Businesses Plug Into China’s Love Of Online Shopping

By Janet I. Tu
The Seattle Times.

SHANGHAI

When 24-year-old Elina Meng got engaged, she knew the type of ring she wanted. She just couldn’t find it easily.

She wanted an Asscher-cut diamond — a square cut with cropped corners — but there weren’t many choices in her price range among Shanghai retailers.

Turning to the Internet, she found Blue Nile, the Seattle-based online jewelry retailer. After visiting the Blue Nile booth at a wedding expo in Shanghai in 2014, Meng ordered a 1.1 karat engagement ring. Two weeks later, she had her ring.

Meng, who works in the finance industry, was initially hesitant about ordering such an important item online. “But I felt because it’s a foreign company, it could be trusted more,” she said.

That greater level of trust in non-Chinese companies is one of the things working to the advantage of American companies such as Northwest Cherry Growers and Costco, as they dip their toes into the waters of e-commerce in China. By taking small steps, they are learning about what appeals to Chinese consumers and what marketing tactics work.

In recent years, online retail has boomed in China, becoming the world’s largest e-commerce market.

Fueled by a fast-growing middle class, China racked up $295 billion in online retail sales in 2013 — about 7 to 8 percent of the country’s overall retail sales that year, according to a report from consulting company McKinsey & Co. The United States, by comparison, tallied $270 billion in e-commerce sales — about 6 percent of overall retail sales.

The Chinese e-commerce boom is also helped by the country’s relative lack of a brick-and-mortar retail infrastructure and a rapid rise in mobile phones, which many Chinese use to do their shopping.

By 2020, China’s e-commerce market is expected to be larger than those of the U.S., Britain, Japan, Germany and France combined, according to a report from advisory firm KPMG.

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