A recent article from InternetRetailer.com noted that ecommerce sales in China were up 53.7% over last year, showing strong and steady growth as the world’s largest country embraces ecommerce as a way to do business. The same article also called out an interesting trend that offers a powerful lesson for organizations with ecommerce initiatives in other parts of the world: build your ecommerce infrastructure before you worry too much about profits.
The article addresses China’s unique ecommerce strategy in the following quote:
“The profit of almost every e-retailer was very low because they are investing lots of money into infrastructure and hoping to grab more market share,” says Jingwen Ruan, chief operating officer of iResearch. “At this stage, they are caring more about sales volume rather than profits. In addition, online retailers need to improve a lot in the management capability, such as supply management and channel management, and need many experienced online shopping professionals as well. All need lots of investments to support their further development.” (Source: InternetRetailer.com, my emphasis not the author’s)
This forward-looking focus on ecommerce is something of a departure from what is most commonly seen in ecommerce today. Too often the main goal of an ecommerce initiative is to bring a site online with little consideration for how the site will continue to grow and add bandwidth to support it’s success. Of course, the ultimate goal of any newly live ecommerce site–in China or otherwise–is to begin accepting orders and subsequently boost company profitability and streamline efficiency, but China’s focus on infrastructure speaks to the country’s urge to position themselves to gain massive marketshare in coming years.
What’s the lesson for ecommerce companies outside of China?
Simple. Start looking at how your site is positioned for future growth. Ask yourself:
- Can your site handle an extreme increase in online orders?
- Is your ecommerce site integrated with your ERP and back-end systems to leverage the efficiencies of ecommerce even as you grow sales volume?
- Does your ecommerce strategy include steps to grow your site functionality to keep ahead of industry trends?
- Are you actively driving qualified traffic to your ecommerce site?
- What about your fulfillment and shipping functions? Are they online to handle extreme growth?
If you answer “no” to any of the above questions, it would be advisable for you to review your ecommerce strategy and look at specific ways that you can grow your ecommerce infrastructure now to ensure that you are strongly positioned in the future. Getting ahead and staying ahead of the competitive curve will position your ecommerce site for growth and future staying power.
To learn more about how to leverage the power of your ecommerce site, download the white paper, B2B Ecommerce Success – Seven Questions to Consider When Beginning an Ecommerce Initiative.