In 2019, E-commerce in China will reach unprecedented levels, making China the undisputed leader in this market far ahead of Europe and the United States, its main competitor.
With a growth of nearly 24% in 2018 and rather promising forecasts for 2020, $6 trillion, China has become the new el Dorado of digital and digital commerce in which it has become important to invest.
Developing its activity in E-commerce in China is therefore essential for anyone who wants to conquer the world later on, a novice in this field, or is simply curious, we can provide you with the information you need.
The Chinese e-commerce market surpasses all the others in terms of importance, size, and power. Indeed, the Chinese population has been able to adapt fairly quickly to the various changes and has been able to adopt digital consumption fairly quickly. More than a third of sales will be made online for an average budget allocated to these expenses of about $2500 per person for all 800 million users. Although most of these users are of the millennial generation, more comfortable with this kind of dematerialized technology, the emergence over the years of a middle class has considerably increased the number of users who can then consume at their convenience.
To want to invest in the Chinese market is above all to want to dematerialize as much as possible and produce sufficient quantities to satisfy all Chinese demand. Your objective will therefore be above all to have enough power to be able to penetrate the market as well as possible, but also to be able to remain stable and develop year after year. As the evolution is exponential and without concrete limits, a sustainable activity can thus generate significant benefits and attract a maximum number of customers in a short period of time in the same way as Pinduoduo.
The dazzling rise of E-commerce
How did E-commerce become so widespread in China? Quite simply because it has become in a short time the easiest way to buy without having to move from home, allowing a considerable time optimization. In addition, both small provinces and large cities can have access to the same type of asset, avoiding the same demographic inequalities on certain products.
In addition, the speed of delivery and the possibility of paying via the Alipay or Wechat pay platforms greatly simplifies the purchasing process. The possibility of being able to compare and therefore have the choice was a springboard for E-commerce in China allowing the buyer to be in control of his consumption and not to be overtaken by it.
The way of consuming has also changed, consumers have become more aware of their environment and are more informed about it, thus consuming in a more intelligent way with the impact of a clear increase in consumption.
By the end of 2019, E-commerce in China will represent 55.8% of global sales.
In addition, Chinese people use their smartphones every day on platforms like Taobao to buy the products they need. Others are used as Wechat which is the most reputable platform currently and the most important platform in the making with nearly 800 million users spending an average of 25 hours a week there. This massive use has the effect of considerably increasing the sales volume, an increase of 32% between 2016 and 2007.
What opportunities for your business?
You probably wonder why China and not the US for example.
Quite simply because the Chinese market is destined to become a future world retail leader. With currently 35% of sales made online for a total of 5600 billion dollars against 10% in the United States, China has a considerable lead.
In addition, online commerce is strongly supported by the government, which makes it a major asset for optimal implementation and development.
Indeed, China is not only the market that has the most volume but also the one that has the most dynamism and innovates the most. This creates an atmosphere conducive to innovation and the development of any type of activity.
Another major asset is, as mentioned above, the emergence of the middle class, which has a substantial average wallet whose only use is consumption. In addition, the democratization of the Internet throughout the country makes it possible to reach populations in the most remote parts of the country. The difference that can cause slight damage remains the non-loyalty of customers who are constantly turning to offers that are all more attractive than each other. Nevertheless, with good management of your Brand image, you will be able to claim not to be on the margins of your competitors and to be in constant evolution.
You must, therefore, adapt your development by considering E-commerce not as a simple tool but as an integral part of the lifestyle in China.
This will allow you to approach the market more calmly and avoid potential mistakes that could drive you out of it.
What future of China?
In the long term, China is moving towards an O2O system, which is already highly developed at the moment. In addition, there is a significant reduction in physical points of sale for certain goods or services that are completely dematerialized. An example of a successful O2O store in China is Hema, for example, which has physical points but the consumer orders online and is delivered in less than 30 minutes, guaranteeing the freshness and quality of the products.
Indeed, for any type of service, whether it is food or simply for personal consumption, the Chinese are used to using the different platforms available to them in order to satisfy this type of need at any time.
The difference in culture towards the buyer has an equally strong impact in China. Indeed, by taking a platform like Amazon for example, it has been shown that on average people spend 10 minutes on it, and a platform like Ali baba has a 3 times longer passage time. Why such a difference? Quite simply because the platform adapts to the customer and offers similar offers based on its search history. In addition, in some cases, mini-games are offered or discounts are offered to make the customer stay longer.
Although not very developed, the western part of China tends to be affected by the phenomenon of E-commerce, due to their optimal use of mobile phones.
Some services tend to evolve in the same as the delivery service, JDmall develops a drone delivery service.
China, therefore, has a significant advantage over other countries that can, if used properly, make your business prosper.
In addition to this, there is a collaboration between companies that want to set up and those that already exist, this different way of thinking from that of Europe or the United States thus pushes us to work together to develop bigger projects rather than wanting to oust and find ourselves alone if the project does not work.
Does competition allow for an opening？
As mentioned earlier, companies in China do not wage war on each other in the same way as elsewhere and prefer to work together rather than destroy each other. Moreover, Chinese people rarely use brand platforms to make their purchases, going directly through platforms such as JD Online which includes all types of products.
So your objective when coming to China is above all to have access to this platform in order to sell your business as well as possible and diversify it without becoming prejudicial to others. By developing your awning on Tmall you will be able to satisfy your demand and achieve your objectives.
The Chinese market is therefore open to any type of service or product sale insofar as the latter are offered via platforms that respect the expectations of the Chinese and use appropriate advertising to attract them to your brand rather than another.
Finally, because of the wide range of Chinese people facing, you will have to improve your image and make a name for yourself in order to become a must, not having to overcome the competition by other means than those you already have. In other words, you are your own ambassador.
How can we help you？
As a marketing & e-commerce agency and expert in our field, we are able to provide you with advice that is consistent with your business.
There are different ways for you to enter the Chinese market.
First of all, it is important to have an image in China, that is, that the Chinese know you, know what you do, and who you are. To do this we can make sure that we spread and promote your brand through different social platforms such as Weibo. The use of forums, Q/A, and notices may allow you to appear on search engines such as Baidu and thus have a significant gain of visibility.
Moreover, if you really want to penetrate the market and have credibility in China, it is necessary to have a site in Chinese.
- our website: marketingtochina.com
Why is it so important?
Quite simply because search engines like Baidu only refer to sites written all in Chinese. This is part of the first part of your arrival in China allowing you to draw attention to yourself and your product.
This newly created name and reputation will allow you to have credibility with distributors to resell your products but also allow you to do without via Chinese platforms, much more efficiently.
These allow you to deliver in less than 2 days throughout the country, compared to at least 15 via cross-boarding platforms without any locations in the country.
As prices between all platforms are almost similar and the Chinese tend to constantly compare prices, without good Brand Awareness, i.e. as mentioned above, how you are perceived it will be difficult for you to be profitable or make profits.
As these platforms are not free of charge, it is crucial for you to have a sufficient Conversion Rate (visit/sale ratio) to be profitable.
How to maintain customer loyalty?
In order to build loyalty among potential Chinese customers, you must maintain a link with them via exchange platforms such as Wechat for example. You have the possibility to have several types of accounts depending on your activity. Through these accounts, you will have the possibility to post and share with the people who subscribe to them, daily or weekly in order to inform them about new projects or products.
You can also appear on different types of platforms to sell your products but the more specialized the platform is in a domain, the more loyal customers you will have who will come for your product because the quality and feedback will be to your advantage.
In addition, we recommend that you propose personalized offers based on the customer’s previous purchases and constantly renew your offers. For what reasons? To stimulate the consumer and make your brand attractive, take into account the choices of its customers. The feedback will allow you to attract new people and develop consistently. You will then become a trusted and credible brand in China and will be a major player in the development of Chinese e-commerce.
To sum up, Over the past year, E-commerce in China has taken a turning point, making this country the future number 1 far ahead of the others.
It is, therefore, more than interesting to enter this still open market in order to establish your business.
There are many opportunities and can become very lucrative if they are exploited in the right way.
The country is different with different mentalities and customs it may not be easy to come and settle without solid knowledge or help.
That’s why as a marketing agency we can help you to have the opportunity to succeed, thanks to our expertise we know what mistakes to avoid and how to optimize your image in order to have enough visibility.
You are wondering how to get to China and what are the requirements or how the country is in terms of business.
Contact us, and we will be happy to help you and help you realize your dreams of diversifying into the future Global E-commerce platform.
From our past experience, we have the experience required to establish all types of activities in China, we have expertise in the Chinese market to help you avoid mistakes.
Read also:
- Latest E-Commerce trends in China
- E-Commerce strategy in China
- About Kaola
- Questions about Crossborder in China
- Sell on WeChat
- Guide to Tmall Global