Other findings by the researchers at Fung Global Retail & Technology include differences between various sites from a brand and product selection perspective as well as how each of the top online shopping sites is positioned in the country.
Some of the key findings from ProsperChina’s data showed that Tmall and Taobao garnered the highest market share. Fifteen percent of respondents said they preferred to buy their apparel on Tmall while 11 percent chose Taobao.
FGRT estimates the total online apparel market in China to be about $142 billion, which is about double what the market saw in annual sales in 2013.
“Tmall is the largest business-to-consumer platform in China and attracts high-value customers,” said Deborah Weinswig, managing director of FGRT, in her report today. “It is the preferred e-commerce site among both the high-income group and people born in the Eighties. Vipshop is China’s leading online discount retailer. It excels at engaging with loyal customers, thanks to its high-quality branded product offering.”
Weinswig also noted that JD.com has emerged as Alibaba’s “largest rival” in the e-commerce market in China. “Although JD.com has gained market share in the apparel category, it is looking to boost its position further with a cross-border offering,” she explained, adding that in regard to “pure play” online retailers, all are “making an effort to differentiate themselves by migrating from offering mass-market products to selling exclusive and niche products.”
Weinswig said in her report that Chinese consumers have a preference for quality as well as branding. Both play into where and how they shop. Price and selection were also high on consumers’ list of shopping preferences.
Regarding price, Weinswig said “Taobao’s value proposition is clearly centered around the low prices it offers to consumers, while at the same time its marketplace model guarantees breadth of selection and value-added services.”
With Tmall, Weinswig’s analysis showed a consumer preference matrix that was more balanced between price, selection, quality and branding. For its part, Vipshop skewed toward offering better services, branding and quality with consumers. And for JD.com, the consumer preferences leaned toward offering better services and logistics.
Weinswig described JD.com as an “underdog in China’s online apparel market.” She noted that the site competes directly with Taobao and Tmall — at least in the mass-market segment.
“As of September this year, more than 44 apparel stores have left JD.com,” she added. “It is possible that these stores are moving exclusively to Tmall ahead of the upcoming Singles’ Day in November. In order to boost its competitive edge, JD.com announced early this year that it would focus on cross-border e-commerce, planning to attract more overseas brands to the JD.com platform.”
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