5 facts that you need to know about Cross-border ecommerce in China
For many companies all around the world, the growth run is existential. That is why emergent countries represent real opportunities for them. The point is to maintain growth and benefits also.
If we take a look at China, it represents a good opportunity for foreign companies’ goals, however, it is crucial how to know how it works and what is the best way to export your business in China.
The Chinese Context
Nowadays the Chinese e-business market has become the most important and biggest in the world. It becomes so important that it is growing faster than the Gross Domestic Product (GDP). The GDP of China between 2014 and 2015 was about 10 355 billion of dollars and a growth of +6.7%. More than half of the Chinese population is connected to the internet and 81% of them have bought products online in 2015 and 35% bought on cross-border dedicated platforms in order to access foreign merchant’s products.
Also, the Chinese government took part in e-commerce Cross-Border. A new tax took effect on the 8th of april and it concerned businesses and traditional retailers in order to improve the market and create a fair competition mechanism.
Chinese People love foreign countries
This is well-known: Chinese consumers love luxury products, especially those aged 18 to 30. Young consumers want quality services and products. A huge challenge for their Western neighbors!
With the evolution of the middle and upper classes in China, consumers now need products that are defined by 3 characteristics: Authenticity, a positive buying experience, and a good balance between price and quality. That is why they usually are attracted by this kind of product and especially foreign ones. Chinese like products for the United States, Great Britain, Japan, Hong Kong, Canada, Germany, Australia, and France also. For example, the product « Made in France » is a reference for luxury and superior quality.
What kind of foreign products have the Chinese’s attention?
After different sanitary scandals, the Chinese became more and more aware that their life could be in danger. Cases like dead ^pigs sold as fresh meat, the gutter oil, explosive watermelon after abuse of forchlorfenuron, fake mantou out of date, milk with nitrites, clenbuterol pork, milk with melanine… all this happened and scared Chinese people.
That is why consumers know what they do not want and what they want, so behaviors and minds changed.
Since 2015, different categories of new products had emerged and made their way into the Chinese heart like culinary books, electronic products, and even toys. However, there are 3 others that are top. Cosmetics, baby stuff, and clothes are those products that the Chinese love.
The E-commerce Cross Border, is a good way to minimize costs and risks
With the existing rules, the government’s omnipresence and the high competition present in China could turn into a disaster. That is why more and more companies use e-business cross-border where it is easier to be implemented and also to sell products in China without investing too many resources in that « expedition ».
Since the creation of the Free Trade Zone in China, companies that are established there benefit from better import procedures and taxes. Today there are approximately 5,000 platforms on the Chinese market and each has its own specifics: bulk purchase, social shopping, focus on small brands or on outlets…
With platforms like Tmall Global, JD.com, KJT.com, Sasa.com, or Ymatou, foreign brands can sell their products directly to consumers and through this process, they will expand their influence. Using E-commerce cross-border to be present in China is a real opportunity. Benchmark and User Experience need to be done at the beginning of that process in order to be familiar with the market and easily penetrate it.
The Chinese consumers behaviors to understand
Chinese have specific behavior which your different that foreign companies might do not know.
First, they are online!
There is also a difference in the platforms the Chinese and Westerns utilize, in particular the Social Networking Systems. The Chinese use WeChat, Weibo, and Youku, whereas the Western use Facebook, Twitter, and YouTube. Also, there is a difference in the way Chinese users and Western users react to content such as ads. For example, Western netizens find online ads on Social Networks extremely distasteful, whereas Chinese find online advertising more interesting.
And second, they use their smartphone differently than Western consumers.
Whenever online buyers need to talk to one of the merchants present on the Tmall platform, they can make their inquiries directly to them. An instant messaging application was developed by Alibaba for that purpose: AliWangWang. By using it, buyers can chat with Tmall sellers before making their purchase, in order to learn more about the products they are interested in and even engage in bargaining. Also, transactions on Tmall.com for example, are made with the Alipay payment system. Alipay, China’s leading third-party Internet payment solution was launched by Alibaba Group. Users can either use their domestic bank cards or scan a QR code on the webpage in order to pay a bill, their shop to the mall…
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