Online shopping in China is booming and taking away from in-store sales for many retailers.
Last year, Suning, China's biggest retail chain, generated about $17 billion over the course of the year. China's new e-commerce giant Alibaba (NYSE:BABA) made almost half that in its Tmall in just one day, Singles Day, reported Reuters.
Alibaba's network of online retailers made more than $9 billion in sales during the 24-hour shopping extravaganza.
But those booming digital sales mean Suning, Walmart (NYSE:WMT) and Best Buy (NYSE:BBY) are struggling to keep Chinese shoppers in-store as they increasingly shift to purchasing online.
"The trend is definitely towards e-commerce because that's where the consumers are," Frank Lavin, CEO of Export Now, which helps global firms launch their businesses in China, told Reuters. "The 'big box' model here is already crowded. You need to invest a lot and be here on a large scale to make it work."
Earlier this month, Best Buy announced that it plans to sell off its retail business in China and narrow its focus on North America.
Other retailers have struggled in China, including Walmart. The company reportedly found pricing discrepancies in its Chinese operations, attempting to make business look better than it actually was.
Chinese shoppers are increasingly embracing the often lower prices and convenience of online shopping—showrooming is a popular habit.
A host of retailers are now trying to get a piece of the growing Chinese e-commerce market including brands such as Gilt, Costco (NASDAQ:COSTCO), ShopRunner, Ikea and Zara.
-See this Reuters article
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