JD.com expects China’s online retail market to grow further

Updated 2017-11-03 11:01:57 CGTN

Online shopping is not just a common phenomenon in China. It is almost a way of life. Clothes, electronics and appliances, household products, groceries, you can get them all online.

Despite the ubiquity, online retail sales only accounted for 15.5 percent of China's total sales of consumer goods in 2016.

Although this is an increase from just 6.2 percent in 2012, analysts and industry players deem the online market's share as still small and under-penetrated. According to the National Bureau of Statistics, nationwide online retail sales rose from 1.3 billion yuan in 2012 to almost 5.2 billion in 2016.

Ansel Liu, director of JD's Data Research Institute, believes there is further potential for China's online retail market to grow.

"Online shopping has principally been dominated by products such as electronics and clothing. But taking a look at fast-moving consumer goods such as wine, online sales only account for less than five percent, with the share even smaller for groceries," he says.

"We are confident the online retail market will go above 20 or even 30 percent of the total sales of consumer goods in the near future," Liu adds.

As it is, China's online retail market currently stands at 750 billion US dollars.

Boasting 250 million in active users, how does JD make use of data to analyze and keep up with trends?

Liu says the e-commerce company has observed changes on two fronts, which has seen China's online retail market penetrating into a much larger and more diverse demographic and geography.

"The first wave of online shoppers are those born in the 1980s. But in the past 5 years, we see an exponential growth coming from those aged 16-25, and those above 45 years old," he says.

Besides, the number of shoppers from smaller-tiered cities (third-tier and below) has also increased, Liu added.

In the first three quarters of 2017, online sales surged by 34.2 percent year-on-year, contributing largely to the 10.4-percent growth of the total retail sales of consumer goods.

Liu says JD expects sales growth from smaller-tiered cities to continue.

"As for larger cities, buyers have expanded their choice of purchases from electronics and appliances, to groceries. However, shoppers from smaller-tiered cities are still very much focused on appliances," he says.

To continue remaining relevant, JD has jumped on the bandwagon and launched its first ever unmanned supermarket at its headquarters in Beijing two weeks ago.

It has plans to roll out more of them, but it is remaining tight-lipped on this for now.

How does JD's unmanned supermarket work? As you enter the store, a camera recognizes your face. You then use your JD app to scan its QR code. You can pick any item from the store, and just walk through its checkout passageway, and payment will be automatically deducted from your JD wallet or WeChat account.

As simple as that – you do not even need to scan the items you have selected. The smart technology embedded in the checkout walkway is able to detect that.

JD is not the newest to the game. Other e-commerce players have also launched unmanned supermarkets and convenience stores.

It is interesting to see how this integration of online-offline sales platform pans out in the future.

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