E-commerce development in China is continuing

May, 2014

Online commerce is consolidating its leading role in commercial transactions in China. According to a study of China 's E-commerce Research Center, last year sales reached 1,320 billion yuan and the estimates of the Ministry of Commerce of China predict that they will reach 1.8 trillion yuan by the end of the year. It is, therefore, a phenomenon extremely interesting for foreign actors who want to face this market.

The market for online business transactions is increasingly, posing itself as a sector with high potential. The number of Chinese Internet users, which amount to about 500 million, is expected to still growing as a result of government subsidies paid for access to broadband and high speed internet. At present, more than 240 million Chinese are choosing online shopping: it is a market where they are sold, on average, 48 000 products per minute . The success of the online sales channel is also due to the impulse which it gave to the 12th Five-Year Plan (2011-2015) which, among other things, encouraged the spread of new technologies in the fields of information technology and telecommunications. Among the reasons for the acceptance of online shopping, in particular, the exclusivity due to the opportunity to buy products not yet available in traditional retail stores, the efficiency of the logistics network and the final prices lower than that ones on a direct retail purchase. The potential of this market becomes extremely attractive for foreign companies. For the Made in Italy in particular, fashion, food and decor could be the sectors to achieve more success through online platforms. According to the data of the EU SME Centre - the institute that supports the business activities of small and medium-sized European companies wanting to enter the Chinese market - by 2015 there will be 750 million users of internet in the Dragon, which today is the most important market in the world for online commerce (www.agichina24.it).
“Do not jump into the Chinese market means losing part of a flow of exports which in the future will become essential. The cost to get into it is not so high”.

Roberto Liscia

President at NetComm

Alongside the opportunity it should not, however, miss a careful assessment of the risks that may accompany this form of selling, primarily related to the protection of intellectual property rights and the so-called parallel imports. From the regulatory point of view, moreover, there are still considerable restrictions on the access of foreign players in the market; however, if the foreign company has a trading company that sells its own products, it can also use the online channel, through a site that allows, at least theoretically , to manage it directly.