Date
21 July 2017
Western retailers such as Wal-Mart Stores have seen store traffic decline in China as more consumers shop online. Photo: Bloomberg
Western retailers such as Wal-Mart Stores have seen store traffic decline in China as more consumers shop online. Photo: Bloomberg

Western firms see sales fall in China as online shopping surges

Western retail giants in China are feeling the pain as hundreds of millions of Chinese consumers migrate to online shopping, the Wall Street Journal reported.

After enjoying nearly three decades of steady growth in its China business, Unilever Plc saw a sharp fall in sales, the newspaper said. Last October, it warned sales in the country would fall 20 percent in the third quarter, and announced another 20 percent drop in the next quarter.

Swiss food giant Nestlé SA,  Colgate-Palmolive Co. and Germany’s Beiersdorf AG also experienced declining sales in the Chinese market, the Journal said.

Electronics retailer Best Buy Co. sold all its remaining stores in China last year, citing stiff competition from Chinese online rivals. European retailer Metro AG also pulled its consumer-electronics business from the country in 2013; it cited the market shift online.

Wal-Mart Stores Inc., which entered China in 1996, is beefing up its online strategy as store traffic has fallen steadily over the past three years.

An estimated 461 million Chinese consumers, a third of the population, are now shopping online, up from 46 million in 2007, when e-commerce started gaining momentum, the newspaper said.

The country’s e-commerce market grew 49 percent last year—after gains of 59 percent, 51 percent and 70 percent in the previous three years respectively.

China overtook the United States as the world’s biggest e-commerce market two years ago. In 2014 the country reported online sales of US$453 billion, or 11 percent of all retail sales.

Nearly half of Chinese consumers are already buying groceries online, compared with just a quarter of global consumers, the report said, citing a Nielsen survey of 30,000 consumers.

– Contact us at [email protected]

CG

EJI Weekly Newsletter

Please click here to unsubscribe