MILAN, May 29 (Class Editori) -- In China export opportunities are everywhere. The densely populated country, along with the growth in purchasing power and of the amount of new rich people are hot topics. Yet today at the Netcomm Forum, the main e-commerce event in Italy, it will be explained how even the so-called third and fourth tier cities, those with a lower purchasing power and education level, are seen by brands as a source to be exploited. In the larger centers, in fact, the big names of the web are dominating the scene, making it easier for brands to make their way, especially by exploiting platforms that play on different targets.
The data on China will be presented in Milan at Netcomm China, a brand new venue of the Netcomm Forum, by senior partner of Netcomm Services Giulio Finzi. The population of Chinese cities reaches 793 million people and it is estimated that by 2030 there will be 350 million people moving to urban centers. In 2018 the cities with 1 million inhabitants were 260. This represents an extraordinary starting point for e-commerce. Online shoppers are 180 million in the US and 300 million in Europe, whereas in China the total is of 600 million.
The value of B2C e-commerce sales in the country amounted to 681.9 billion euros in 2018. According a B2C Netcomm Politecnico di Milano e-commerce observatory, Italy manages to sell 5% of its export via e-commerce in China, which reached a total of 2.6 billion in 2018. The share will be expanded, since China is still the best market for digital exports thanks to the relationship between the new rich people - expected to reach around 70 million in 2021 - and the attractiveness of e-commerce.
In this framework, there is the possibility of targeting also consumers with lower purchasing power and educational levels who are yet very literate when it comes to online shopping. 36.5% of internet users come from 130 cities of third and fourth tier, out of a population of around 160 million inhabitants. The percentage is consistently growing thanks to mobile internet connections.
"The well-known tech giants have monopolized the market of first and second tier cities, but it is in the third tiers that people have recently begun to afford luxury products and, in these cities, the positioning of large brands is less consolidated," explained managing director of Intarget Shanghai Stefano Generali, a branch of the company headed by Nicola Tanzini, who deals with marketing and advertising."The risk for many Western brands may indeed be to consider only the most well-known e-commerce platforms, but which are also the most demanding because for many product categories they have reached a saturation level and therefore, in addition to the huge initial investments, require an equally huge investment in marketing. Those who choose to explore new e-commerce platforms will find, instead, important opportunities."
Intarget mentions in particular three platforms with which brands can address this new audience. Pinduoduo from Tencent, for example, integrates social components into the online shopping process. To do so, the brand makes use of group purchases, created on WeChat or QQ, through which users can invite their contacts to form a shopping team to get lower prices. Pinduoduo acquires new users at a very low cost, through coupons, lotteries and free products therefore has become the e-commerce platform with the largest base of consumers without any degree. 83% of users spend on average a maximum of 1,000 renminbi (130 euros) a month on e-commerce platforms.
Among the list there is also the Kaola e-commerce platform from NetEase, with over 5 thousand brands from 80 countries offering integrated solutions to foreign brands. Last but not least, there is Taobao from Alibaba, which uses live streaming that allows sellers to propose products also through direct online video. Each brand can use one or more platforms depending on its position.
"According to Penguin Intelligence, Tencent's internet research institute, between 2016 and 2018, the number of Internet users under 10 years old has grown by 27.6% and the number of Internet users over 60 years old has grown by 44.6%," concludes Generali. 378 million mobile users hold a middle school licence or not even that. This is the catchment area in which the players of the e-commerce sector are preparing to make their entry. Today 36.5% of users who access the internet come from third or fourth tier cities. These segments of the population have reduced purchasing power but operators have created solutions able to include them in the e-commerce market."
(Source:Class Editori)
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