How consumers shop is a mystery companies across the globe seek to uncover. In China, however, the two big ones — JD.com and Alibaba — have found ways to gain focused insight into shoppers’ spending habits, which in turn help retailers make eCommerce decisions.
The two eCommerce giants track sales across China that can spill to over $17 billion in just one day. That monitoring, or data collecting and analyzing, comes through in indexes and has made life easier for certain retailers, according to Bloomberg.
JD.com produces a slew of indexes ranging from focusing on liquor purchases to what and how many appliances are selling. Meanwhile, Alibaba has announced plans to publish its own line of indexes, as it leads as the dominant online marketplace in the country.
The data from all those indexes and insight is arguably essential and can be imperative for companies like Starbucks and Walmart, which are each looking to expand and tap into how the more than a billion people in China purchase things. Experts say these indexes are exponentially better than a survey that only plucks a small sample size. And that matters because in China, eCommerce is estimated to account for more than 11 percent of total consumption, with online retail sales rising nearly 26 percent just this past November. Singles’ Day (November 11) sales on Alibaba reportedly hit about $18 billion.
One item that is tracked closely and concentrated with insight is the purchasing of baijiu, a Chinese hard liquor that comes with a higher price point and is often gifted within the country. The alcohol — 40 to 60 percent proof — has more recently crossed oceans, made its way into some cocktail bars and can come with a $90-per-bottle price sticker in New York City. In China, however, the sales dipped significantly, and experts noticed the trend paired with the slower economic growth and China’s President Xi Jinping’s attempts to curb corruption. Then, more recently, JD.com’s indexes are pointing to this past May when prices started to quickly clink back up.
Experts at Ali Research Institute, which is part of Alibaba, point to an increase in wealth, so much so that by 2020 about 100 million households will be considered to be “rich” or “middle-class.”
But Alibaba and JD.com aren’t alone in the tracking of these consumers. Beijing’s Tsinghua University has set out on its own venture to trail and trace consumer habits on eCommerce sites with their own index, known as iCPI. And stateside, MIT collects similar data through economist Alberto Cavallos’ Billion Prices Project, including daily inflation indexes.
Ultimately, as China’s consumers continue to consume and the interest in this data continues, experts say more indexes may appear focused on even more sales of products.