Digital Strategy & Innovation

300 Alfa Romeo cars sold on Alibaba and the development of ecommerce in China

“Over 300 Alfa Romeo cars sold in 33 seconds on Alibaba, more than 100 Maseratis sold in 18 seconds”. The news of such high impact figures represent an exceptional advertisement for eCommerce in China, corroborating the opportunity offered by online commerce to reach this market. They must, however, be contextualized, to avoid confusing an “exception” with the “rule”.

In China, the online channel is already a consolidated reality: eCommerce in 2016 totalled over 700 billion euros with a 15% penetration rate on overall retail sales. And growing! The increase compared to 2015 amounts to 140 billion euros, and with the expectation of an even greater increase in 2017. This is therefore the channel that non-Chinese companies should take into consideration to develop their market presence, even for types of products (such as cars) that are not typically considered suitable for online sale. eCommerce has become part of Chinese customs, so much that seeing/touching the product first hand is not such an important aspect of purchasing.

However, these figures, though very impressive, must be contextualised. “Record sales” almost always coincide with very special occasions: in this case the Tmall Super Brand Day (typically known as the Singles Day). They are peak moments, a sort of buying celebration with highly aggressive marketing campaigns during which prestigious products are sold in limited quantities and at much lower prices, based on the well-known flash sale principle aimed at triggering impulse buying.

eCommerce, in short, provides a key access to the Chinese market, but must be interpreted according to the culture and customs of local consumers, both extremely different from the Western world’s, with some peculiarities to hold firmly in mind.

The first is the purchase goal. In many cases shopping is not the consequence of an actual necessity, it stems from the need for entertainment/recreation (it’s no coincidence that the sharpest volume increases happen around big events/festivities/holidays). Great attention must be given to prices, then, that must be very convenient to make the “treasure hunt” (Taobao) appealing to Chinese consumers.

The second is the marked propensity to multichannel, particularly through mobile (which, in itself, is worth 70% of Chinese eCommerce). Being on many channels both online and offline is also a way of being more recognizable and attracting more traffic without disappearing among the hundreds of thousands brands present on every single platform.

The third consists of relationships, extremely important to increment the effectiveness of an eCommerce initiative in China. Also in this case smartphones are a fundamental support channel: asking the store owner for information via chat (rarely via email) is essential to establish a trusting relationship necessary to transform a visit into a purchase. Therefore, customer service dedicated to the online store is an absolute must.

Riccardo Mangiaracina

Riccardo Mangiaracina

Director of the Export Observatory
Riccardo Mangiaracina

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