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Latest features and trend of China's online retail market, including key players like 360buy and Alibaba
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Will Tao Analysis Director
iResearch Consulting Group www.iresearchchina.com
China Online Retail
New Trends of
June 2012
iResearch – China Internet Expert
www.iresearchchina.com
Founded in 2002, became the leading Internet research firm in China;
Databases and reports are regarded as the industry standard;
Quoted by most of listed Internet companies in their IPO documents;
Cited by a number of famous financial, tech and investment institutes.
2
Online Retail Is Booming
3
263
461
767
1,184
1,569
2,012
2,551
105.2% 75.3%
66.3% 54.5% 32.5% 28.3% 26.8%
2.0% 2.9% 4.2% 5.5% 6.5% 7.5% 8.6%
0
1,000
2,000
3,000
4,000
2009 2010 2011 2012e 2013e 2014e 2015e
GMV of online shopping (B RMB) YoY growth rate（%） % of Total retail sales（%）
2009-2015 China Online Shopping GMV
92% 86% 77% 70%
66% 62% 59%
8% 14%
24% 30%
34% 38% 41%
0%
20%
40%
60%
80%
100%
2009 2010 2011 2012e 2013e 2014e 2015e
C2C（%） B2C（%）
2009-2015 China Online Shopping Construction
Source: The data is calculated based on the financial reports of enterprises, interviews on industry and experts, and iResearch statistical and forecasting model.
China Is Just One Step Behind the US
4
$13.4 $16.5
$18.1
$25.6 $25.7 $28.1
$31.3
$37.6
$33.9 $32.9 $32.1
$43.4
$38.0 $37.5 $36.3
$49.7
81% 80%
53%
88% 92%
75% 73%
47%
10% 9% 9% 11% 12% 14% 13% 14%
0
10
20
30
40
50
60
70
80
Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11
US-China Online Shopping Dollar Sales With YoY Growth
China US China US
$ Billion
Note: The convert rate of RMB/USD in this slide is 1USD=6.3RMB and China’s statistics is the sum of B2C and C2C.
Source: The data is calculated based on the financial reports of enterprises, interviews on industry and experts, and iResearch statistical and forecasting model.
C2C
Platform
B2B
Platform Domestic B2C Export B2C
General Websites
Vertical Websites
Clothing Shoes &
Bags Customer
Electronics Cosmetic Luxury Others
Online Travel
Reservation Group-buying
Local
Services
Major e-Commerce Websites in China
B2C
Platform
5
Payment &
Delivery
Entrance
China B2C Is Highly Concentrated
6
Market Share of China B2C Online Shopping
Websites in 2012 Q1
67.4% 77.6%
32.6% 22.4%
0%
20%
40%
60%
80%
100%
US China
US & China B2C Top Players Market
Share in 2011
Source: iResearch, CNNIC, ComSorce;
Top
25
Top
5 Tmall
51.5%
360buy
22.7%
Amazon
3.5%
Tencent B2C
3.2%
Suning.com
3.1%
Dangdang
1.8%
51buy
1.5%
VANCL
1.3%
Coo8
1.2%
Newegg
0.8% Others
9.4%
And Models Are Not The Same
7
Models Companies Power
Platform
Online retailers
Brick and mortar
retailers
Monetization
Ads, commission
Markup
Markup
Where Is the $ From?
8
2011Q4 Buyers(M) Transactions
per Buyer
Dollars per
Transaction
Dollar
Sales (B)
182 2.8 $97 $50
10% -2% +6% +14%
194 4.6 $42 $38
20% +31% -8% +46%
Note: China’s statistics excludes B2C and C2C and the convert rate is 1USD=6.3RMB
Source: iResearch, CNNIC, comSorce;
Vs Q410
Vs Q410
Driver One: More Buyers
9
Source: The data is calculated based on the financial reports of enterprises, interviews on industry and experts, and iResearch statistical and forecasting model. & comScore
109
148
187
228
269
314
363
36.3%
35.8% 26.4% 21.8%
18.1% 16.7% 15.6%
31.5%
32.9% 40.5%
45.5% 49.8% 53.2% 56.6%
0
100
200
300
400
500
600
2009 2010 2011 2012e 2013e 2014e 2015e
User Scale of Online Shopping (M) % Growth Rate % of PC Internet Users
User Scale of China Online Shopping Market
From 2009 to 2015
74%
41%
0%
20%
40%
60%
80%
US China
Online Shopper Penetration in China Still Has
Huge Potential
1.8x
185
209
0
50
100
150
200
US China
unit: m
Attract Customers - Ads and Navigation
10
41.9
36.3 35.6 38.8
42.4 45.9
53.2
57.3
62.7 65.1
61.0
69.2
3.3 3.7 0.0
4.1 0.7
4.6 4.2 4.0
9.7
5.0
11.2 14.1
0
10
20
30
40
50
60
70
80
360buy UV and Display Ads Spent
UV Online ads spent
Source: iUserTracker, iAdTracker & EcommencePlus, iResearch's professional e-Commence measurement software.
Note: The traffic sources of online retails excludes directly typing in browsers
unit: m
53.0% 51.3% 49.3%
33.1%
30.4% 34.1% 39.3%
43.2%
4.9%
6.4%
4.6% 7.9% 6.2%
7.0% 6.7% 11.4% 11.1%
0%
20%
40%
60%
80%
100%
360buy Amazon China Dangdang Vancl
search navigation portal ads networks others
Online Retailer Traffic Sources in Oct. 2011
11
Pinterest Meilishuo Mogujie
Driver Two: Higher Conversion Rate
12.5 7.6 8.2 9.6 7.7 5.4
6.6
11.2 11.5 13.5
17.6 19.5
0
5
10
15
20
25
08'11 09'11 10'11 11'11 12'11 01'12
0
20
40
60
80
100
Avg. Mins per visitor Total UV(M)
6.5 6.6 7.3 7.1 6.7 8.0
5.4
10.5
14.2
18.7
24.4
15.7
0
20
40
60
80
100
0
5
10
15
20
25
08'11 09'11 10'11 11'11 12'11 01'12
Avg. Mins per visitor Total UV(M)
52.3
93.5 82.5
88.3 80.4
97.8
1.3 2.1 3.3
4.9 7.5
11.7
0
20
40
60
80
100
0
5
10
15
20
25
08'11 09'11 10'11 11'11 12'11 01'12
Avg. Mins per visitor Total UV(M)
Social Commerce in China
12
16%
19%
6%
14%
42%
43%
26%
28%
25%
24%
43%
35%
16%
14%
25%
24%
Meilishuo
Mogujie
China online shopper
China Internet user
<18 18-24 25-35 >35
30.0% 70.0%
35.5% 64.5%
31.8% 68.2%
User Gender User Age
Source: China: iResearch & iUserTracker a panel measuring over 200,000 Internet users' online behaviors in China on Jan. 2012; US: comScore
Leading: the Alibaba Monarchy
13
43.1% B2B
95.2% C2C
51.5% B2C
47.8% 3rd party payment
Vendor Customer
B2C
B2B
C2C
Payment
Cloud Computing/Business Intelligence
Price Search
Ads Networking
Taobao
Logistic
Service
Information flow Cash flow Logistic flow
Groupbuying SNS/
Pinterest alike
The Alibaba Monarchy (Cont’)
14
1.8 6.1
30.0
92.0
247%
392%
207%
0
20
40
60
80
100
120
140
2008 2009 2010 2011
Tmall
Tmall Transcation（B RMB） YoY Growth（%）
Business model
Brand
Management
Source: The data is calculated based on the financial reports of enterprises, interviews on industry and experts, and iResearch statistical and forecasting model.
Ads 72%
Commission 28%
Tmall Revenue 2011
Key Players
15
0
20
40
60
80
100
120
140
160
180
01 02 03 04 05 06 07 08 09 10 11 12
Online Shopping Websites’ UV in 2011
Taobao 360buy Dangdang Amazon Vancl 1 2 1 2
Note: 1. The data includes Tmall and Taobao. 2. The data excludes V+
Source: EcommencePlus, iResearch's professional e-Commence measurement software.
0%
1%
2%
3%
4%
5%
6%
7%
8%
01 02 03 04 05 06 07 08 09 10 11 12
Taobao 360buy Dangdang Amazon Vancl
Online Shopping Conversion rate in 2011 unit: m
360buy – A Game Never Stops
16
30B RMB sales in 2011
No.1 in B2C websites (except Tmall)
User scale
User experience
Management
Cash flow
IT system
Source: The data is calculated based on the financial reports of enterprises, interviews on industry and experts, and iResearch statistical and forecasting model.
1.3 3.6
10.2
30.8
177% 183%
202%
0
10
20
30
40
50
2008 2009 2010 2011
360buy
360buy Transcation (B RMB) YoY Growth（%）
“New” Strong Players
17
5.9
2.7
3.8
0
1
2
3
4
5
6
7
Unit: B RBM
Conclusion
18
Online shopping has a great growth potential.
It become more and more concentrated.
Online retail in China is different
How to attract more customers and persuade them to spend.
Alibaba shows the best way of doing it.
Better drivers, more advantages
2012 is the critical point
This year will determine who will win.
Some new strong players might emerge.
Appendix I - iUserTracker Interface
19
Appendix II - ECommencePlus Interface
20
Disclaimer
21
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