All about e-commerce in China

Chinese spend about 4 hours on their phones for social networking and for shopping. In fact, consumers are nearly guided to do everything on it China has become, over these years of development, a very connected society. Digitalization is gaining more and more consumers, so brands, have to adapt to this change. This article will provide you with essential information about e-commerce in China, mobile payment, online strategies, and KOLs (Key opinion leaders).

Mobile phone has taken the place of wallet in China

China is the world’s largest country that uses mobile payment. Mobile payment has clearly revolutionized the way to consume in China. Any type of transaction can be made through mobile (ticket purchase, telephone fees, house rent, shopping, restaurant …). We are talking about “Cashless Society” to describe the current situation of China, most Chinese in the first and second-tier cities don’t use cash anymore.

The advantage is everything becomes easier and goes faster. It is possible to order at any time, and everywhere (even for a beverage). The need and desire of consumption can be satisfied almost instantaneously because the service of delivery and product exchange in China is very efficient. From the little fruit merchant to the big shopping malls, all have adopted this payment system.

As a result, the rate of consumption in China reached and kept a high level. The fact to purchase even became a habit.

Mobile payment market in China : WeChat & Alipay

WeChat Pay is a mobile payment method included in the Wechat platform, a multi-function application, widely used in China which is even expanding abroad. For Alipay, as it comes from the group Alibaba Mayun, it gives him an important market share. Alibaba Group is present in many sectors in China (such as e-commerce, online games, music industry, online computing…)  consumers are led to use Alipay on many occasions. WeChat Pay and Alipay have respectively 48% and 52% of market share.

Applications are developing their own payment way

To get rid of WeChat Pay and Alipay’s influence, a lot of applications are setting up their own payment system. For U Zhangghui and MeiriYouxian, two popular shopping apps, they propose users to recharge money on their account directly through their bank account. In this way, at the time of payment, besides paying via WeChat or Alipay, they can choose to pay via their application account. Of course, this comes with benefits, like coupon or reduction.

How The e-commerce can boost sales ?

Online and  Offline Stores allow organizing products in an elaborate way to attract the eye of the consumer and to arouse the desire to buy. Then, we could wonder if e-commerce will be able to have this possibility, or even doubt its effectiveness. In China, no doubt e-commerce is certainly THE way to sell.

E-commerce is a more accessible shopping channel for consumers. Because of the high revenue, the Chinese are often seeking to maximize their budget. E-commerce offers them the opportunity to acquire any kind of products and services by staying where they are.

Read also: China eCommerce Guide

E-Commerce provides a lot of advantages for consumers

E-commerce platforms seek to attract the largest number of users and consumers. For this, it is common for companies behind these platforms to offer discount coupons to consumers. For example, on Vip.com (the application “Wei pin hui” in Chinese) there are often discounts like for 199 yuan of purchase on a selection of items, a reduction of 100 yuan will be applied. It is possible to combine products of different brands for this type of reduction. In this way, the consumer navigates through the platform and goes deeper to search for products. He is guided to discover products from different brands and invited to enter this brand’s store established on the application. To benefit from the best online deals, consumers have to invest more time on these platforms.

E-commerce is present in different ways in activities and events. For example, Victoria’s Secret had set up an e-commerce system during its annual parade. While users watched the parade online, they could order the products presented on the show directly via a juxtaposed platform.

E-reputation is  the main concern of brands

By the way, consumers are less confronted by salespersons in their shopping journey. They choose and prefer, to learn information from the internet forums before their purchase. E-reputation has become an essential element for brands because Chinese consumers take into account the comments of other consumers.

Moreover, competition is quite important in many sectors in China. It is strongly advised to the brands to manage an online presence in their strategy. To see things on the bright side, e-reputation can also contribute to the brand’s advantage. For brands that are less-known in China, being recommended on the web, or being visible can generate a lot of leads and customers.

Today, it is not only consumers who go to the products, products are also brought in front of them.

Different kinds of e-commerce platforms in China

The e-commerce platforms are numerous and tend to be refined more and more in China.

In the food sector

Restaurants choose to collaborate with delivery applications: E le Ma, Meituan, Dianping etc. They also offer discount coupons to their users in order to attract and keep them on their platform. In fact, consumers are turning more naturally to these applications, instead of going to the restaurant’s website. These applications bring a lot of choices and standardize the way to order for all restaurants.

Daily products sector

For everyday products, we can find two main types of e-commerce platforms: there are applications like Taobao, Pingduoduo on which we can find a very wide range of products. On the other hand, for imported products, platforms like Kaola.com, Tianmao, JD.com are the most used among Chinese consumers (they trust products sold on these platforms).

Clothes and wearing sector

Some apps have a better reputation among consumers than others. Weipinhui (vipshop.com) is known for selling better quality products and providing good after-sales services. The most popular is Xiaohongshu in China, a platform that combines social media function and e-commerce. More information about it is here.

Kols collabore with brands in China

Kols and Wanghong, who are them ?

In China, Key influence leaders (KOLs) also include wanghong (网 红). They are well-known persons on the net. How? through a lot of possibilities. People can become Wanghong because they are fun because they were part of a publication that made a buzz on the internet, because they created some interesting content, or even only because they have a good appearance. For example, some persons have become known by publishing comic videos through entertainment apps and social networks, others by their singing talent (汪 苏 泷 is a singer today in China, and he started on the web).

How can kols be helpful for commercial activity ?

These influencers are highly sought after by brands. As they usually have a lot of followers on the internet, brands can work with them to maximize the efficiency of their promotion but also quickly gain consumers’ trust in the Chinese market. Many Wanghong also has their own business (often an online store) that runs through their community of fans. Most of the time, the ones who are the most affected by KOLs. They are the most connected among Chinese online users and they represent followers of the latest trends. Active, but also responsive, these people tend to share all the interesting content in their network, including bad buzz.

Being Wanghong has almost become a profession in China. It is becoming more difficult for companies to find the right KOL. On the one hand, the person chosen must suit the image of the brand and what the company wants to achieve in its promotion. On the other hand, the most influential KOLs have also a higher price. The investment does not always guarantee expected results. It is important to clearly define the objectives of the collaboration and to find the right person.

Hoping that this article gave you some inspiration for the business in China, thank you for your reading. Now, if you have a project to promote in China, do not hesitate to contact Gentlemen Marketing Agency;). We are a digital marketing agency specializing in the Chinese market, where e-commerce is part of our know-how