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The reason why many vertical B2C platforms do not expand into department store retailing is related to the insufficient market capacity of a single vertical category, which is not enough to support the development of one or more B2C malls. Selling department store products provides "ability" for B2C malls to gain more survival space. Statistics show that in the entire B2C market, 70% is occupied by 3C products and daily necessities, while the share of book and audio-visual sales, on which dangdang.com and Amazon.cn rely for their establishment, only accounts for 18%. The market size is at most 30 billion yuan per year.

Now, through any mobile device with internet access, consumers can log in to Amazon.cn and complete the entire shopping process including customer registration, product selection, price comparison, product purchase, order confirmation, and account viewing. Although dangdang.com has captured 15% of the entire book retail market, overall, the penetration rate of online shopping in China is still in its infancy.

According to Li Guoqing, President of dangdang.com's affiliate program, currently, the growth rate of dangdang.com's department store business has far surpassed its book business, reaching 180%. Among this, the sales volume from the affiliated mall has reached parity with the self-operated part of the department store. In the fourth quarter, the sales volume of department stores accounted for 20% of the total sales volume, it will reach 25% in 2010, and more than half in 2012.

Industry insiders believe that department store retailing will be a protracted battle. Although the scale of the department store B2C market is large enough to support the development of one or more large-scale B2C enterprises, the transformation of vertical B2C to department store retailing is not an easy path. In terms of customer base, product variety, platform stickiness, supply chain integration, and infrastructure construction, the threshold for department store B2C is extremely high.

However, the result of a large number of companies competing to cross the narrow bridge of department store B2C may lead to overheating of the market. Research suggests that in the long term, the online department store sector will gradually form a dominant pattern, where the leading enterprise will occupy 30%-40% of the B2C market share, and the rest will be divided among numerous other companies.

On December 15th, Amazon.cn officially launched its "palm-sized mobile version" and a real-time memory search iPhone plug-in. The launch of Palm Amazon signifies that Amazon.cn is beginning to venture into mobile e-commerce. As internet users' online activities gradually shift from basic and entertainment-oriented uses to diverse and business-oriented uses, China's B2C online shopping market is experiencing an unprecedented explosive growth trend.

Wang Hanhua, President of Amazon.cn, stated: "The next trend in e-commerce is mobile e-commerce. The launch of Palm Amazon will make it more convenient for consumers to browse and purchase products from Amazon.cn. Moreover, for iPhone users, memory search will help them easily track products they are interested in, allowing them to quickly query product information on Amazon.cn through photos."

In China, dangdang.com was one of the earlier companies to realize this. As early as 2004, dangdang began expanding into the department store sector, launching a department store channel outside its self-operated business. Apart from some carefully selected high-margin, easy-to-store, and easy-to-deliver department store categories that continue to be self-operated, the rest are handed over to merchants who have moved in, with dangdang collecting payments on their behalf and confirming payment before merchants ship goods to customers.

Li Guoqing believes that there should be no restrictions on the product categories for the B2C online mall business model. Customers want everything, but companies cannot operate everything themselves; they must consider profitability. For low-margin categories unsuitable for self-operation, they firmly refrain from doing so and instead hand them over to affiliated merchants. This way, they can solve the dilemma between scale and profitability, expanding their scale while maintaining financial balance.

However, prior to 2008, given that most internet users had not yet developed the habit of online department store shopping, dangdang's department store business was only experimental in nature. It wasn't until July-August 2008 that dangdang reorganized its store-in-store. According to research data from iResearch Consulting, Nielsen, and other survey companies, dangdang.com currently leads in brand influence and market performance among B2C shopping websites.

2009 is destined to become the "year of department stores" for B2C e-commerce. Stimulated by this, mainstream Chinese B2C companies are accelerating their expansion into comprehensive online shopping malls. Besides dangdang.com and Amazon.cn, which started as online bookstores and entered the department store sector earlier, late-starting vertical B2C malls like JD.com, Redbaby, and Newegg also fully expand their online shopping categories, speeding up their transformation into comprehensive malls in hopes of driving sales growth through category expansion.

Facing paradigm shifts, B2C enters the "Year of Department Stores".

According to iResearch's statistical data, the proportion of China's online shopping transaction amount to the total retail sales of consumer goods is only 1.15%, which is significantly lower compared to developed countries like the USA where online transactions account for 4% of total retail sales. However, iResearch predicts that with the maturity of various supporting links for online shopping, the proportion of online shopping scale to total social consumer goods sales will rapidly increase in the future. At that time, China's department store B2C market will give birth to its own Walmart and Amazon.

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