China's e-commerce firms should up their game

IMPULSE- BUYING FRENZY? Mr Ma, Alibaba Group's executive chairman, in front of a screen showing real-time sales figures for e-commerce sites Taobao.com and Tmall.com on Singles' Day last week.


    Nov 18, 2014

    China's e-commerce firms should up their game

    MY 56-YEAR-OLD mother likes her beauty sleep. But she stayed up late last Monday to make sure she could snatch an early bargain the nexy day, during China's annual online shopping extravaganza.

    Those like my mother have now been given a name: "Jack Ma's women", or female shopaholics who cannot resist a bargain, and many believe it was this group especially that was the driving force behind this year's record-breaking sales of 57.1 billion yuan (S$12 billion) on Alibaba websites during Singles' Day.

    As a reporter covering China's booming e-commerce sector, however, I was certainly not one of the target customers for Mr Ma.

    I was asked several times by colleagues and friends last Tuesday what kinds of things I had bought. I was a little embarrassed to admit that I had bought nothing.

    But I had a very decent excuse. Along with around 400 other journalists from China and abroad, I had endured a sleepless 24 hours, reporting from the scene, so to speak, at Alibaba's corporate headquarters in Hangzhou.

    We all had to eat and sleep in a crowded auditorium while staring at a rapidly rising number, a real-time sales figure clicking ever higher on a giant screen.

    Even if I had wanted to, I would not have had the time to shop amid a hectic schedule of updating my editors back in Beijing, doing interviews, writing stories, and checking and replying to e-mail.

    But the main reason I did not spend anything was the simple fact that I did not find anything on sale that I genuinely needed.

    When I shop, I always buy things that I really want. I never buy something just because the price is irresistibly cheap.

    As Chinese consumers get wealthier and more sophisticated, we can only expect more sales events such as Singles' Day because, more often than not, companies see them as great opportunities to sell cheap goods at huge discounts, rather than the chance to offer a selection of new or quality goods.

    Headline discounts and high sales are really what these kinds of shopping events are about.

    Few online merchants actually make a profit because of the increasingly fierce competition - they often have to cut their prices to the bone just to make a sale.

    This impulse-buying frenzy also leads to overspending, resulting in a lot of shopping hangovers last Wednesday.

    During a recent meeting of the Cyberspace Administration of China, one official noted that the number of online shoppers choosing to return items or ask for refunds on or after last year's Nov 11 event was huge, adding considerable pressure to China's already-strained logistics industry.

    The latest statistics show that 80.51 billion yuan was spent online last Tuesday on 409 million orders. The average sale was 197 yuan, compared with 191 yuan in 2012.

    Many e-commerce companies in China are aware of what they need to do to upgrade the event, and some have made efforts to include more high-quality goods in this year's line-up of bargains by offering more imported goods via online channels.

    Mr Ma insisted during the event that, rather than attracting buyers with cheap goods, his company was offering new products and services to woo shoppers.

    "Changes have started to take place in this year's event. By bringing more overseas brands to China, we hope we will be able to make more Chinese women satisfied with what we can offer," Mr Ma said.

    If he really does what he promises and works his magic, then maybe this woman will be tempted to go looking for a bargain next year, with or without any huge discount.