Read the below case and answer the following questionsuse questions as headers and answer

Read the below case and answer the following questions use questions as headers and answer question directly below heading no additional writing needed, just the answer to the case questions

Case Description*: Whats the worlds largest and fastest-growing e-commerce market? Its China, with over 800 million Internet users, and accounting for over 50 percent of global retail e-commerce sales (projected to be nearly 60% by 2021). Chinas mobile payment market is a whopping 11 times the size of the U.S. market. The volume of online sales in China now exceeds that in the United States. E-commerce is predicted to account for 40.8 percent of all retail sales in China by 2021. Chinese e-commerce is very mobile: By the end of 2018, more than 75 percent of ecommerce sales in Chinaover $1 trillion worthwere transacted via a mobile device. M-commerce accounted for 81.6 per-cent of Chinese e-commerce sales in 2017. Payment for both online and in-store sales via mobile phone services such as WeChat is sweeping the country. According to iResearch Consulting Group, a Chinese firm, mobile payments in China totaled $9 trillion in 2016, compared to $112 billion in mobile payments that same year in the United States. China has also become the worlds largest mobilepayment market. Tencents WeChat, with over 900 million active users, is the dominant mobile platform in China. Retailers and brands have found that capturing the consumers attention typically requires operating within the WeChat environment on the WeChat plat-form, as opposed to building a direct-to-consumer mobile app. Retailers such as Estee Lauder, Coach, and Gap run their loyalty programs within the WeChat app, and conduct customer relationship management (CRM) on the WeChat platform itself. Max Factor built a new social CRM system on the WeChat platform. It created a detailed customer database with 36 categories of tags using online and offline data. Max Factor now use real-time data to send personalized messages based on different stages of the customer life cycle via WeChat. Credit cards never became widely used in China. Until recently, discretionary spending was not really possible for many Chinese, and there has been a long-standing cultural aversion to debt. On top of that, the government made it difficult for companies such as Visa Inc. and Mastercard Inc. to set up shop. E-commerce has given Chinas digital consumers access to products from overseas, and a notable share of consumers appears to be taking advantage. Cross-border shoppers appear to prefer items that are either too expensive or too scarce domestically. The most popular categories of goods Chinese purchased online include apparel, food and beverages, household products, consumer electronics, appliances, and personal care products. Food, luxury, and sports and wellness products are key categories for future growth. Chinese online shoppers tend to be young, urban, and highly educated. They are much more consumption-oriented than older generations, which were shaped as savers by different political and economic circumstances. Younger shoppers are more willing to spend. Social media is an important channel for initiating online purchases. About 45 percent of Chinese consumers use social media to discover new products, 54 percent to review and comment on products, and 25 percent to purchase directly through a social channel. Retailers and brands need to build and participate in social communities and engage with customers on social platforms. Page 2 of 5 To some extent, e-commerce is replacing shopping in physical marketplaces in China, and will comprise 42 percent of growth in private consumption by 2020, according to Boston Consulting and AliResearch. For this reason, superstores such as Walmart and Carrefour have shut down a number of stores. It sounds like there are opportunities galore for global companies that want to sell into the Chinese ecommerce market. Not so easy. China may be the worlds largest and fastest-growing e-commerce market, but it is also one of the most difficult for foreign firms to penetrate. E-commerce in China is crowded and hyper-competitive, and the country is not entirely open for online business. First, theres whats called the Great Firewall of Chinaa combination of legislation and technologies to regulate the Internet domestically in China. China blocks access to select foreign websites (such as Google, Snapchat, Facebook, Twitter, and the New York Times) and can slow down cross-border Internet traffic. China limits access to foreign information sources, blocks foreign Internet tools such as Google search and mobile apps), and requires foreign companies to adapt to domestic regulations. A new cybersecurity law that went into effect in June 2017 requires security checks on foreign companies and forces firms to store key data in China. For example, Apple works with a local Chinese company to store Chinese data from its iCloud service at a data center in southwest China. The Great Firewall has also impacted Chinas internal Internet economy by nurturing domestic companies and reducing the appeal of products from foreign Internet companies. The Great Firewall fosters trade protectionism that has allowed China to grow its own Internet giants: Tencent, Alibaba, and Baidu. Tencent is one of the worlds largest Internet and technology companies, as well as its largest and most valuable gaming and social media company. It also owns the majority of Chinas music services. Alibaba Group Holding is a multinational e-commerce, retail, Internet, AI, and technology conglomerate that pro-vides consumer-to-consumer, business-to-consumer, and business-to-business sales services via web portals, as well as electronic payment services, shopping search engines, and data-centric cloud computing services. Baidu provides Internet search services in China and internationally along with transaction services, such as Baidu Deliveries, Baidu Mobile Game, Baidu Wallet, and Baidu Maps. China has its own version of many popular foreign e-commerce businesses, such as weibo.com (Twitter), Youku Tudou (YouTube), WeChat (Facebook), and Ctrip (Orbitz and others). Alibaba has outmaneuvered eBay, and Uber had to sell its Chinese business to a local rival. The Internet behind the Great Firewall can be considered a parallel universe to the Internet that exists out-side. According to a report on Internet freedom published by Freedom House, a U.S. pro-democracy group, China ranked last among the countries of the world for Internet openness. There are costs for gaining entry to the Chinese market. Initial deposits can range from $8,000 to $25,000, annual service fees from $5,000$10,000, and commissions on sales revenue around 5%. Other costs can include being required to use approved agencies in the production of storefronts and sales information as well as guaranteed stock availability and stock location. Agency fees alone can run into many thousands of dollars. Chinese Internet filter technical requirements can make operating difficult, and may force firms to find alternatives to the services technology companies rely on outside China. It is possible to work with businesses that allow Chinese consumers to purchase from international brands, without the brand having to have a Chinese presence. For example, Xiaoshongshu (Little Red Page 3 of 5 Book) features a mobile app that allows customers to select products from key foreign markets and pay the company for them. Xiaoshongshu then sources these products for the customer. Some other points to keep in mind: Although China heavily regulates the Internet, most Chinese are not that interested in bypassing government filters to visit foreign websites such as Google or Facebook. China has an array of domestic websites to fill the void. Even when foreign websites arent blocked, Chinese competitors usually prevail because so many people are using their products that they become indispensable. Internet calling and messaging apps such as Skype and WhatsApp are accessible in China, but theyre often no substitute for Chinese products in the Chinese market. In China, Tencents WeChat app is far more popular than Skype, WhatsApp, and Slack. Once a new technology or business model appears, the Chinese can quickly adapt it to the local market. Oppo and Vivo, Chinas first and third smart-phone brands by market share in 2016, appeal to young people and residents in smaller, less-wealthy cities. Their phones look like iPhones and have many of the same features, but they cost less than half the price of an iPhone. While Oppo and Vivo have doubled their Chinese market share, Apples has fallen by 13 percent to the fourth position. To keep up with increasing demand from smaller urban and rural areas, online retailers are seeking to expand logistics infrastructure and services. For example, Cainiao, the logistics arm of Alibaba, owns 180,000 express delivery stations for the shipment of products and has recently expanded its fresh food distribution centers across China. Logistics remains a major challenge as Chinese e-commerce players attempt to reach more customers over wider geographic regions. Chinas logistics system is far from efficient, with insufficient warehouse space and trucking routes throughout the country. Chinas package-delivery business has been growing 30 per-cent annually, but thats not fast enough to keep up with demand. The scarcity of high-quality logistics providers in China often burdens e-commerce firms with late deliveries, damaged and lost parcels, slow collect-on-delivery (COD) processes, poor return procedures, and no special services such as installation or the ability to try on purchases. These inefficiencies add considerably to e-commerce operating costs and erode profit margins. Adapted from Laudon

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