Chinese booming e-commerce nibbles traditional retailers(2)

TRADITIONAL RETAIL INDUSTRY THREATENED

In contrast to the flourishing e-commerce enterprises, traditional retail industry has been greatly shocked in recent years.

On Nov. 11, the so-called singles day and a big promotion event day for Chinese online shops, the daily sales on the world's largest e-commerce group Alibaba's Taobao and Tmall reached up to 19.1 billion yuan RMB.

Nie Linhai, deputy director of the Department of Electronic Commerce and Information of the Ministry of Commerce, said, "China is expected to surpass the United States and become the world's largest online retail market in 2013."

"Customers used to buy things only when they can see and touch them personally. But thanks to the complete online information such as the evaluation and price check systems, information asymmetry has been solved," said Huang Lihua, director of the E-commerce Center of Shanghai-based Fudan University.

Together with the advantages of lower prices and great convenience, e-commerce has brought huge challenges to traditional commercial activities, with some retail shops becoming customers' "fitting rooms".

"The impact of e-commerce on traditional business areas is inevitable," said Jingdong founder and CEO Liu Qiangdong. And the tens of millions yuan RMB in sales growth of e-commerce each year is actually won over from the traditional retailers.

Consequences of the impact are emerging, with a number of stores going out of business and sales volume of large malls plummeting.

In the future, the market shares of e-commerce enterprises in standard products like electrical appliance, electronic gadgets, books and cosmetics will probably reach 70 to 80 percent, according to Liu Qiangdong.

Apart from retailers, some cities as traditional business centers, including Beijing and Shanghai, may be embarrassed by the "fitting room" dilemma.

"For these cities, what they can do is to upgrade customer experiences and enhance cultural attraction," Huang Lihua said.