In China second hand is the latest in thing. Perceptions of greater acceptance for gently used goods is reflected in investors’ enthusiasm for the many start-ups that are now aiming to become the premier national platforms for used goods, ranging from cars to phones, to luxury items and even Han dynasty antiques. Diverse as these markets are, they are all reputation-based businesses where success requires mechanisms to guard against users trying to pass off bad goods as good-as-new. So what is fuelling the growth of second hand markets in China? And how are sellers dealing with the critical issue of creating and maintaining consumer trust?
Alibaba, China’s largest e-commerce firm, recently smashed global records for its ‘Single’s Day’ promotion on 11th November 2015, selling $14.3 billion worth of merchandise in just 24 hours. This is the equivalent to 120,000 orders placed every minute, covering both online spaces such as Taobao and Tmall as well as 180,000 brick and mortar sites across 330 cities in China. The numbers are staggering, but they also show a problem with the sheer scale of selling—how to ensure the quality and authenticity, of goods. Alibaba is now tightening the screws on fake goods being sold on its platforms, but can it stay one step ahead of counterfeiters?
Luxury brands have never had it this bad in China. For most of them, China is no longer the cash cow it once was. Multiple reports suggest that the luxury retail business in China is shrinking. The top 10 global luxury brands as per Millward Brown’s latest BrandZ report—a list that includes names like Louis Vuitton, Hermes, Gucci and Chanel—saw 6% of their total brand valuation evaporate in 2015, and China is partly to be blamed. Already the likes of Louis Vuitton, Armani, Prada and Chanel have started shuttering stores in China. But all is not lost and luxury can still make a comeback in China.
Tencent has used WeChat to create a mobile ecosystem for China, which has more smartphone than PC users. By steadily integrating value-added services into a social media app, Tencent has made it increasingly useful to both consumers and businesses. That means WeChat has more opportunities than other messaging apps to make money. In contrast to Facebook, which earns most of its revenue from advertising, WeChat monetizes by integrating online payment functions that encourage shopping through the app and selling games. In the second quarter, Tencent recorded RMB 4.5 billion in revenue from games purchased through WeChat and its older instant messaging app QQ, up 11% year-on-year.
This year Alibaba broke all records on Singles Day with sales of $14.3 billion. Singles Day, or China’s Black Friday, was first invented by Alibaba in 2009. The idea was to create an annual sales event with crazy discounts supposedly for those who are single. (The fact that everyone, irrespective of their romantic status, jumped in and shopped is a different matter altogether.) This year a whopping 95 million users joined the cyber shopping fest. In other words, approximately almost one out of eight people in the world clicked the “buy” button on Alibaba’s marketplaces. What did it take to pull this off?
With companies like Baidu, Alibaba and Tencent branching out into new areas, China is witnessing the rise of a new breed of digital conglomerates.
From stats on online gaming revenues to tier-one home sales, the China data you need to know. Anyone travelling by subway in China will notice one thing: nearly everyone is busy with their smartphone. For some it is social media and for others it is games. It’s no wonder then that online gaming is soaring in popularity. […]
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Mobile wallets are taking off in China but it is too early to say what they mean for the use of cash and bank cards.
During his whistle-stop trip to the US, Alibaba founder and Executive Chairman Jack Ma is busy courting small businesses