China plans to implement stricter rules governing the country’s fast-growing ecommerce market. Driven by the millions of Chinese consumers who are discovering the online market for the first time, China’s ecommerce sector grew from $3 billion in 2009 to $64 billion in 2012, according to a report by the “South China Morning Post” newspaper. With the country set to become the world’s second-largest online retail market, with the business-to-consumer submarket forecast to expand by an average of 34 percent each year, the government was compelled to flex its regulatory muscles. Several laws covering the market will take effect on March 15, 2014.
"China E-Commerce: Regulations For Protecting Consumers And Fighting Counterfeit To Take Effect In March", International Business Times, January 27, 2014
China’s online retailer Alibaba poses the most serious challenge yet to Amazon.com and its business model, which is based on the so-called three pillars —operating with low margins, helping customers find deals easily, and creating a lineup of customer-oriented services. Alibaba threatens Amazon with its no margins business; it earns money not from sales but from advertising and premium services. Unlike Amazon, Alibaba keeps its customers and operations away from online search engines. Also, Alibaba creates revenue no matter what kind of customers is accessing its online store. There are two ways that Amazon can respond to Alibaba’s disrupting effect: first, the online retailer can ignore the challenge and instead continue focusing on its most profitable customers and, second, it can create an independent business unit that would adopt Alibaba’s revenue model.
"Alibaba: The First Real Test for Amazon’s Business Model", Harvard Business Review, January 21, 2014
L’Oreal SA stopped selling its Garnier brand of cosmetics in China and will instead focus on its other brands. Citing the slowing market in China as the reason behind its move, L’Oreal said it will continue pushing its L’Oreal Paris and Maybelline New York brands in the country. A week before L’Oreal’s announcement, its American rival Revlon Inc. said it plans to withdraw completely from the China market. Currently valued at $25.9 billion, China’s cosmetics market is the world’s third largest and is forecast to grow 63 percent in the five-year period ending 2015 by market research firm Euromonitor. While it remains L’Oreal’s third largest market where it holds a 17 percent share, China’s cosmetics market is “slowing, although still dynamic,” the company said.
"L'Oreal ends Garnier sales in China amid slowdown", Reuters, January 08, 2014
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Red Luxury, January 29, 2014
South China Morning Post , January 20, 2014
Wall Street Journal, January 16, 2014
telegraph.co.uk, January 10, 2014
KUOW.org, December 12, 2013
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