6. How to face and deal with these problems for current Chinese e-commerce statement

From the last five posts, I analyzed and think over about some reasons and solutions from aspects of the consumers, China's evironment, Culture to deal with this problems in China's E-commerce market. I divided  them into four parts which are individual, product guarantee, customer loyalty, and traffic congestion. 

Individual factors: as the results and analysis above, the main reason of the old people who are not willing to online food shopping is lack of Internet knowledge and operation usage of online banking. Therefore improve Internet skills and usage of computer understanding could promote more customers especially the old people who desire shopping online. Eun Young and Youn-kyung (2004) stated that the increasing number of computer- trained consumers has contributed to the extraordinary growth of Internet shopping. Furthermore, Liao and Cheung (2001) identify that consumers with experience in the use of personal computers tend to prefer online shopping. Moreover, the government could provide a series of computer skills trains for old people, to improve the number of computer-trained people. In order to let more people intend to shop online. 

Product guarantee:  
Koyuncu and Bhattacharya (2004) explained that consumers will reduce their orders fro online retailers with the Internet if they cannot receive their orders from online retailers with the guaranteed time. That means some online retailers should give rules of products guarantee provided for consumer. Thus increasing the level of trust between the merchants and consumer. For example, 'Happy to refund and exchange products with 7 days'.

Customer loyalty: As mentioned above, the customer loyalty is a serious problem in china’s online shopping market. We should know that the customer loyalty is base if merchant would like to maintain well relationship with customers for long term and improve reputation of online retail. And some illegal online retailers, The governments should issue out some law in terms of e-commercial IPR (intellectual property protection) and transaction rules to protect  rights of merchants and consumers

Traffic congestion: As we know, The traffic congestion is a serious problem in China.This problem can delay the time of home delivery from store to each customers' house. Therefore, "The government has worked hard to create public transaction infrastructure that takes pressure off cities’s roads. Nearly every major city in China is building or expanding a subway system, and the prices of these systems are often subsidized to make them extremely enticing."(Custor,n.d) 


All in all, using of intervention could be a good way to reduce adverse influencing. However, we should conscious that this phenomenon is a kind of Chinese traditional symbol which is difficult to change. Brasher(2009)and shih (2004) argued that there is a big difference between developed and developing countries on  how consumers perceive online shopping.Sometimes when we found and decide to deal with problems in Chinese online shopping market, also we should respect and protect this traditional shopping custom at the same time. 

Reference: 

• Custor.C, N.D, China's traffic trouble. [Online] Avialable at: <http://chineseculture.about.com/od/businesseconomy/a/Chinas-Traffic-Troubles.htm> [Accessed 3rd March 2016]. 

• Eun Young,k., Youn-Kyung,K., 2004. Predicting online purchase intentions for clothing products.[e-journal] European jounal of marketing 38(7),883.Available through: Anglia Ruskin University Library website <http://libweb.anglia.ac.uk> [Accessed 1st March 2016].

• Liao,T.F.,Cheung, M.T., 2001. Internet -based e-shopping and consumer attitudes:an empirical study.  [e-journal] information & managment 38(5), 299-306. Available through: Anglia Ruskin University Library website <http://www.sciencedirect.com/science/journal/03787206> [Accessed 1st March 2016].

• Koyuncu,C.,Bhattacharva, G., 2004.The impacts of quickness, price, payment risk, and delivery issues on-line shopping. [e-journal] Journal of retail & distribution managment 33 (2). 161-176. Available through: Anglia Ruskin University Library website <http://www.sciencedirect.com/science/article/pii/S1053535703001136> [Accessed 1st March 2016].
• Brashear et al., 2009; Shih, 2004, An empirical analysis of online shopping adoption in Beijing, China. [Online] Available at: [ https://www.deepdyve.com/lp/elsevier/an-empirical-analysis-of-online-shopping-adoption-in-beijing-china-5WlQtyNYr3 ] [Accessed 24th  April  2016]

5. Problems with grocery online shopping market in China

After analysing China's e-commerce market stituation and the comparison of UK's typical online grocery retailers and China's. In this post, I am going to talk about what the main problems on China's grocery online shopping market. 

Despite great achievement and the rapid growth of Chinese e-commerce market, even some Chinese e-commerce companies have strongly competitiveness in the world. Thus, Grocery online shopping market is still barriers in the China’s market. Even if you shop in the Alibaba.com, or JD.com, rarely find fresh food grocery market online. The Chinese ecommerce called the online food shopping market as the lasted ocean. Therefore, Chinese customer online food shopping activities not adopting in the Chinese e-commerce market yet. 

	Western	China
Customer individual	Better internet knowledge	Lack of internet knowledge
Customer Relationship	High level of loyalty	Lack of customer loyalty
Product counterfeit	Less	More
Delivery	Delivery on time	Lack of advanced logistics information system and services
Price value	Suitable	High delivery fee

Compare China’s online shopping market with western countries

We can clearly see what the difference of Online shopping between the UK and China through the above table. Obviously,first one is about value of price problem. The poor development of logistics leading to high price on product in China’s online shopping market. Due to China haven’t a series of advanced logistics system. The online retailer usually corporates with the third part logistic company to delivery product rather than implement own logistics Company. Therefore the online retailer only improve delivery fee to make up its high logistic cost. Therefore most of Chinese online retailers are not able to provide more discounts for products, especially fresh food categories which need high quality of delivery. As we known purchasing total price would be added delivery cost automatically by online payment system when you pay for orders online. However, scale of prices is very sensitive for customers, and Chinese customer always hope the online retailer could cover the delivery cost to attain the lowest price. Reibstein (2002) considers that in the context of online shopping, a low price may also attract price sensitive customers. So that if online total cost which includes high delivery cost which exceed much purchase. That means customers have less incentive to shop online.

Secondly, traffic issue is a serious problem in china.“China’s capital, Beijing, has been notorious for serious traffic congestion for so long that netizens call it “Shoudu” - capital of traffic jams.”(Hong, 2013). We could image that if just need one hour delivery time, but the deliverer take three hours on the road actually due to traffic jam. So that goods could not be delivered on time and might be affect the fresh food quality which depending on temperature and space. If deliverers can’t deliver products obeys delivery schedule on time which could decrease business reputation. Also Customer might feel unsatisfied and worry whether the long-time influencing quality of product and. Moreover, the customer probably don’t purchase online in the next time.

Thirdly, trust and loyalty and they are more important than two point above. The price fight is common phenomenon in china’s market. Some illegal online retailers want to attract more customers, they imitated product pictures from other famous companies or directly copy the famous company’s brand as their brand, but they use low materials which produced by low cost manufacturers to have lower price advantage. When the online buyers see similar or same pictures of products are sold with large price gap between the two companies. They prefer to go for the cheaper online retailer, but the high prices product produced by original manufacturers. This is also fraudulent business operation, they utilized e-commerce virtual environment to give customers counterfeit products. That will lose customer loyalty in the future. And that will have adverse influencing to Chinese online shopping market. 

Fourth, The individuals values and shopping intention  probably  also as important factors of influencing Chinese customers’ online food shopping intention and behaviours. As we can view from the right side picture, it demonstrates that the component of cultures. 

(The Component of Culture in Marketing)

In my opinion, for online grocery home shopping,values and attitydes, education, adoption of techology, social organization and politicak discourse are main facors. The reasons of Chinese online grocery market behind Western countries and U.S is that there is a huge gap between China's shopping behaviours and Western countries or U.S. Also the online shopping just was operated in China in 1998 by Jack Ma. Althrough the more and more Chinese have adjusted to shopping online, the definition of food e-commerce was accepted by Chinese with a short time. Thus most of Chinese especially old people or lower educational people might not adopt to shop food online, even online shopping. CNNIC’s consistently demonstrated （2014）that Chinese internet users are less involved in e-commerce activities such as online shopping and payment, compared to their use of the internet as a tool for entertainment, communication and information. For example, almost all of Chinese can use WeChat or Facebook to communicate and transfer information.Main reason is customer resources, for example lack of internet understanding and lack of online banking’s knowledge. Moreover, the increasing number of people who are able to use online resource (Computer-trained consumers) which is contributed to growth of online shopping. Li et al (1999) stats that consumers’ internet knowledge provides positive impaction for consumers’ online shopping intention and adoption.

And the next post, I will give some solutions and come up with some advices to face and deal with these cultures issues and problems as well. 

Reference：

• CNNIC, 2014, Statistical report on internet development in china. [Pdf] China internet network information center. Available at: [http://www1.cnnic.cn/IDR/ReportDownloads/201404/U020140417607531610855.pdf ] [Accesses 29^th February].

• Hong.Z, 2013, Beijing still struggling to deal with traffic congestion. [Online] Available at: [http://www.scmp.com/news/china/article/1298559/beijing-still-struggling-deal-traffic-congestion ] [Accesses 28th February].

• Li,H.,Kuo.C.,Russel, M.G., 1999, The Impact of Perceived Channel Utilities, Shopping Orientations, and Demographics on the Consumer's Online Buying Behavior. [Online] Available at:[http://onlinelibrary.wiley.com/doi/10.1111/j.1083-6101.1999.tb00336.x/full][Accessed 29^th February].

• Radovic.A, 2014, E-commerce in china: Alibaba is just the beginning. [Online] Available at: [http://www.clickz.com/clickz/column/2373776/e-commerce-in-china-alibaba-is-just-the-beginning] [Accesses  1st March]. 

4. Analysing successful factors of grocery home shopping in UK

After understanding what current state and development of China's e-commerce market. In order to acknowledge what factors adverse China's grocery online shopping, it is important that analysing successful factors of grocery home shopping with typical grocery retailers in UK. With comparison between UK and China, I will easily find the difference and problems. And before that, the following intresting vedio can show how Chinese people shopping in the China's supermarket or retailer and what is local Chinese supermarket look like?

(Chinese supermarket in China)

In UK, it is common phenomenon that consumers buying food in online grocery like Tesco famous grocery in daily life. UK Market Synopsis has been estimated (2009) that the online food market was worth £3.2 billion in 2008, and is growing by an average 4% every year.  Let's see the following BBC news reports vedio to understand current grocery online shopping market in UK. 

Tesco: Tesco is a famous food retail in UK and it also has own online retail market (Tesco.com， 2015). And Tesco.com was just established in 2000 with high speed to develop. “Company’s annual online sales exceeded $5 billion and Tesco.com is recognized as the world’s largest online grocery, with a customer base of little less than 1 million and more than 250,000 orders completed a week.”(Sumyla, 2011) The main reason is that Tesco provides a mature online grocery platform to bring lots of benefits for customer involved saving time, money and energy, due to it can reduce the transportation costs and staffs fee.

ASDA: it was founded in 1999, also has online food stores. “ASDA owned by US corporation Wal-Mart since 1999, is the only supermarket with the potential to become a thorn in the side for Tesco. Wal-Mart is the biggest food chain in the world and has annual sales eight times bigger than Tesco’s” (Sumyla, 2011). Certainly, not just only Tesco and ASDA two online food retailers successfully developed, Sainsbury’s or Otto group has advanced achievement in the world as well.

What successful factors enable to promote its sales growth every year? There are two aspects one being ‘the value price’ which involve both lower price and the quality of product and the second being “The principle is really very simple - nobody will sell the equivalent product of the same quality for less money. And further, we guarantee that if a customer can buy the same item cheaper from a competitor, within a three mile radius of their Tesco store, we will refund twice the difference and drop our price accordingly.”  (Tesco.com, 2015a). And also Tesco.com (2015b) states that we work closely with our suppliers to ensure that products are always of the highest quality and that they are delivered to our stores in the best possible condition. That means online retailer not only provide the lower prices for products, but also the business must give a good quality to their customers at the same time. If a customer purchases a product with a discount online, but the product is in bad quality when they receive it making the consumer lose trust. And one more thing is worth mentioning that Tesco always treats customer with high loyalty. In my opinion, loyalty is most important part of customer service, as it is a key to maintain business development. Therefore, the lower price with high quality could be positive influencing customer intention to purchase food online.

The second point is well -customer services. Customer service could cover many areas. Different business strategies are able to improve capacity of customer services. “Last year we held 115 customer question times where we met nearly 9,000 customers. Talking to customers and finding out what they expect from Tesco is vital to the continued growth of the business.” (Tesco.com, 2015c). Regard to technology as aspect of customer services, it has an advanced information system like club card membership. “We now have in place highly sophisticated computer systems with which we are able to analysis the information we receive through Club card.”(Tesco.com, 2015d). “Everything we do is aimed at encouraging our customers, new and old, to stay with us and maintain their loyalty” (Tesco.com, 2015e). These business strategy will immensely improve customer services, due to Tesco takes the aim of client groups face to different kinds of level of customer.And the following video can show how the Tesco grocery online shopping operate their market and customer services.

(Tesco online shopping launch & introduction, Source: Youtube)

The above two points might strongly enhance the online business competitiveness. Providing lower prices with high quality to attract more customers which providing much more discount for their customer by cutting the labour cost and transport cost to make up loss of discount. Tesco capture an important point which customers want to use club card to help them reduce budget. Vijayasarathy and jones (2000) find that savings in transaction costs that lead to better deals on price can positively influence consumers’ attitudes on the intention to shop online. And offer club cards to enlarge membership at the same time let customers stay with their business for long time. And the important is that Tesco maintain friendly relationship with each level of age for customers which enlarge consumer scope. Furthermore, they have advanced computer system and management of network to promote them to analyse information from their customers'feedback.

Reference:

• Sumyla.G, 2011, Tesco Case-study. [Online] Available at: [http://www.slideshare.net/vinuthna25/tesco-casestudy ] [Accesses 1^st February].

• Tesco, 2015, Tesco PLC, [Online] Available at: [http://www.tesco.com/investorInformation/report97/review/page5.html] [Accesses 16^th February].

• Vijayasarathy and jones, 2000, SHopping orientations, product types and internet shopping intentions. [Online ] Avilable at: [ http://aws.iwi.uni-leipzig.de/em/fileadmin/user_upload/doc/Issues/Volume_13/Issue_01/V13I1_Shopping_Orientations__Product_Types_and_Internet_Shopping_Intentions.pdf] [Accesses 29th February]

• BBC news Online food shopping what is a 'dark' supermarket, 2014, [Video] Youtobe. 

• Tesco online shopping launch & introduction, 2013, [Video] Tesco malaysia, Youtobe

3. Analysing China’s E-commerce market from data 2 --- Alibaba group

The Alibaba group was established in 1999. It is one of the world's premier e-commerce brands and the number one online marketplace for global and domestic China trade. Alibaba group provide an efficient, trusted platform connecting small and medium-sized buyers and suppliers from around the world. “Today the company and its related companies operate leading wholesale and retail online marketplaces as well as Internet-based businesses offering advertising and marketing services, electronic payment, cloud-based computing and network services and mobile solutions, among others”. (Alibaba.com, 2015)

(80% of Chinese online shopping dominated by Alibaba. Source: Youtobe)

The Alibaba established the first singles’ globe shopping festival is on 11^th November 2009, which is similar with Black Friday. Whole of goods will be more than 50% discount in T-mall and Taobao on that day. From the statistics given in the graph it can be seen that the online spending of China’s e-shopping festival grew rapidly form 2011 to 2014.  

(Chinese retailers bombared by 'Singles Day' shoppers. Source: Youtobe)

Reference:

• Alibaba Group, 2015, Sustainability. [Online] Available at: <http://www.alibabagroup.com/en/about/sustainability> [Accessed 15^th November, 2015]

• 80% of Chinese online shopping dominated by Alibaba. 2014 [Video] China:CCTVnews. Youtobe.

•  Chinese retailers bombared by 'Singles Day' shoppers.2015[Video] Youtobe.

2: Analysing China’s E-commerce market from data

Before talking about what marjor factors influncing Chinese fresh food online shopping market. I am going to give some details about current statement of China's e-commerce as the background.  

As we know, China is not country which found E-commerce, and also the definition of e-commerce was accepted by Chinese people which later than other western countries and U.S. But in the following figures show a series of data about the development of e-commerce in China which is composed of three aspects: online buyers, online shoppers and retail e-commerce sales. These figures illustrated that the rate of growth of China’s e-commerce market is faster than western countries where e-commerce originated in the recent years. Internet World stats, 2010 notes that by the end of June, 2010, internet users in china reached 420 million, a 9.36% increase from the end of 2009 and the number of user is predicted to increase during the next decade. As result of the growing ability of internet access, increasing quantities of Chinese customers are willing to use the internet to purchase variety of goods from many countries through online retails.

Online buyers in China, 2010-2016 eMarketer.com

As the right picture demonstrates that online buyers (millions) from 2010 to 2016. Chinese people become more intresting and enjoying with online shopping. the number pf online buyers on the mianland will rise to nearly 424 million in 2016. Moreover, eMarketer forecasted there will 423.4 million people in China. The fast growth rate in China's B2C ecommerce sales will be able to take its market far ahead of other contries. And according to eMarketr's forecast period data,  China can lead the globlal ecommerce growing .

We can see from the left two figtures, the first one shows that retail e-commerce sales and growth since 2008 to 2006. Obviously, quantities of China sales is just 20 Billion USD, dramatically raised up around five hundred Billion USD within 6years which increase about 25 times equally. In 2009, China year – on year growth rate reached the peak point 105.2%.

In the second figure, China online shopper penetration increased gradually from 2009. And in 2015, it reached top around 51.8%. The number of china online shoppers has occupied a half quantities of China internet users. It seems to me that the number of internet users are proportional to online shoppers and online buyers, because network provides merchants a potential market to be exploited without limited and buyers could find anything they want to buy. “Many traditional retailers are developing E-commerce platforms that are driving B2C online retailing market growth and attracting more consumer interest in purchasing products online” (zhu,2013). Due to a huge potential business chance in B2C market, a large proportion of traditional retailers have changed over their retail shop into e-commerce market in order to attain more profit. Therefore they prefer to pay more attention and expenses to their retail online. “Online shoppers have a very usable website and launch 50 new stock keeping units (SKU) every day and refresh all their products on a three-day cycle, hence their inventory is always fresh and exciting, which helps to draw in more interest from potential buyers”(Radovic, 2014).  

From the above staitis, we could know online shopping market in China has adequate online users and online shoppers. That means that Chinese people are interesting and familiar with geting sources from internet. Therefore there are some other reasons lead to food online shopping become a barrier in China's e-commerce. Shopping online for Chinese, Alibaba group company is playing an important role in China's e-commerce market. So  it is essential stage that analysing Alibaba group development. In the next post I will give Alibaba group  in detail. 

Reference:

• eMarketer, 2016, An evolving online shopping marketplace in China, [Online] Available at: [http://www.emarketer.com/] [Accessed 16th February 2016].  

• Internet World, 2016, internet usage stats and population report, [Online] Available at: [http://www.internetworldstats.com/asia/cn.htm] [Accessed 13th February].  

• Radovic.A, 2014, E-commerce in china: Alibaba is just the beginning. [Online] Available at: [http://www.clickz.com/clickz/column/2373776/e-commerce-in-china-alibaba-is-just-the-beginning] [Accessed 13^th February].

• Weijing.zhu, 2013, China's luxury e-commerce trends, [Online] Avaibable at: [http://www.theworldofchinese.com/2013/07/chinas-luxury-e-commerce-trend/] [Accessed 20th February]

1.Fresh food is a big barrier in online shopping market in China

  (Chinese people buy fresh food in market. Source: TimeOut Beijing)

As the rapid growth of online population in china, B2C market has become most popular in China. Indeed, since economic reforms and improved policy in the late 1970s, the Chinese e-commerce has a breakthrough achievement over the past three decades. “Recent data reveal that China had 87.88 million users on the Internet compared to 74 million the previous year” (CNNIC, 2009). 

When I first come to United Kingdom, I think out a question that when you want to buy some fresh meat and vegetables for cooking a meal, but there is nothing meat or vegetables in your refrigerator, will you prefer using online food shopping to purchase fresh food you like, or to go a retail store like the nearest supermarket by foot for ten minutes? Which one would you like to choose? However, there is a strange phenomenon that most of people who lived in China are not willing to purchase fresh food online, so that less online food retailers would like to sell fresh food online. Even there have not online fresh food online shopping service in some areas in China. On the contrary of that, I found that people who lived in UK are able to purchase fresh food from several online food retailers. For example, Tesco, ASDA, and Sainsbury.  And their orders will be delivered in their home on time. 

I think the culture issue is the main factor of influncing Chinese online shopping behaviours. Raven (2007) pointed that China’s cultural preference for face to face business interactions as well as regulatory issues as factors that may inhibit the development of online shopping.

In order to acknowledge a deep understanding of China’s e-commerce market statement and Chinese customer online food shopping behaviours and intention. Therefore, in the following posts, I will research online articles and journals which relate to China's e-commerce market and Chinese customer online shopping adoption to think over what factors influencing current Chinese online shopping market, how to face and deal with these issues. 

References:

• CNNIC Statistical Survey, 2009, Number of Mobile Phone Internet Users. [Image online]. Available at: [http: //www.renesas.eu/edge_ol/global/09/index.jsp ] [Accessed 19^th February 2016].

• China Internet Network Information Centre, 2013, Number of Online Shoppers in China 2009-2015E (in Millions). [Image online] Available at: [http: //www.tmogroup.asia/for-luxury-e-commerce-matters-3-facts-about-china-e-commerce/] [Accessed 6^th April 2015].

• Raven, P.V., Huang, X. and Kim, B.B., 2007, E-Business in Developing Countries: A Comparison of China and India. [E-journal] Available through: Anglia Ruskin University library website< http://libweb.anglia.ac.uk > [Accessed 19^th February 2016]