RetailTechNews’ weekly roundup brings you up-to-date research findings from around the world. In this week’s edition: China to Surpass U.S. in Total Retail Sales; Gen Z Living Online; and Establishing Yourself on Amazon
China to Surpass U.S. in Total Retail Sales
China is poised to become the world’s top retail market in 2019, displacing the U.S. China’s retail sales this year will surpass that of the U.S. by more than USD$100bn (£76.38bn), according to eMarketer’s latest worldwide retail and e-commerce forecast.
This year, China’s total retail sales will grow 7.5% to reach USD$5.64tn (£4.3tn). For comparison, U.S. retail sales will grow 3.3% to reach USD$5.53tn (£4.22tn). Growth rates are slowing for both countries, but China’s growth rate will exceed that of the U.S. through 2022.
E-commerce is a major driver of China’s retail economy, with sales growing more than 30% in 2019 to reach USD$1.99tn (£1.52tn). That means 35.3% of China’s retail sales occur online, by far the highest rate in the world. The U.S. lags far behind, with e-commerce on track to represent 10.9% of its retail sales. China surpassed the U.S. in e-commerce sales in 2013.
By the end of this year, China will have 55.8% of all online retail sales globally, with that figure expected to exceed 63% by 2022. The U.S.’s share of the global e-commerce market is expected to drop to 15% by 2022.
Alibaba will lead e-commerce sales in China with a 53.3% share. Its share has been steadily declining for the past several years, as smaller players chip away at the e-commerce giant’s dominance. In particular, social commerce platform Pinduoduo has seen triple-digit growth since 2016, although its share remains small.
Gen Z Living Online
Gen Z is fuelled by technology in all facets of their life, and expect the internet to connect them, entertain them, sell to them, and build their digital brand, finds a report by WP Engine.
According the study, Gen Z continues to be the most internet-dependent generation – 61% of Gen Z can’t comfortably go more than four hours without the internet, while 13% of Baby Boomers can go a week or more. Gen Z, which has never known a world without the internet, not only expects 24/7 digital access, but expects that within five years everything – clocks, refrigerators, vacuums, dishwashers, and other appliances – will be connected online.
Gen Z has grown up in the hyper-personalised world of targeted advertisements and social platforms. As a result, they are willing to trade privacy for personalised experiences – 38% will provide their personal data to enable a more personalised experience over an anonymous one. Additionally, 40% of Gen Z would stop visiting a website if it didn’t anticipate what they needed, liked, or wanted.
When asked if an online-only company was less trustworthy than a solely brick-and-mortar business, 61% of Gen Z say no. Despite Gen Z’s eagerness to access the web using new methods and different devices, they still show a clear preference for a company’s website over a mobile app when making purchases. This fact held true across all generations, with Baby Boomers leading the pack at 93%, followed by Gen X (89%), Millennials (71%), and Gen Z (69%).
Establishing Yourself on Amazon
In a survey of 500 U.S. brands, more than half (54%) are currently selling on Amazon, finds a report by Feedvisor. Across the respondent base, which ranged from new to established, recognisable brands, Amazon was viewed as critical to their business model and a tremendous opportunity for growth.
The survey also shows that nearly three-quarters (72%) of brands will sell on Amazon within the next five years. This number demonstrates that brands are aware of Amazon’s burgeoning growth across various business sectors such as advertising, grocery, and health care. Amazon’s consistent growth cannot be ignored and, as a result, brands need to get ahead to control their brand perception and product visibility both in the marketplace and first-party settings.
Almost all brands, including those that have yet to join the marketplace, agree that there is a significant opportunity to build or grow their customer base through the Amazon platform. The survey revealed that 97% of brands on Amazon and 84% of brands not currently on Amazon concur that the most compelling benefit to selling on the vast platform is acquiring new customers.
Of brands not yet selling on Amazon, one-third (33%) said their primary motivation to join the marketplace would be new customer acquisition as a means of diversifying their revenue streams.