US retailing giant Macy’s has shelved plans to start selling online in China, the latest casualty in a supposedly booming e-commerce market that is proving elusive for some western retailers.
The US firm had planned to begin online sales in China in the spring, after buying a minority stake in Chinese retail company VIPStore last year.
Back then, it claimed the move was to “test the waters” of China’s e-commerce market. Apparently, the waters today are not to Macy’s liking as a spokesman told the Wall Street Journal that the firm has now put its e-commerce plans on hold.
The official reason is that it needs to learn more about Chinese shoppers, not because it is concerned about China’s slowing economy or fears a declining appetite for luxury goods.
Now might seem a strange time to be putting on the brakes in China’s booming e-commerce market. Online retail sales have increased more than 70% annually since 2009 and are expected to reach $539bn by 2015, according to consulting firm Bain & Co.
Spain’s internationally-minded fashion retailer Zara has been in China since 2006 and it took the plunge into internet sales last year with a site that offers Chinese buyers the full range of men’s, women’s and children’s clothing available in physical stores.
Macy’s said that consumers in China can continue to order online from Macy’s US website and have those goods delivered to China, but the number of Chinese e-commerce customers is very limited, the company admitted.
Neiman Marcus, also shuttered its Chinese e-commerce operations last year. Like Macy’s, its now ships products from its US warehouses to China.
Watch this video in which Shaun Rein, founder of the China Market Research Group, talks about what it takes to succeed with China’s e-commerce market.