With access to tens of millions of credit card users, it makes perfect sense for mainland banks to view e-commerce business as a natural area for expansion. Some of them have indeed already made their foray, but the results have been anything but encouraging.
The China Securities Journal recently ran a story about Cheng Gang, who runs a small cake firm. His experience helps us understand why banks are having little luck.
As a customer of Bank of Communications (03328.HK), Cheng started his e-tailing venture on the lender’s e-commerce site. He had hoped to boost sales during the Mid-Autumn Festival in September but soon discovered to his dismay that procedures to launch promotion campaigns or alter his cyber store front was extremely cumbersome and time-consuming. By the time the process was done, the festival was already over. He later moved on to Alibaba’s Taobao platform and achieved much better results during the Nov. 11 “Singles’ Day” shopping festival.
The Journal also interviewed Li, an active shopper on the internet. Li said he hardly patronizes banks’ e-commerce sites. The reason is simple: product offerings are very limited and there is no clear focus.
“If I want to buy food products, I will pick web supermarket yhd.com or womai.co. For daily gadgets, Taobao is the platform and for appliances, I will first think of Suning.com or JD.com”” he told the Journal.
Banks’ e-tailing websites are also hard to navigate; they lack promotion activities and items are often relatively pricey, Li added.
To turn their massive credit data and financing strength into e-commerce edge, banks clearly have to fix their e-commerce operations and image and make them more appealing and competitive. Some lenders appear to have realized this.
In addition to players like Bank of Communications and China Construction Bank (00939.HK), Industrial and Commercial Bank of China (01398.HK), Bank of China (03988.HK) and China Minsheng Banking Corp. (01988.HK) are now said to be preparing for a serious push into e-vending.
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