasers have realized that online purchasing is convenient and scientific procurement is necessary. The improvement of platform technologies and services has greatly enhanced the purchaser’s trust in platforms. The new trend of online procurement will rise. According to iResearch, compared to consumer goods e-commerce, the penetration of industrial goods e-commerce is still low. As enterprises are experiencing digital transformation, the suppliers and purchasers of the industrial goods will accelerate their online layout, and Industrial goods e-commerce will have new development opportunities.
Aug 22 2021
Background of China's Fresh Food E-commerce Industry
Trillions of tons of fresh food products were consumed in China every year
With the largest population, China has a huge number of consumers. According to data from the National Bureau of Statistics, 3.1 trillion tons of main fresh food products were consumed in China in 2019. With improving consumption concepts and levels, peoples’ demand for fresh food products will keep growing.
Background of China's Fresh Food E-commerce Industry
Fresh food e-commerce has huge room for growth
People have rigid demand for fresh food, which is one of the basic consumer goods in china. China’s fresh food retail market has been growing steadily in recent years, exceeding 5 trillion yuan in 2020. With rising disposable income and consumption expenditure, iResearch believes that the fresh food retail market will maintain its growth momentum and its scale will hit 6.8 trillion yuan in 2025.
Background of China's Fresh Food E-commerce Industry
Offline channel is the main retail channel of fresh food, but online retail is accounting for an increasing proportion.
Offline retail channels such as supermarkets and vegetable markets are still the main retail channel of fresh food. The penetration rate of online fresh food retail is low but it is surging. The pandemic in 2020 further accelerated the growing of online fresh food consumption, which accounted for 14.6%. The penetration of online purchase of fresh food will keep increasing since consumers are forming the habit of buying fresh food online and fresh food retail market is attaching increasing importance to online retail.
Market Size of Fresh Food E-commerce in China
The development of fresh food e-commerce accelerated because of the pandemic and its scale exceeded 400 billion yuan in 2020
Influenced by the Covid-19 pandemic, China’s fresh food e-commerce market developed quickly and reached 458.49 trillion yuan in 2020, increasing by 64% compared to 2019. With the development of fresh food e-commerce and the maturing models, the formation of users’ online purchase habits and the increasing fresh food e-commerce users, and maturing technologies, iResearch thinks that the fresh food e-commerce industry will maintain fast growth and its scale will exceed 1 trillion yuan in 2023.
Development Background of China’s Cross-border Shopping Industry
China's import trade is steadily growing in the post-pandemic era
China has achieved impressive results in coordinating pandemic prevention and control and economic and social development. In 2021, the proportion of China's imports in total imports and exports has exceeded that of 2019. In the post-pandemic era, China's growing import has laid a solid foundation for the rapid development of the cross-border shopping industry.
Types of Cross-border Import Retail e-Commerce Platforms
Cross-border import B2C e-commerce can provide high-quality comprehensive services
From the perspective of consumers, the cross-border import B2C platforms, especially the head ones, have prominent comprehensive advantages. Cross-border import B2C e-commerce platforms can provide a higher guarantee of authentic products than the C2C platforms. B2C platforms have self-built warehouse and logistics systems and provide after-sales services. Their obviously have better performance than foreign cross-border shopping platforms and import C2C platforms.
Types and Characteristics of Cross-border Shoppers (2/2)
Post-95s and post-00s add new blood into the cross-border consumer group
The proportion of post-95s and post-00s in the users and consumption amount of cross-border import retail e-commerce platforms have been growing year by year. The proportion of their consumption of imported goods is much higher than that of other age groups. Data from Tmall International show that the proportion of its users born after 95 increased from 28.7% in 2018 to 34.9% in 2020.
Development trends（1/2）Aug 22 2021
Driven by 'data + ecology', cross-border e-commerce platforms increase their penetration in the upstream and downstream of the supply chain
The platforms are driven by 'data + ecology' and have become the necessary infrastructure and core application channels for cross-border supply chain upgrading. Their businesses cover warehousing & logistics, financial payment, customs clearance, and so on. The platforms integrate the service providers in market segments, improve infrastructure, and facilitate the digital transformation of the entire ecology, including precise marketing empowered by user data (such as personalized marketing based on consumer data), light asset operation (such as adjusting supply through consumer insights and transaction forecasts), and innovative process transformation (for example, Tmall International established a new model of 'bonded import + retail processing' to realize customized supply chain services). The platforms that cover the full cycle of brand incubation, keep optimizing cooperation models and performance networks, and carry out in-depth reform of the supply chain will have more advantages in the long-term development.
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