Amazon has seen a surge in Chinese buyers in 2015, but a recent RBC Capital Markets survey shows Chinese consumers still view chief rivals Alibaba and JD.com as having better products and deals. Here’s why that might be a problem for Amazon:
China is expected to account for more than half of online retail sales in 2018, according to an eMarketer forecast—which means the pressure to be competitive in the Chinese market is only going to increase.
RBC surveyed 1,530 (pdf) Chinese online shoppers, who ranked Alibaba as the clear go-to source for buying online. Nearly three-quarters of consumers polled by the Canadian investment bank saw Alibaba’s Taobao and Tmall sites as offering the lowest prices and the best selection, respectively. Amazon is distinctly in fourth place, after JD.com.
The explosive growth in online sales within China comes as its middle class gains greater access to the internet and more money to spend on it. The sales rate increase is outpacing growth elsewhere in the Asia Pacific region. China outspent Japan, the next-highest online retail spender, by 143% in 2014. And the gap between China and the rest of the region is expected to widen.
The RBC survey also suggests that competition for online sales is increasingly being waged in the mobile sphere. According to the survey, 92% of online shoppers reported they use their mobile devices for shopping two to three times per month, while 88% used a desktop computer.