E-Commerce in China

E-Commerce in China

10 key factors of success for E-Commerce in China

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E-commerce in China is estimated to exceed 5000 billion RMB in 2015. With 243 million of e-shoppers and an annual increase of 30 million new users, China E-commerce is taking more and more share in the global e-commerce market.

What are the key factors for E-Commerce business in China ?

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E-Commerce China

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E-Commerce in China

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1 – Localization in China

Website hosted outside of mainland China takes a VERY long time to charge.

=> A good Ecommerce website in China requires host in China. And an ICP certificate is also very important in order to have less chance to be censured by the government. All the successful ecommerce website in China are host in China with ICP.

A website hosted in China is better as the Chinese search engines is Baidu . Nevertheless some negative feedbacks exist about Chinese hosts regarding instability problems or suspected to provide IPs to the governments or to sell IP to competitors.

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Ecommerce China

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2 – Logistic

One challenge is to be able to deliver products to the entire country. Delivery is not an easy work to do, all the companies in the field are fighting over prices, profits are low. With an average 3-4 yuans margin in this sector (according to the Association of Logistics China) it remains a challenge for many companies.

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China logistics

 

3 – The price

Internet in China today almost equals to a place where consumers can find the lowest prices. Chinese consumers will compare a large number of websites before making a choice price oriented.

Solutions: bring prices beating all competitors on a unique product in the whole country (exclusive offer).

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4 – Gaining confidence of cyber-consumers

Chinese consumers remain very cautious due to the number of scandals in the country. Consumers take trust rating as the KPI on Taobao is the best example of it.

It is important for a website to work on its image, to gain the trust of users. Cross-media campaigns are often useful to gain notoriety.

For example VANCL used Hanhan as brand ambassador and have launched classic advertising campaigns (www.VANCL.com)

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VANCL

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5 – Your website should respect Chinese standards

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Chinese buyers do not use Paypal but Alipay or Tenpay. Concerning delivery for small amounts in China many websites make it possible to pay at the reception.

The design of the website also have some convention to follow. For instance a Chinese website will use a smaller typography, more informations on one page, with a larger variations in color codes.

Here is the website of Yoda a leader in the field of e-commerce for cosmetics:

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Yoda

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It is preferable not to copy and paste a Western version of your website which will probably not appeal to people who already accustomed to the Chinese pattern of design.

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6 – A streamlined purchase process

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3 steps represents an average for most of Chinese e-commerce websites.

A website that takes more than 5 steps before buying is considered too complex by Chinese netizens. Display time of websites in China is much longer than what we know in the West, so the less pages are, the better for Chinese netizen. With the rapid development of China’s E-Commerce , streamlining the purchasing process remains an objective.

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tunnel machine purchase

 

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7 – How to increase your conversion rate ?

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Professional photos can improve the conversion rate in B to C business (and even in B to B).

Videos are necessary to show the features of your products. Chinese are very pragmatics.

Descriptive texts are needed to foster consumers’ awareness. For example, in the field of wine, the best performing sites are those that explain the history of the wine with tasting guides.

Please check the follwoing example: a Tmall Shop designed for Afu Mythical:

 

Afu

 

8 – Promotion

 

Chinese people in real life have a habit of buying by negotiating price. Many Chinese the price without bargain is an unfavorable deal. We find this phenomenon even more popular online.

For example, “the single day” organized by Taobao proposed discounts that have attracted millions of orders per day.

 

reduction

 

9 – Visibility

 

The most difficult tasks for a website is to attract visitors. A good Baidu referencing is an important tool to attract visitors. This target can be achieved via a good SEO or SEM campaign.

 

What are the main processes to increase your traffic?

SEM, Search Engine Marketing campaigns ie Pay per click are effective in some areas and less in others. For Baidu, these campaigns have the advantage to make you appear in the 11 first natural results. But the price of the click can be very high for certain sectors. For instance you may have to pay 25Rmb (3 €) for keywords such as ” buy wine “or” cosmetic “.

SEO: the best way to gain visitors economically, and therefore to foster your sales. SEO in China is mainly on Baidu (80%) and a little on Google.com.hk .

 

SEO MArketing

 

Social Networks: community management is another tool to attract traffic for your website. It’s a good way to build a customer loyalty. Once a site is running and generate sales, a good integration of social networks will be very interesting.

 

10 – Instant messaging

Very few Chinese use email. Indeed they prefer instant messaging to communicate directly with the salesman. Generally, Chinese websites include QQ messaging or click to chat’ systems.

 

QQ post

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In China SMS or phone calls are frequently used to confirm an order, when in western countries the email remains the most widely used communication tool.

Chinese people often have various email addresses they do not consult. Mass emailing in China is rather inefficient. On the contrary promotional campaigns sent on mobile shows an extraordinary efficiency nowadays.

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Conclusion: E-commerce in 2012 generated more than 1000 billion yuan of transactions (45% for B2C and 55% for B2B) (source: iResearch) and will remain a huge market for western brands.

 

Chinese shopper

 

If you are interested in this, don’t hesitate to contact me for more information.

 

Marketing-to-china

Written by Olivier

Olivier, Passionnated about Marketing and Chine. Already 30 years old and 6 years spending in China. I share my analysis about China, for almost 4 years via my french Blog marketing-chine.com.

16 Comments

  1. Tania · March 30, 2013

    Hello,
    Ecommerce is a very promicing Market, yes taobao is very popular and cost effective now, but later website will become very interesting for companies.
    nowadays most of foreign brands have their own website , and Chinese customers will quickly order to their eshop 😉

  2. a lord · April 29, 2013

    Great interesting articles

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  4. Marcel · June 3, 2013

    Very Interesting article… I will contact you for my next project Olivier.

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  6. Boryana Kulinska · August 16, 2013

    Can you send me more informationa about the topic, especially if you have more statistic and anlysis about the success of Alibaba.com

  7. Pat · October 13, 2013

    A top article for you, that all the Marketing Manager should read when they come in China.

  8. In London · February 1, 2014

    hi Marketingtochina team,
    I’d like to thank U for the efforts you’ve put in penning this website.
    I’m hoping to view the same high-grade content from you

    In truth, your writting has inspired me to get my own blog
    😉

  9. Ted LI · September 10, 2014

    Thank you for this information, you are the best website that I know about Chinese online market.
    I work for a website want to sell lingerie online. I already send you all the information, hope I can meet you and get more advices from you guys.

  10. Cordite · October 22, 2014

    very successfull article , i like it

  11. laowai · April 30, 2015

    There is something that you laowai should understand about ecommerce or business in China, that people laugh because they are joyful. Children laugh in seeing you mostly because they are happy to see someone so different from what they regularly see (and probably your white skin, big eyes and high level nose are considered to be beautiful, even though in your own country you are considered to be a looser). Sure in Paris New york and some bigger cities in Europe , this laugh is considered to be “indiscreet” and “mal éduqué”, but in rural France, I had some pleasant exchange of laughters with people.
    With children, it’s easier everywhere to exchange kind laughters wherever I went in the world, because they are just pure and natural (as a Chinese ?).
    For “well educated adults” from western world before going to China, the first thing to learn is to be natural and to throw away your old “codes of the good society”.

  12. Anniek · January 26, 2016

    Hi Oliver,

    For my research into marketing meat in China I have some questions. What is the easiest way to contact you?

  13. Mastizaade Cast · January 30, 2016

    We’re a bunch of volunteers and starting a new scheme in our community.

    Your site provided us with useful information to work on. You have done
    an impressive process and our whole neighborhood will likely be grateful to you.

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