On this year’s Singles’ Day, Tmall’s transaction volume hit RMB 10 billion ($1.6 billion) in just 38 minutes, continuing eCommerce’s upward trend. In 2013, the total GMV of Tmall and Taobao reached RMB 1.54 trillion ($249 billion)and Alibaba’s rival JD.com achieved a total GMV of RMB125.5 billion ($20.3 billion). In contrast, Beijing Shin Kong Place, China’s top one traditional retailer, had just RMB7.5 billion ($1.2 billion) in total sales revenue in 2013.In 2014, the growth rate of China’s top 100 retail chains has continued to decline and is now at its lowest point in the past four years. The data above indicates that traditional retailers face a cold winter struggling to fight off both the economic downturn and the success of eCommerce. So how can traditional retailers compete against eCommerce players?

Compared with e-tailers, traditional retailers’ disadvantages lie in their small scale, low operational efficiency, and relative lack of customer interaction. Now that it’s become obvious just how significantly online retail is encroaching upon offline, China’s major traditional retailers have started to dip their toes into online business with limited multichannel trials. But such baby steps won’t help them catch up to pure eCommerce players. Traditional retailers are only using online sales as a discrete sales channel; this buries any advantages they have over eCommerce players and doesn’t allow them to make full use of the Internet to achieve their goals. Thus, I think that there are two important trends that traditional retailers must be aware of and fully capitalize on:

§  Omnichannel sales will become the motor of the retail business. Traditional retailers can leverage established advantages such as brand awareness, a loyal customer base, and supply chain management capabilities to develop omnichannel sales and establish a seamless connection between online and offline to help develop offline sales. They can launch functionality like site-to-store, store-to-site, in-store returns, and onsite service to increase sales opportunities and customer engagement. The fusion of online and offline can vastly improve the shopping experience and win back customers.

§  Mobile shopping will rapidly permeate the retail market. Increasing retail competition, the rapid growth of labor costs, and untargeted marketing investments with low ROI have made the mobile Internet into the new standard-bearer for digital retail marketing. Mobile Internet features such as flexibility, convenience, and “anytime, anywhere” availability make mobile shopping more accessible; mobile can serve as an additional channel in which to engage with customers and influence sales. mCommerce in China has grown much faster than eCommerce in the past few years, and the rapidly developing mobile Internet will bring even more new opportunities to retail businesses.

To help eBusiness professionals of traditional retailers understand the impact of eCommerce in China and transform to stay competitive, I recently published a report on the Chinese retail market landscape. This report analyzes the implications of the changing market environment for retailers in depth and identifies the capabilities that they must develop if they are to seize new opportunities.