Commerce is changing in China at rates not seen in any other market. Nowadays, the country is the world’s largest e-commerce market. The scale that both JD.com and Alibaba have now, ensures their ability to offer customers a retail experience that is specific to China. The fact is that traditional retail has not evolved with the speed at which the consumption change has.
Thus, individual entrepreneur or international brands need to learn the way to market and to sell in China, which is unique.
First, let us take an overview of the Chinese market’s situation.
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E-commerce is a primary driver of China’s retail sales growth
Nowadays, the e-commerce sector in China is and will remain a major driver of economic growth as internet penetration and smartphone ownership continue to increase. “E-commerce is weathering the overall economic slowdown better than any other sector, and overall retail is still growing quite a lot faster than GDP,” said Mark Tanner, managing director of China Skinny, a Shanghai-based research agency.
We have to notice that Mobile commerce, or m-commerce, account for nearly 2/3 of retail e-commerce sales in China. Experts calculated that China’s m-commerce sector is more than four times bigger by sales value than that of the US.
Even if MasterCard Worldwide “2014 Mobile Shopping Survey: Asia-Pacific Edition” suggested that mobile phone internet penetration has reached a saturation point among China’s internet users, with some 98.6% having mobile web access, we have to underline that there is still a huge part of China’s population who are not up to date with this new way to shop. The e-commerce is now well-developed in Chinese big cities while in some smaller ones, even the delivery service is not effective as of now. However, China is turning towards its low-tier cities to help them catch up with the country’s development. In other words, this will open a new stage and bring new prospects for the e-commerce’s expansion in China.
The change in Chinese’s consumption habit
In fact, nowadays Chinese consumers are very connected on their smartphone and a lot of companies adapted their services to mobile phones, through apps or mini-programs on WeChat. They can fill their every day’s need only through a smartphone. In fact, it allows them to pay their bill, to buy products, to order foods, or book online for any activities (movie, beauty care, sports activity etc.). They also spend a lot of time on their mobile to keep in touch with their friends on entertaining apps and also on e-commerce platforms.
Chinese consumers are more willing to purchase online because of the convenience and the greater range of available items on e-commerce platforms. Nowadays, Chinese consumers have a huge appetite for foreign products and e-commerce platforms have become the channels of choices for Chinese shoppers looking to purchase such items.
That’s why many brands and companies start to care about their online presence, leveraging social media, being on apps for entertainment, because most of Chinese people are online. it is the path to reach and catch these consumers.
What you should know before launching your business in China
A high work’ skill
Chinese entrepreneurs are following the 996 plan for staff and themselves. They work from 9 in the morning to 9 at night, 6 days a week. It may seem like a recipe for burn-out, but these employees are able to move at speed not seen anywhere else in the world.
A market dominated by 2 major e-commerce platforms
Chinese people spend a lot of time online and like to check the authenticity of a product on the internet before buying it. The most popular and well-known e-commerce platforms in China are with no doubt Tmall and JD.
Tmall was created by Jack Ma, the founder of Alibaba. This e-commerce giant holds many other innovative companies including the Alipay payment application. It is well named because it can be compared to a large “mall” (a shopping mall) containing many different stores. However, each brand still has control of its store. In this way, Jack Ma wanted to offer the consumer the opportunity to have full transparency about the supplier and give responsibility to him.
JD.com, on the other hand, would be seen as a simple store offering a lot of products, as JD takes care of everything. So, this option is very convenient! Because once your products are exchanged with JD, your role ends there. JD will buy the product in bulk and take care of the remaining tasks.
Actually, Taobao is also a major player in the e-commerce sector in China, but it’s mostly for local products while JD and Tmall are most adapted to international brands. Also, Chineses have more faith in JD and Tmall for the product’s quality and authenticity.
How to sell in China?
If you are a company that wants to sell its products in China, E-commerce remains a very effective and convenient solution for that.
- Having your website in only one language is a rather risky bet to take. The e-commerce platforms in China are so large that they will easily block the light to your website.
- Tmall holds more than 50% of the market and JD not far from 25%. So it’s hard to compete with these giants! Moreover, the Chinese will not spend their money without having confidence in the product and the website. In this way, offering your products on the websites of these giants would give you the expected credibility.
Our agency offers a complete range of service for e-commerce marketers from e-commerce consulting to digital marketing operations. We have developed many successful e-commerce projects because we know how to effectively promote your e-commerce business in China by using the latest digital tools. Do not hesitate to contact us for more information.
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