E-Commerce in China – The Multi-Billlion Dollar Game-Changing Industry

Posted by Harshad

E-Commerce in China – The Multi-Billlion Dollar Game-Changing Industry

E-Commerce in China – The Multi-Billlion Dollar Game-Changing Industry

Posted: 11 Nov 2013 07:01 AM PST

We usually don’t write about finance but we do like to indulge a bit in e-commerce and online shopping, and when it comes to e-commerce, you cannot afford to ignore China’s market. Today (Nov 11) is Single’s Day in China, equivalent to Cyber Monday in the US. Scratch that, it’s not equivalent to it, it’s twice as big. Last year, Alibaba made $3 bil within 24 hours on Nov 11 – this year they are expected to pull in $4.9 billion, all in a day’s work. And that’s just Alibaba.

(Image Source: China.org.cn)

Despite the catchphrase "Made in China" being thrown about a lot in jest, perhaps it is time we change our tune. China is an economic force to be reckoned with when it comes to e-commerce. More than 240 million Chinese consumers shop online, and they are expected to spend $265 bil in 2013 – $75 billion more than the 1.3 trillion yuan ($210bil) spent in 2012.

Of that sum, Alibaba, the world’s largest e-commerce company handled more than 90%, around 1.1trillion yuan ($180 bil) worth of sales through Taobao and Tmall. That’s more than eBay and Amazon combined. And this is just the start.

The Frontrunners

China’s e-commerce market is predicted to overtake the US in 2015, although some are insisting that it could be sooner (as soon as this year). In the second quarter of 2013, the gross merchandise value (GMV) of China’s e-commerce sector is 437.13 billion yuan ($71.77 billion) up from 300.92 billion yuan ($49.4 bil) from the same quarter a year before. That’s a 45.3% increase in just one year.

Of the 437.13 bil yuan ($71.77 billion) in the 2nd quarter of 2013, Tmall leads the pack with 50.7% of the market share while JD.com (formerly 360Buy.com) trails at only 17.1%. Tencent and Suning each take 5.6% and 5%.

(Image Source: iResearChchina)

While Amazon reigns supreme globally, in China, Amazon.cn (or more affectionately known as Z.cn) holds 2.2% of the market share, playing nice with VIPShop, Gome, Dangdang, Yihaodian, Vancl and other independent B2C websites.

Leading By A Mile

Alibaba had its start in 1999, but the relatively younger Taobao was only founded in 2003. Fighting head-on with eBay China, Taobao conquered the market, while eBay bowed out after a mere 3 years. The popular C2C platform then give way for Tmall (Tian mao), a B2C platform to bring in higher-quality merchandise and branded goods to grace Chinese shoppers.

(Image Source: resonancechina)

Aiding this expansion along are a few key elements which helped boosted customer confidence in the platform as well as registration of users and merchants:

  • AliWangWang – instant messenger, which allow direct communication between buyer and seller, to ask for specifics/details and available stock.
  • Alipay – an Escrow payment system. It has more than 180 financial partners and trades in 15 foreign currencies.
  • eTao – an independent search engine to help shoppers compare prices across multiple e-commerce platforms, not just Taobao’s prices.
  • Sina Weibo – Alibaba recently invested $500 mil into the already popular microblogging site to allow users to link their Sina accounts with Taobao accounts, possibly facilitating purchases.
  • Rookie Network – A same-day delivery system to counter logistics problems it has been facing, is being setup. Alibaba is pumping $16 billion to develop this.

A look into Taobao & Tmall

Taobao.com is currently the 13th most visited website on a global scale, as ranked by Alexa. It is a self-sustaining ecosystem in itself, with more than 800 million products listed for purchase. The main site (for mainland China) has sister sites to cater to visitors from Hong Kong, Taiwan, Southeast Asia and other regions.

If you don’t speak the language, you can bank on the middlemen or Taobao agents to manage the shopping for you. Additionally, Taobao has recently acquired an office in Singapore, and launched a package forwarding service for Malaysia and Singapore.

While Taobao is a C2C platform, with offerings that range from the common – clothing for men, women and kids, digital devices and accessories – to the less than common ones – wedding gowns, invites and door gifts (and even a lamborghini once), Tmall, on the other hand, features more high-end products (and authenticity) on a B2C business model. You can find jewelry, lingerie, handbags, premium watches, digital devices and even luxury cars sold on Tmall.

The Competition: Big Players

Tmall which holds 50.6% of the market share in the B2C sector, faces growing competition from a few other rising sites, from the likes of:

JD.com – Formerly known as 360Buy.com (before March 2013), Jingdong Mall shifted its focus from eletronics and home appliances to books, clothing and a full online travel service. It also has an extension for courture brands called 360Top.com. After letting go of Alipay in 2011, it is in the midst of developing its own payment system to facilitate payment. It handles more than half a million orders a day, features 10,000 merchants and is has 100 million pageviews per day. It ranks 24th in China.

Tencent.com – Tencent which owns paipai.com and buy.qq.com, has also purchased 51Buy.com, a platform for consumer electronics with its own logistic network. Good logistics and delivery systems spell further expansion as online shopping spreads out and advances to smaller towns and cities, but its strength lies in social media and the power of word-of-mouth. It ranks 899 in China.

Suning.com – Suning was primarily the leading home appliance retailer in China when it ventured into ecommerce. After acquiring RedBaby.com.cn for $66 mil in 2012, Suning expanded into the hybrid business, following the footsteps of Jingdong. However, it continues to operate both online and offline businesses (it has more than 1500 stores nationwide) after unifying its pricing policy across both environments. Alexa ranks it at 455 in China.

Yihaodian – The largest food e-tailer in China made headlines in 2012 when it announced that it is opening 1000 virtual stores all over China. Shoppers can use Augmented Reality to shop in these virtual stores, using their smartphones. Walmart owns 51% of Yihaodian. The company handles more than 1000 orders for fresh food daily, and operates 390 stores in 150 cities all over China. The site features 2 million products now, and has 10 million visits a day. It ranks 472 in China.

Other notable names in the industries include: Amazon.cn, Dangdang.com, Vancl.com (Chinas’ biggest clothing e-tailer) VIPShop (Jiapin) and Gome. At the rate that the market is booming, we may be seeing changes in the top 10 list in 2014.

Selling To Chinese Consumers

E-commerce in China is a very dynamic industry where companies must react quickly to accommodate their shoppers needs. In a CNN interview, Yu Gang, co-founder of Yihaodian.com, revealed some of the changes the largest food e-tailer in China made to cope with the local demands. Some of the points covered:

1. Clean and minimalistic website designs preferred in the US and elsewhere are not received well by Chinese shoppers, who prefer a crowded and compact website, which gives them the impression of a "high-energy shopping atmosphere".

2. They also prefer to open up links in new windows for faster comparison of prices rather than switching back and forth between pages.

3. Chinese shoppers are extremely price sensitive – sales, deals and promotions are great crowd pullers, and there is little to no brand loyalty. The ‘time is money’ concept hasn’t really caught on, and buyers rarely pay the extra to get their wares to arrive faster.

4. Logistics is essential for e-commerce, and third-party delivery systems have been found to be lacking. After finding that more than 60% of customer complaints received were related to problems in delivery, yihaodian responded by building their own last-mile delivery system.

5. Yihaodian also recognizes the impact social networking and mobile commerce has in online shopping. Word-of-mouth and personal recommendations are still the best way to ensure the spread of a brand.

Combating Counterfeiting

The industry still faces a few persisting problems, one of the biggest is counterfeit goods. Piracy has been plaguing Taobao for years and Alibaba.com for years. iPads bought from Alibaba may turn up fake; ideas were copied off Etsy then sold (in bulk) on Alibaba, just to name a few. The fight against counterfeit goods is costing Alibaba in the billions but the commitment to fight this is there, pending the company’s IPO by end of this year or by 2014.

(Image Source: blogoncherry)

Chinese shoppers understandably prefer to shop for foreign brands when it comes to infant formula and cosmetics products, for fear or accidentally purchasing fakes yet they still buy from these e-commerce sites because the price is (so very) right.

Next Up, Mobile

Inside China, the next focus is in conquering m-commerce. Read more about how m-commerce is going to reshape China’s retail space in this article here and why Jack Ma, CEO of Alibaba predicts that "Taobao Mobile will outperform Taobao".

Over 40% of current mobile internet usage is already directed at mobile-commerce in China and Alibaba is showing interest ($50 mil worth) in Quixey, a Silicon-valley mobile search engine app that lets you search for apps without knowing its name. Nowadays, it isn’t enough that Facebook and Google wants to buy your app, perhaps you should aim to build one Alibaba is interested in.


The Pursuit Of Happiness (& How To Be Truly Happy)

Posted: 11 Nov 2013 05:01 AM PST

We are born with the instinct to find meaning and purpose in our lives and this search for emotional well-being and stability in our lives gets more pressing year after year. In the last 45 years alone, global suicide rates have increased by 60% and some 350 million people worldwide suffer from some form of depression. Is it really that hard to be happy? Or are we looking at all the wrong places?

Consider this: whenever we get the recognition, achievement, material possession, etc. which supposedly are the things that can make us happier, it wouldn’t be long before our satisfaction fades and we go about setting new goals to strive for in our lives. This in psychology is known as the happiness treadmill.

We work hard in the hope to lead happier lives, but only to realize that we are still at the same spot on the treadmill. To be truly happy, we need to know how to get off this treadmill.

Hedonic Treadmill or Adaptation Theory

Coined by Brickman and Campbell in 1971, this theory suggests that people adapt quickly to circumstances in life and eventually return to their baseline levels of happiness. In a study by Brickman, the happiness levels of lottery winners and paralyzed accident victims were found to be no different than the general population after some time from the event.

The treadmill actually acts like a set-point for our happiness level. Whatever we encounter or experience in life, after a brief moment of happiness or sadness, our emotions will return to the baseline. While this protects us from being overwhelmed by negative events and getting stuck in depression mode, it is also the reason why we won’t be able to get our happily ever after.

Our initial happiness and excitement will dissipate, and off we go looking out for the next opportunity which we believe will make us happy again.

Prepping To Be Happy

The Easterlin Paradox (proposed by economist Richard Easterlin in 1974) revealed that people in wealthier countries were no happier than those in less wealthy countries. A recent US research also found that beyond an annual income of US$75,000, any further increase in salary has no significant impact on our happiness level – at least for the Americans.

Does this mean that money and other materialistic pursuits do not serve any long-term purpose in achieving happiness? Of course not. Having more money can make you happier.

"The human animal is incapable of being satisfied except for brief moments. Once satisfied, it moves to the next need it needs to be fill."

– Abraham Maslow (1908 – 1970), American psychologist

More often than not, money is particularly helpful at the bottommost two layers of needs in Maslow’s pyramid.

Maslow’s Hierarchy Of Needs

Psychologist Abraham Maslow proposed in his hierarchy of needs theory (what you see below) 5 levels of fundamental needs. At the bottom of the pyramid is physiological needs, what we need to stay alive: air, food, water, sleep etc. Above that, safety, which includes personal security, financial security, health and fitness, etc.

(via Wikipedia)

With our two bottom layer needs answered for through monetary means, we gaina greater sense of control and certainty over our surroundings. Beyond these two needs, we would attain the right frame of mind to look for and have happiness. Such peace of mind sets the stage for us to enjoy life’s moments and connect better with people, both of which are crucial components for beating that tricky treadmill.

Going higher up the levels, money may not have the same impact on our well-being much longer. We can’t really fulfil love/belonging, esteem and self-actualizing needs with money, can we? But at least now, we are ready to be happy.

The Secret To Being Happy

According to University of California Riverside psychology professor Sonja Lyubomirsky‘s bestseller "The How of Happiness," a good 40% of how happy we are actually depends on what we choose to think and the activities we engage in on an ongoing basis.

This is where what we choose to pursue in our lives matters and has the potential to help us escape the treadmill phenomenon. Depending on what we prioritize on in our lives and the decisions we make on a daily basis, our happiness set-point can change.

Trapped Like Rats

There was a second part to the Easterlin’s findings in that what we earn actually is linked to our happiness. To be specific, Easterlin concluded that the relative income between us and the people around us is what determines our happiness. For example, if you earn $60,000 a year, you are happier in a country where the average annual income is $20,000 than if the average is $80,000. Sounds like a case of keeping up with the Joneses? You bet.

What You Can Do To Be Happy

Well, first of all, we should experience the present moment in our lives rather than focusing too much on the future or ruminating on our past. The present is what we truly possess and it is those activities which we choose to engage in that’s going to make us happy beings.

So what can you choose to do today?

1. List Your Blessings

In a psychology experiment by Emmons and McCullough, a group of participants were asked to write down 5 things which they are grateful for, once a week. After doing so for 10 weeks, the group ended up feeling better and more optimistic about their lives, and experienced fewer physical symptoms of illness.

Check this benefits of gratitude list out to see what science has to say about the power of gratitude.

2. Physical Exercises

This one also has some scientific truth in it. Exercise has been found to improve your mood, sleep and is a great stress reliever (as it reduces cortisol levels in the body). Exercising also releases endorphins and dopamine, the "happy chemicals" or neurotransmitters in our brain that allow us to feel pleasure and induce us a sense of well-being.

Check out more about this with regards to runner’s high, how moderate aerobic exercises can elevate moods, why physically active people experience more enthusiasm, and how exercise helps with depressed patients.

3. Performing acts of kindness

Research has shown that performing random acts of kindness makes you happy. Actually, "altruism" should be the one getting the praises but in both cases, the key is to do random acts, not scheduled ones (which would dilute the effects). It’s probably no coincidence that most, if not all major religions endorse kindness and forgiveness as one of their core teachings.

The best part about all this is that research has also shown this to be some sort of self-perpetuating loop: doing kind acts make us happier which makes us more inclined to do even more kind acts! Check this post out for ideas for random acts of kindness or give this Live Happy app a try [$0.99]

4. Make Social Goals

If you are working hard for a pay raise only to make it a materialistic pursuit (do you really need another smartphone?) then you are still trapped, but if you are aiming for it to spend on day-to-day activities or to build social relationships then research says that you are on the right track.

Research has shown that people are happier when they make purchases to acquire life experiences (e.g. traveling, dinner with friends, etc) as compared to material possessions. The shared experiences embedded in our memory bank have a longer-lasting effect compared to one triggered by materialistic pursuit.

Don’t Go Looking for Happiness

Despite all the research findings and tips by experts, saying goodbye to that cunning hedonic treadmill for life remains a herculean task. We may find ourselves never finding a good answer to what life and happiness is about, and in turn, find the pursuit of happiness a lost cause.

To that end, psychologist and holocaust survivar, Viktor Frankl has this to say:

"Happiness cannot be pursued; it must ensue, and it only does so as the unintended side effect of one’s personal dedication to a cause greater than oneself or as the by-product of one’s surrender to a person other than oneself."

In the 3 years as a POW in nazi concentration camps, he discovered that inmates who found meaning in their suffering and maintained hope of being released were the ones who eventually survived. After his liberation, Frankl went on to establish that the "will to meaning" is critical in attaining fulfillment in our lives.

Happiness Should Happen

The emphasis lies not on oneself, but that of finding meaning in the day-to-day demands. It means taking responsibility in our actions and fulfilling our duties to the fullest. It means living in the present and answering life as it unfolds.

Happiness is not to be seen as an end itself, but rather as a byproduct from having meaning in life through the choices we consciously made. If all that sounds too philosophical for you to digest, here’s another take by a politician on how happiness should "happen" rather than being attained:

"Happiness is like a cat, if you try to coax it or call it, it will avoid you; it will never come. But if you pay no attention to it and go about your business, you’ll find it rubbing against your legs and jumping into your lap."

–William J. Bennett, American politician


20 Cool and Creative Speakers

Posted: 11 Nov 2013 02:01 AM PST

When you think of speakers, what’s the first thing that comes to your mind? While many of us have probably grown used to visualizing speakers as cumbersome, boxy sound-producing devices, that perspective might just have to change as more and more compact speakers are being introduced to the market.

Nowadays, industrial designers are working ever so hard at creating design solutions that constantly stretch the limits of a speaker set in terms of portability and aesthetic values. What we’ve got here today is a collection of 20 different sets of speakers with distinct designs.

Whether you’re an audiophile or just a casual listener, chances are you will be impressed with the uniquely intricate features some of these speakers have to offer. When you add portability into the mix as well, it doesn’t get much better than this, does it?

Beats by Dr. Dre Pill Speaker

KOHLER Moxie Showerhead & Wireless Speaker

Monochrome : Custom Speaker by Azah Azreen

Portable Speakers by Nikhil BANWASKAR

Portable Boombox Speakers

Havit Sk109 USB-Powered Dual Speakers

Hi-George by Hi-Fun

Fidelio SoundRing with AirPlay

I.D.E.A: Pig Speakers

Teepot by Jorge Arbelo Cabrera

WOW Bluetooth Speaker by KAKKOii

The Turtle Shell

BoomBotix Boombot2 Portable Wireless Speaker

Color Changing Speaker by Yantouch

Unmonday 4.3L Airplay Speaker

Moonlight Speakers Project Sound and Light

Boombox Rex

Carbon Audio Zooka

Bambory Bamboo Speakers

Marshall Hanwell Speaker Cabinet



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