This Week's Herman Trend Alert

Leadership in Normal 2.0
 

  The Herman Trend Alert

April 3, 2013

China's e-tail Explosion

Almost overnight, China has become the world's second largest online retail (e-tail) market. Revenue estimates for 2012 run as high as $210 billion with a compound annual growth rate of 120 percent since 2003. At the same time, the compound annual growth in Brazil was 34 percent, and in the United States, 17 percent. These statistics are among the key findings of "China's e-tail Revolution: Online Shopping as a Catalyst for Growth", a new report by the McKinsey Global Institute.

China's retail sector already is among the most wired anywhere. Online sales accounted for about 5 to 6 percent of the country's total retail sales in 2012, compared with 5 percent in the United States. In fact, by the year 2020, it "could potentially lift China's private consumption by an additional 4 to 7 percent. Here's why: at 129 million (in 2011), China has the world's largest online population, surpassing the US's 81 million by remarkable 59.3 percent.

In point of fact, most (about 90 percent) of Chinese e-tailing happens on digital marketplaces, megasites similar to eBay or Amazon. "These megasites include PaiPai, Taobao, and Tmall, which in turn are owned by bigger e-commerce groups." Moreover Chinese e-tailing is not just replacing traditional retail transactions, but it is also stimulating consumption that would not otherwise take place. That stimulus is "the lift" referred to in the first paragraph.

Although still in the early stages of growth, China's e-tail ecosystem is already quite profitable, realizing margins of around 8 to 10 percent of earnings, before interest, taxes, and amortization---slightly higher than those of average physical retailers.

Contrasting what's happening in China is the online retail in the US, Europe, and Japan. There, the dominant model involves a more even combination of brick-and-mortar retailers (such as Best Buy, Carrefour, Darty, Dixons, and Wal-mart) and online merchants (such as Amazon and eBay), which run their own sites and handle the details of commerce.

With this kind of explosive growth, China's e-tail business is poised for continued exponential increases. The biggest challenge the megasites will face will be staffing. China is already having serious shortages of skilled personnel. US companies with the right products have an extraordinary marketing opportunity.


© Copyright 1998- by The Herman Group, Inc. -- reproduction for publication is encouraged, with the following attribution: From "The Herman Trend Alert," by Joyce Gioia, Strategic Business Futurist. 336-210-3548 or https://hermangroup.com. To sign up, visit https://HermanTrendAlert.com. The Herman Trend Alert is a trademark of The Herman Group, Inc."

HOW DOES SHE DO IT?
Our author Joyce gets quoted in TIME Magazine and other national media on a regular basis. You can, too! Sign up for ExpertClick.com. You will be found by the news media and in Google search: 1. Through your personal search-engine-optimized press room by 39 topics you choose; 2. By news releases pushed out 10 ways including Google News; 3. Be found in the 2020 printed Yearbook of Experts, Authorities & Spokespersons. Save 15% when you register by October 31st @ http://www.ExpertClick.com/Discount.

APF'S FUTURES FESTIVAL IN 3 DAYS: ONLINE OCTOBER 24TH: FULL SPECTRUM FUTURES
The Association of Professional Futurists proudly presents its annual online learning experiences on Full Spectrum Futures. Network with leading futurists from all over the world. And best of all, it's free to attend, though contributions are encouraged to help defray costs. For more information, visit here.

OUR VERSATILE TRANSLATOR ROCKS!
Excellent translation services from English, French, or German into Spanish. Especially well-versed in medicine/pharma and automobile industries. 5-year Bachelor Degree in Translation. Also editing and proofreading of all kinds of Spanish language documents. Flexible rates, depending on number of words, degree of difficulty/technicality, and turnaround. For an instant quote email Mariana Campora Lesti at marianalesti515@gmail.com or contact her on SKYPE at marianacampora.

To read this Herman Trend Alert on the web: https://hermangroup.com/alert/archive_10-21-2020.html.


Herman Trend Alerts are produced by the Herman Group, strategic business futurists, Certified Management Consultants, authors, and professional speakers.

New subscribers are always welcome. There is no charge for this public service. The Herman Trend Alert is read by over 30,000 people in 90 countries, including other websites and printed periodicals. Click here to sign up for the Herman Trend Alert.

Do you enjoy receiving this weekly e-mail update? Contact us about our co-branded Herman Trend Alert service.


Subscribe or Unsubscribe to weekly Herman Trend Alert
View this week's Herman Trend Alert
Archived Weekly Herman Trend Alerts

                                                                                                                                                                                                                                                                                                                                                                         


[ Home About Products Resources Media ]

 

7112 Viridian Lane
Austin, TX 78739
Voice: 336-210-3548
Toll Free in US & Canada: 800-227-3566
E-mail: info@hermangroup.com


  © The Herman Group. All rights reserved.

Web site design by WebEditor Design Services, Inc.