Opportunities for Malaysia Exporters through China's

for Malaysia exporters

Market alert

Opportunities for Malaysia Exporters through

China's E-commerce Market

1.Background

According to McKinsey Global Institute, China’s e-tailing industry has posted 120% compound annual growth since 2003. The rapid development of e-commerce vastly improves the efficiency of shopping and the availability of products without the need to build out extensive networks of traditional physical stores, which will bring out great opportunities for Malaysia exporters.

2.Key driver: Expanded Broadband and 3G Penetration

E-commerce produced more than $190 billion in 2012 sales, according to a report by the China Internet Network Information Center (CNNIC), an increase of 66.5 percent over 2011′s total. With expanded broadband and 3G penetration, It is projected that online sales could reach $650 billion by 2020. .

In 2011, China has the world’s largest online population, with only 30% broadband penetration but 129million residential broadband accounts, exceeding even the 81 million accounts in the United States.

With a wider coverage of 3G support, mobile users are playing an increasingly important role in online shopping. According to report from TechCrunch, more and more online shoppers tend to browsed items on their smartphones rather than home PCs.

3.Potential Sectors for Malaysia Exporters to Tap into China’s Online Market

Children and Baby Care Market

China have experienced both baby and economic booms in the past decades, which bring out great demand for children and baby care products. According to Euromonitor International, retail sales of China’s children care products are anticipated to reach 8.7 billion yuan by 2013, from 5.3 billion yuan in 2010 and the sales of China’s baby care will increase from 3.5 billion yuan in 2010 to 5.8 billion yuan by 2013.

Online market for children and baby care market has enormous potential. Today, the internet is a valuable resource for mothers. More and more parents

for Malaysia exporters

research, discuss, shop, compare, relax and find emotional support from each other online. Manufacturers and traders may gather information and understand the needs of mothers from the relevant channels in China. Besides, many new-generation mothers visit popular mum’s websites to read articles or post inquiries before making purchases. They may also join discussion groups for mums. There is a large community of mothers in this virtual world exchanging information, including their views on specific products that are a valuable source of information to suppliers, too.

Cosmetics

Online market of cosmetics, including overseas section, has grown rapidly, thanks to increasing Internet access and use of e-commerce websites such as Alibaba Group’s B2C platform http://doc.guandang.net and its C2C one http://doc.guandang.net.

With the scale of transactions in Chinese online retail market increasing, many traditional retail companies, including cosmetics enterprises, have made attempts to break into e-commerce last year by their own business development or acquiring online shopping platform to explore the fresh market.

Food & Beverage

Online market of foreign goods is a huge market space for Malaysian exporters.With Chinese consumers’ rising income level and pursue of green and healthy foods, together with the country’s popular and general accepted online shopping, more and more Chinese consumers, especially the young generation, tend to buy foreign products, especially foods and beverages through online stores. It is reported that China’s online shopping consumers would reach 310 million by 2013 and the country’s online transaction volume reached USD 1.63 trillion, up 21.3% year-on-year.

Malaysian products of foods and beverages with good sales in China include: instant coffee or white coffee, milk tea, biscuits, fruit juice, candies, chocolates, fruit jelly, cooking sauces and pastes, nuts, etc.

4.Conclusion

China’s e-commerce market will continue to develop enormously over the next few years, with expanded broadband and 3G penetration. For Malaysia exporters, potential online markets include children and baby care market, cosmetics, and food & beverage.