Competition from China puts Swiss online retailers under pressure
Published: Wednesday, Sep 25th 2024, 12:10
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Chinese online retailers such as Temu, Shein and AliExpress are increasingly causing problems for Swiss retailers. They are trying to stand out from the growing competition by offering better products and services. The topic of AI is also slowly making its way into the industry.
Swiss retailers are facing increasing price and cost pressure from Chinese shopping platforms, as shown by the "Online Retailer Survey" published by the ZHAW School of Management and Law and the FHNW on Wednesday. This development was accelerated once again by the market entry of Chinese provider Temu in Switzerland in spring 2023.
Two out of five Swiss online retailers already state that they are affected by increased competition from Asian platforms. In particular, these providers would put pressure on prices (26%), margins (14%) and sales (12%).
According to the survey, Swiss online retailers want to set themselves apart from their low-cost competitors from China with exclusive products, quality, branding and good customer service. They also try to score points with Swiss customers with fast delivery or a high level of returns friendliness.
Despite the challenges, more than half of the online store operators surveyed expect sales to increase again in 2024. After the coronavirus boom, there was still a small dip in sales in 2023. Only 18% of the companies surveyed expect sales to fall.
Increasing use of AI in e-commerce
Artificial intelligence (AI) is also playing an increasingly important role for Swiss online retailers. According to the study, half of the retailers surveyed already use AI tools such as ChatGPT for text creation or DeepL for translations. Above all, they hope to save time and money.
According to the respondents, texts written by AI increase the quality of information and products, as well as the reach on Google. However, only one in ten companies surveyed uses AI to personalize content or offers.
However, AI technology also poses problems for retailers. The biggest challenge is the lack of know-how and expertise when implementing AI in business processes and identifying areas of application. It is also difficult to maintain an overview due to the rapid pace of technological development.
The online retailer survey was conducted for the seventh time. A total of 624 online stores took part in the survey, 516 of which were from Switzerland. A quarter of the respondents were pure online retailers. Around half of them also operated a retail store in addition to their online store.
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