Fast-developing sector means traditional sellers have 'no choice'
Metro, Germany's retail giant, announced on Thursday plans to further develop its business models and accelerate the transition to digital in the Chinese mainland market, a sign that international traditional retailers remain determined to compete in the nation's fierce e-commerce sector.
Chinese domestic companies like Alibaba Group Holding have indeed taken a large amount of market share in the e-commerce sector, Jeroen de Groot, president of Metro China, said at the company's 20th anniversary in China on Thursday in Shanghai.
But he said Metro China is improving its online platforms to provide products at reasonable prices and good services in the Chinese market. Metro China has 82 stores in 57 cities in the nation and over 4.3 million registered members.
In September 2015, Metro China expanded its channels by opening an online flagship on Alibaba's Tmall Global platform.
To further tap the great potential of the Chinese consumer market, the company is developing its business-to-consumer (B2C) business.
"Metro Group has always welcomed individual customers," Cao Yong, head of corporate communications of Metro Jinjiang Cash & Carry Co, told the Global Times on Thursday, noting that the company will do more to attract individual customers.
Metro China is not the only international traditional retailer seeking change in the Chinese market.
Wal-Mart Stores Inc said in July 2015 that it had acquired full ownership of yhd.com, a Shanghai-based online supermarket. Wal-Mart hopes to leverage yhd.com's "local experience" to combine with its own global sourcing and supply chain to better develop in China, said Wal-Mart in a statement released on its website on July 23, 2015.
Wal-Mart was not available for comment on its further plans in the expanding Chinese e-commerce market as of press time.
French retailer Carrefour China Inc created its Chinese e-commerce site in 2015. In December 2015, the company also launched a mobile shopping app in China, aiming to explore the online-to-offline business.
"These international traditional retailers have no choice but to expand into the e-commerce market, as the online retail business is growing so fast in China," Jing Linbo, director of the Chinese Evaluation Center for Humanities and Social Sciences at the Chinese Academy of Social Sciences, told the Global Times on Thursday.
Online retail consumption increased 33.3 percent year-on-year to 3.88 trillion yuan ($598.35 billion) in 2015, according to data released by the National Bureau of Statistics (NBS) in January. Total retail sales rose 10.7 percent to 30 trillion yuan in 2015, the NBS data showed.
"The key point is whether a traditional retailer has a profitable business mode that's different from that of competitors," said Jing.
For instance, some online platforms focus on selling fresh food, which can attract a certain group of customers, noted Jing.
It's also important to have professionals working for the online business as the offline modes are totally different from online modes, Jing said.
China's online market is expected to reach 10 trillion yuan by 2020, driven by B2C and mobile commerce, Bain & Co said in a report released in November 2015.
"There is still great space for the development of e-commerce businesses in China," said Jing, noting that physical stores can leverage their advantages to provide better customer service. "For example, customers can enjoy their experience in physical stores. For retailers, it's also important to keep innovating and developing new products to meet customers' needs."
