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China's online retailers need to capture impulse buys

News, 23 June 2017
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BEIJING: As China's e-commerce growth slows, retailers need to be looking at refining their omnichannel offer and delivery options, according to a leading consultancy.

"Our latest research findings show that Chinese shoppers have come to expect that their offline and online shopping activities will be integrated into seamless omnichannel journeys," said Lambert Bu, a McKinsey partner in Shanghai.

"Yet the potential is not fully tapped," he added.

His comments, reported in the South China Morning Post, were based on a survey of more than 5,900 consumers on the mainland earlier this year which showed that while most consumers stated they were prepared to take up omnichannel experiences – such as ordering online and collecting in-store – few had actually done so.

This gap between expectations and adoption rates, the consultancy said, indicated that retailers should review their omnichannel offerings.

They could also consider more advanced services such as in-store virtual reality experiences and online product customisation, it suggested.

Another ploy that may prove crucial in generating sales is speed of delivery, tied to a trend towards impulse shopping online.

For example, if consumers want to buy when they are learning about a new product from a chat with a friend on the social media app WeChat, retailers ought to be giving them the ability to act immediately.

McKinsey's research said that retailers able to deliver within an hour would generate more sales and significantly increase consumer satisfaction.

The advice comes as online sales slow: e-commerce gross merchandise volume (GMV) growth is expected to be 19% this year and 16% next year, well down on the 74% of five years ago, as the market has matured.

Online retail sales in China are forecast to hit US$812bn in 2017 – 17% of the nation's total retail sales .

Data sourced from South China Morning Post; additional content by WARC staff

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