Executive Briefings

Japan and China Exhibit Highest E-Commerce Potential

Retailers looking to expand their business internationally might do well to consider selling online in China or Japan. Those two countries take first and second place, respectively, in a new index of the 30 best countries for online retailing from A.T. Kearney.

The consultancy's 2013 Global Retail E-Commerce Index ranks countries' attractiveness for online retail based on four factors: online market size, consumer behavior, infrastructure (including logistics and payments capabilities) and growth potential. The data come from market research providers Euromonitor, the International Telecommunications Union, the World Bank and the World Economic Forum.

With the world's largest population (1.36bn), most internet users (517m) and most online shoppers (220m), China is set to grow its annual $64bn e-commerce market to $271bn over the next five years, A.T. Kearney says. (The $64bn includes only sales from established brands, what Chinese analysts call business-to-consumer e-commerce, according to Parvaneh Nilforoushan, one of the study's co-authors. Counting so-called consumer-to-consumer online sales, including sales on Taobao, the eBay-like site that dominates online sales in China, e-retail sales in China amounted to $210bn in 2012, according to Bain Capital.)

Spurring those increased web sales are planned infrastructure improvements in the country, more widespread internet access, rising wealth among Chinese consumers and their increasing willingness to spend. Chinese shoppers are also highly social, with 80 percent of them reporting that they use social media to research products before buying and 66 percent saying they leave reviews after purchasing, the firm says.

Dominating e-retail in China today is Alibaba Holdings Group Ltd., which is number one in the Internet Retailer Asia 500 and operates online marketplaces Taobao and T-mall. E-marketplaces like those account for roughly half of e-commerce in China, A.T. Kearney says.

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The consultancy's 2013 Global Retail E-Commerce Index ranks countries' attractiveness for online retail based on four factors: online market size, consumer behavior, infrastructure (including logistics and payments capabilities) and growth potential. The data come from market research providers Euromonitor, the International Telecommunications Union, the World Bank and the World Economic Forum.

With the world's largest population (1.36bn), most internet users (517m) and most online shoppers (220m), China is set to grow its annual $64bn e-commerce market to $271bn over the next five years, A.T. Kearney says. (The $64bn includes only sales from established brands, what Chinese analysts call business-to-consumer e-commerce, according to Parvaneh Nilforoushan, one of the study's co-authors. Counting so-called consumer-to-consumer online sales, including sales on Taobao, the eBay-like site that dominates online sales in China, e-retail sales in China amounted to $210bn in 2012, according to Bain Capital.)

Spurring those increased web sales are planned infrastructure improvements in the country, more widespread internet access, rising wealth among Chinese consumers and their increasing willingness to spend. Chinese shoppers are also highly social, with 80 percent of them reporting that they use social media to research products before buying and 66 percent saying they leave reviews after purchasing, the firm says.

Dominating e-retail in China today is Alibaba Holdings Group Ltd., which is number one in the Internet Retailer Asia 500 and operates online marketplaces Taobao and T-mall. E-marketplaces like those account for roughly half of e-commerce in China, A.T. Kearney says.

Read Full Article