China’s online shopping will disrupt the world soon enough
China is by far the largest e-commerce market in the world, with its e-commerce sales hitting a high of $1.53-trillion in 2018
While SA’s retail sector is yet to fully embrace e-commerce, its Brics partner, China has become a behemoth in online shopping, which accounts for a massive chunk of luxury retail around the world.
China, which is the world’s second largest economy, contributes about 33% of the overall luxury market around the world, according to David Sadigh, founder and CEO of Digital Luxury Group.
Sadigh said the country, which has fashioned its own online ecosystem behind the “Chinese wall”, is by far the largest e-commerce market in the world, with its e-commerce sales hitting a high of $1.53-trillion in 2018.
Microsoft SA’s Ravi Bhat says that although SA’s economy is still largely undisrupted in terms of conducting business online, local retailers are aware that it is not that the industry will never be disrupted, and that it is merely a matter of time.
Sadigh, whose company has a footprint on various Chinese digital platforms, was one of the speakers at a Microsoft event in Paris, France. He said China has largely become a cashless society and even uses QR codes to let consumers pay digitally at street stalls.
Edoardo Zegna, head of omni-channel, content and innovation at Italian luxury fashion house Ermenegildo Zegna, which has a store in Sandton City, concurred with Sadigh on China’s power in retail and e-commerce, saying that whatever works in China, will work forever.
He said it was not physics to understand that wherever the consumer spends its time, the retailer should be.
“Whether we like it or not”, the luxury market is more and more affected by how the consumer thinks and acts, said Zegna, adding that consumers will dictate what luxury will look like in the years to come.
He emphasised that digital should not just be an add on to a marketing department, but that it should be attached to every division in a business. In 2016 only 16% of his company’s marketing budget went to digital advertising, whereas in 2019, he said, it will be 63%.
• Business Day’s trip to the event in Paris was sponsored by Microsoft