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ABSTRACT
The economic and social gains from electronic commerce (e-commerce) that promote innovation, industry upgrading and economic growth have been widely discussed. China’s successful experience with e-commerce has had a positive effect in transforming consumer-goods sectors of the economy and motivating economic reform. This article looks at how e-commerce reduces barriers to entry and enables firms to move up the value chain by using the global value chain framework to analyse the impact of e-commerce on the upgrading trajectories and governance structures of China’s apparel industry. For large Chinese brands, e-commerce has enabled end-market diversification. For small- and medium-sized enterprises, e-commerce has facilitated entry with functional upgrading as well as end-market upgrading. In the “two-sided markets” created by platform companies, the “engaged consumers” are the demand side of this market, and “e-commerce focused apparel firms” are the supply side of the new market. Consumers and platforms are more directly involved in value creation within this emerging internet-based structure.
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Disclosure statement
No potential conflict of interest has been reported by the authors.
Notes
1. Averages drawn from Bain & Company (Citation2015), CNNIC (Citation2015), S-GE (Citation2014), eMarketer (Citation2015), MarketLine (Citation2016).
2. Averages calculated from eMarketer (2016), eMarketer (Citation2014), and ATKearney (Citation2015). Sales are B2B.
3. The data are for the share of respondents who say they have bought online in the previous three months. The global average rate of electronic goods is the average rate from the US, UK Germany, Japan, India, Brazil, Russia, China, South Africa and Nigeria, the same as the global average rate of apparel. Clothing, shoes, hats, bags/suitcases, and outdoor products were the most popular products purchased online in China in 2013. All are more popular with female shoppers; they accounted for 41% of female purchases compared to 28% for males (based on data from iResearch; shares of the top 10 favourite commodities purchased by female and male shoppers online).
4. An e-commerce marketing service plan, launched by JD.com (one of the leading online companies in China) and Tencent (owner of the biggest social platforms in China) jointly. The plan aimed to provide a tool to accurately paint a better portrait of the potential user, and improve companies’ interaction with the consumer.