Related News
Titans battle for online mall revenue
By Ding Yining |
November 15, 2011, Tuesday
|
Print Edition
Print Edition
THE online shopping sector is moving from individual retailing to department store-style sites that bring together large numbers of vendors on one platform.
The result is a battle of Titans that includes Taobao, Tencent and Amazon's arm in China.
In September, Taobao Mall, an arm of the Alibaba Group, introduced 38 domestic independent online retailers, including department store Yihaodian.com and consumer electronics retailer 51buy.com, to its shopping platform.
Taobao said it expects revenues from the site to hit 200 billion yuan (US$31.25 billion) next year, more than double from this year's 100 billion yuan. The company, often called China's eBay, also said it would provide logistics services for third-party e-commerce providers.
"Independent retailers will see their sales rise from the huge user base provided by Taobao Mall," said Liu Guanwu, chief analyst at Analysys International's capital markets division.
Taobao Mall, launched in 2008, currently hosts more than 50,000 merchants selling more than 70,000 brands of merchandise.
In the third quarter, China's business-to-consumer online retail market more than doubled from a year ago to 62.1 billion yuan, according to Analysys International. Taobao Mall has 35.5 percent share of the B2C market.
Consultancy firm Rolan Berger predicted in a recent research report that the market will grow at an annual average rate of about 47 percent in the next few years, reaching 770 billion yuan in 2014.
Last month, Tencent, China's largest Internet company by sales, launched a trial service called buy.qq.com. The platform is different from its commerce-to-commerce site Paipai and its consumer site mall QQ Mall.
The trial service, with six online vendors in six different product categories, started operating in south China's Guangdong Province, offering consumer electronics, shoes, jewelry and other goods.
Tencent is offering stricter quality control over products and feeding customers from the large user base of its popular instant messaging service QQ to the new site.
"We have discovered that users want better service and guaranteed quality products at a good price," said Tencent senior vice president Wu Xiaoguang.
"We hope smaller vendors won't need to use price wars to fight for customers but instead will rely on better service and products to sell their goods."
During the trial operation, Tencent is working closely with partners to insure that goods bought on the new site will be delivered within 10 hours. The company said it will invest up to 600 million yuan in marketing to promote the new site among its 700 million active QQ instant messaging users.
"By allowing only one vendor in each product category to enter the shopping platform, Tencent makes it easier for consumers to shop, unlike Taobao Mall, where competing vendors sell similar products at varying prices," Credit Suisse wrote in a recent research report.
Amazon is a relative late-comer to the battle.
It officially opened its China marketplace to outside vendors in July after operating on a trial basis for eight months.
At the beginning, it introduced watches and jewelry, clothes and home appliances, categories that are easier to classify.
"Third-party vendors now contribute to 30 percent of our overall sales in China among some of the categories," said Wang Hanhua, president of Amazon China. "Our logistics and inventory management platform will help smaller vendors."
Last month Amazon opened an operation center in the city of Kunshan in Jiangsu Province, which borders Shanghai. Part of the center's operations will be allocated to serve smaller vendors.
"Opening up platforms to more vendors is a natural trend that will allow users to choose from a wider product range," said iResearch analyst Su Huiyan. "Delivering goods using Amazon's logistics system will give consumers a better shopping experience."
Analysys International's Liu Guanwu said the battle in the B2C market will be a fight for a better integrated platform in the future, and smaller B2C vendors will benefit from this new trend by making their name known by the large user base of Taobao and Tencent without spending large amount of marketing money.
The three main combatants have adopted different revenue systems. Taobao Mall charges third-party vendors an annual membership fee on top of commission fees. Amazon China and Tencent charge only commission fees based on the actual transaction volume.
As for independent B2C websites, they have to choose carefully which partner to work with in order to find their target and loyal customers.
The result is a battle of Titans that includes Taobao, Tencent and Amazon's arm in China.
In September, Taobao Mall, an arm of the Alibaba Group, introduced 38 domestic independent online retailers, including department store Yihaodian.com and consumer electronics retailer 51buy.com, to its shopping platform.
Taobao said it expects revenues from the site to hit 200 billion yuan (US$31.25 billion) next year, more than double from this year's 100 billion yuan. The company, often called China's eBay, also said it would provide logistics services for third-party e-commerce providers.
"Independent retailers will see their sales rise from the huge user base provided by Taobao Mall," said Liu Guanwu, chief analyst at Analysys International's capital markets division.
Taobao Mall, launched in 2008, currently hosts more than 50,000 merchants selling more than 70,000 brands of merchandise.
In the third quarter, China's business-to-consumer online retail market more than doubled from a year ago to 62.1 billion yuan, according to Analysys International. Taobao Mall has 35.5 percent share of the B2C market.
Consultancy firm Rolan Berger predicted in a recent research report that the market will grow at an annual average rate of about 47 percent in the next few years, reaching 770 billion yuan in 2014.
Last month, Tencent, China's largest Internet company by sales, launched a trial service called buy.qq.com. The platform is different from its commerce-to-commerce site Paipai and its consumer site mall QQ Mall.
The trial service, with six online vendors in six different product categories, started operating in south China's Guangdong Province, offering consumer electronics, shoes, jewelry and other goods.
Tencent is offering stricter quality control over products and feeding customers from the large user base of its popular instant messaging service QQ to the new site.
"We have discovered that users want better service and guaranteed quality products at a good price," said Tencent senior vice president Wu Xiaoguang.
"We hope smaller vendors won't need to use price wars to fight for customers but instead will rely on better service and products to sell their goods."
During the trial operation, Tencent is working closely with partners to insure that goods bought on the new site will be delivered within 10 hours. The company said it will invest up to 600 million yuan in marketing to promote the new site among its 700 million active QQ instant messaging users.
"By allowing only one vendor in each product category to enter the shopping platform, Tencent makes it easier for consumers to shop, unlike Taobao Mall, where competing vendors sell similar products at varying prices," Credit Suisse wrote in a recent research report.
Amazon is a relative late-comer to the battle.
It officially opened its China marketplace to outside vendors in July after operating on a trial basis for eight months.
At the beginning, it introduced watches and jewelry, clothes and home appliances, categories that are easier to classify.
"Third-party vendors now contribute to 30 percent of our overall sales in China among some of the categories," said Wang Hanhua, president of Amazon China. "Our logistics and inventory management platform will help smaller vendors."
Last month Amazon opened an operation center in the city of Kunshan in Jiangsu Province, which borders Shanghai. Part of the center's operations will be allocated to serve smaller vendors.
"Opening up platforms to more vendors is a natural trend that will allow users to choose from a wider product range," said iResearch analyst Su Huiyan. "Delivering goods using Amazon's logistics system will give consumers a better shopping experience."
Analysys International's Liu Guanwu said the battle in the B2C market will be a fight for a better integrated platform in the future, and smaller B2C vendors will benefit from this new trend by making their name known by the large user base of Taobao and Tencent without spending large amount of marketing money.
The three main combatants have adopted different revenue systems. Taobao Mall charges third-party vendors an annual membership fee on top of commission fees. Amazon China and Tencent charge only commission fees based on the actual transaction volume.
As for independent B2C websites, they have to choose carefully which partner to work with in order to find their target and loyal customers.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
