Investors said at a forum in Beijing Thursday that they are optimistic about the opportunities in China's booming online business-to-customer (B2C) market, but traditional and online giants such as Suning and Baidu's participation might make the competition fiercer.
"The rapid development of China's B2C market offers many investment opportunities in the next three years, and investors will provide potential companies with funds and strategies," said Jiang Haotian, general manager of Northern Light Venture Capital, a China-focused firm headquartered in California.
The transaction value of China's B2C market amounted to $11.1 billion in 2009, and it is expected to reach $24.1 billion in 2011, according to figures from Visa China.
Beijing Jingdong Century Trading, the operator of B2C site 360buy.com, announced Wednesday that it would raise a total investment of $150 million from the US's Tiger Global Management. "About 50 percent of the funds will be used to improve storage, logistics and customer services," said Liu Qiangdong, CEO of Beijing Jingdong.
Other B2C websites such as online men's clothing retailer MasaMaso, online shoe retailer OKayBuy, online jewelry retailer 9diamond.com as well as dessert maker and online retailer 21cake.com also have secured investments ranging from $1.5 million to $10 million.
The booming B2C market not only attracts ambitious investors, but also encourages Internet giants and traditional retailers to participate.
Baidu, China's largest search engine, announced Wednesday that it will cooperate with Japan's largest online shopping mall operator, Rakuten, to establish a joint venture with $50 million in joint investment in three years, and the new JV will launch a B2C site for Chinese online customers in the second half of this year.
Traditional home appliance retailer Suning launched its B2C site suning.cn Monday, and aims to occupy 20 percent of China's online home appliance market by 2013.
Suning's major competitor Gome is also mulling entering e-commerce and will announce a new plan in March, according to He Yangqing, vice president of Gome.
Experts at Thursday's forum said B2C will replace customer-to-customer (C2C) to become the main trend in the online shopping industry.
Taobao.com, the country's largest C2C online platform, expanded into the B2C sector by launching the home appliances and electronics site 3C.taobao. com January 13.
Wang Juntao, CEO of 6688. com, an e-commerce service provider, expects more traditional retailers will enter the B2C field and make the competition fiercer.
"Traditional retailers will expand their sales channels on the Internet, while new participants can concentrate on some specialized markets, such as healthcare and childcare products," said Ruan Jingwen, managing director of iResearch Consulting Group.
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