Attracting every day thousands of entrepreneurs and companies from all four corners of the world, China is one of the most promising markets worldwide. With a population of almost 1.4 billion people, China’s rapidly rising wages have contributed to a growth in consumption and an increasing purchasing power. The development of various new technologies-related industries, and China’s digitalization greatly contributed to the success of the most lucrative industry in China: E-commerce. So, whether you have a small business or a large-scale company, you might be interested in doing e-commerce in China. This article will go through the basics of China’s e-commerce platforms and will give you as well some tips and advice on how to successfully enter the Chinese market.
- 1 Top 5 things to know before entering the Chinese e-commerce market
- 2 What are the most popular Chinese e-commerce platforms?
- 3 How to succeed on Chinese e-commerce platforms? eReputation
- 4 Contact us to get started on China’s e-commerce platforms
- 5 Some of our eCommerce case studies
- 6 Get in touch
Top 5 things to know before entering the Chinese e-commerce market
E-commerce in China: A tough competition
In recent years, being on e-commerce platforms has become a must-have for both Chinese and foreign companies that are ready to invest a lot of money in order to be on the most popular e-commerce platforms such as Tmall or JD.com. In fact, the majority of the Chinese population regularly purchases products online, as it is easier and more convenient.
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As we can see from this graphic, there were already 782.41 million online shoppers as of 2020. China’s digitalization and the daily use of smartphones connected to the internet have greatly contributed to this growth as consumers spend a lot of time on their smartphones.
Following the Covid-19 pandemic, the growth of e-commerce platforms was even more important. It is estimated that by selling on e-commerce platforms, companies can increase by 20% their sales. But e-commerce is not only essential for businesses, but also for the country’s economy. In 2019, the added value of e-commerce accounted for more than one-third of China’s GDP.
Now, if we look at the projected increase in e-commerce sales worldwide, China is by far the leading country with 862.6 billion dollars as of 2019 and is expected to reach 1,556.2 billion dollars in 2024.
As anywhere else in the world, selling goods on e-commerce platforms is not always as rewardful as expected. Because China is in a constant evolution, attracting the world’s biggest companies, there is a tough competition between both Chinese and foreign companies.
It is also worth mentioning that the competition is fierce because of Chinese product’s aggressive price and competitiveness. Chinese companies are extremely reactive to their competitors, and are able to find inspiration (or even copy) from other products in order to create their own version of it and sell it cheaper. You will also have to pay attention to your e-reputation and the comments you will receive as your competitors might want to write fake comments about your products or your brand.
Solutions to set yourself appart from the competition
In order to stand out in this industry, you will have to be creative, create unique products, be competitive in terms of price and quality, and most importantly, create brand awareness. You will have to take advantage of the fact that you have a western brand with higher quality products. Moreover, don’t forget to analyze the Chinese market and your future competitors. Finding the right partners can be the key to success, so do not hesitate to contact us if you want our experts to help you.
Chinese e-commerce platforms are not for small players
To tell you the truth, China is not an eldorado for every company. If your brand is already well-known in China, it is quite easy to be invited to join Tmall or JD.com.
But on the other hand, it is much harder for small companies to be accepted on Chinese e-commerce platforms (and even impossible in some cases). The majority of foreign companies expanding their activities in China have already at least an online presence in China. (However, this is set to change as more and more platforms are trying to become attractive for all types of brands.)
- Why is it hard to make it if my brand does not have awareness in China?
In reality, Chinese consumers are kind of reluctant to buy products from companies that they have never heard of before. So, it is mandatory to sell your products on renowned e-commerce platforms such as Tmall or JD.com, but at the same time, it is almost impossible for small companies to be able to do so because of the strict rules and conditions each platform has. For example, you will be required to have a turnover of millions of dollars, to be established in China (or to pay extra money if not, depending on the platform) as well as to have physical stores.
Chinese e-commerce platforms want to be sure that your business will be lucrative enough, in order for them to get their commission. They also need to be sure that people are going to buy your products. Even though it might seem harsh, it is also good for your company if you are not sure of the success of your products among Chinese consumers. Don’t forget that in order to have access to the platform, you will have to pay expensive monthly commissions.
- Do I need a Physical store in China?
E-commerce platforms want to be sure that your audience will be able to directly look at your products before buying them on their platforms. Chinese consumers will generally compare the price they’ll find in-store to the online price. And, as the online price is most of the time cheaper, they will buy it online.
- Can I create my own website to sell my products instead of using e-commerce platforms?
Even if you create your Chinese website in order to directly sell your products, it’s going to be extremely difficult for you to be profitable. Indeed, as mentioned earlier, Chinese consumers are extremely cautious when it comes to brands that are not established in China. They only trust renowned e-commerce platforms because they know that brands are selected.
NB: Having a website in Chinese however, is a critical step of your success in China. Having a website means you can be visible on the internet, being visible means you are credible.
The difficulty of selling on e-commerce platforms for small and medium businesses
As you understand, it is difficult and almost impossible for small brands to sell their products on e-commerce platforms. And, even if you have a medium business, the commission might be too expensive for you and not lucrative enough.
So, before investing in e-commerce platforms, you should at first promote your brand online, on social media for example. Don’t forget to develop your e-reputation, as well as your brand awareness. You can also create your Chinese website in order to be ranked in Baidu (our full article on Baidu SEO).
ROI (Return On Investment)
For many people, the ROI (Return on Investment) is a taboo topic. You might be wondering how much money brands can have thanks to e-commerce and what percentage of brands succeed on e-commerce platforms. According to some Tmall employees, it is estimated that 20% of the brands that are on Tmall make profits, 20% do not make profits but are not losing money either, and 60% are losing money.
How is it possible for 60% of brands to lose money?
- Products are not adapted to the Chinese market
They are not competitive enough, not unique enough, too expensive, not enough advertised, lack visibility, etc. If you are not familiar with the subtleties of the Chinese market, it can be hard to plan and adapt your marketing and advertising strategies.
- Fees are too expensive for the company
In order to sell your products on Tmall, you will need to pay some fees, pay for your online store, advertise your store, redesign your webpage, etc. Moreover, it is not enough to just spend money on eBranding to gain Chinese consumers’ trust. So in order to be profitable, companies need to work in general with 3 specialists: a designer, a web traffic specialist, and someone who will manage all your marketing strategies.
Solutions to optimize you ROI when doing ecommerce in China
You should conduct market research beforehand, in order to plan the budget you will need to have in order to open your store on e-commerce platforms, as well as how much money you will need to make in order to have enough ROI. We have experts in this field, so do not hesitate to contact us for more information.
Discounts on e-commerce platforms
As you probably already know if you already came to China, Chinese consumers are the best when it comes to bargaining. Even though their purchasing power has increased these last few years, Chinese consumers want to bargain for everything in order to pay as little as possible. And this does not only happen in real life, but also online ! If you want to attract consumers, you might need to give some vouchers and e-coupons to your WeChat followers for example. These promotions and exclusive offers will push them to buy your products.
For instance, the most popular e-commerce platform on which we can find the cheapest products is Taobao. The cheapest your products will be, the more you will be able to sell. Don’t forget that Chinese consumers are ready to compare your products with others, even by asking their friends or on Q&A platforms like Zhihu (知乎).
Solution to doing Smart Discount
Be ready to reduce your margin if you want to sell your products in China as well as to give vouchers and e-coupons to your audience, through social media like WeChat for example. Don’t forget the special events that are extremely popular in China: Singles’ day (11/11), Valentine’s day, Golden Week, etc.
Some tips and advice to succeed on Chinese e-commerce platforms
- Be active: you need to be active on e-commerce websites as well as on social media. JD and Tmall require businesses to be active, by optimizing and redesigning their online store, managing your ads, optimize your traffic, etc. It is also important to take part in special events (Single’s day, Golden Week, Valentine’s Day, Christmas, etc) in order to boost your sales and gain visibility.
- Be responsive: the majority of Chinese consumers like to ask questions about your brand or your product, so you need to be ready to reply to them. For example, it is important to have a WeChat official account, so that they can discuss with you via the online chat. You also have to encourage them to purchase your products by giving them vouchers or e-coupons.
- Be creative: whether it is for advertising or marketing your products, you will need to be creative in order to stand out amongst your competitors. If you want a cost-effective solution, you can start by creating an H5 brochure on WeChat to present your company. There are many ways to create one, however, you can contact us and we’ll create a personalized and creative H5 brochure for you.
What are the most popular Chinese e-commerce platforms?
Tmall: China #1 e-commerce platform
Founded in 2008 under the famous Alibaba group, Tmall (天猫), is a subsidiary of the e-commerce website Taobao (淘宝网). Tmall stands out from its competitor’s thanks to its strict standards in terms of quality and renown.
Over the years, Tmall was able to grab the majority of China’s e-commerce market shares, establishing itself as the most popular Chinese e-commerce website and becoming the best online gateway for local and international retailers.
Over the years, Tmall’s gross merchandise volume increased from 847 billion yuan to 3 202 billion yuan in 2020 (more than 3 times higher)!
- Read our full article on Tmall: Tmall: The Ultimate Guide
JD com: Smart Logistic
Founded in 1998 by Liu Qiangdong in Beijing, JD (which stands for Jingdong 京东) was at beginning only a magneto optical store, which diversified over the years with electronics, computers, mobile phones, etc. In 2004, it opened its online retail platform and quickly became one of the two massive B2C online retailers in China with its competitor the Alibaba-run Tmall. Now, JD.com is partly owned by the giant Tencent, which has 20% of its stake. As of 2021, JD.com has over 470 million active customers.
JD.com has set its standards for online shopping through its commitment to quality, authenticity, and the variety of products it offers, covering everything from fresh food and apparel to electronics and cosmetics. Another asset of JD.com is the delivery time, which is in general the same day (or less than 24 hours).
Xiaohongshu: Social eCommerce & life-style
Founded in 2013 by Charlwin Mao and Miranda Qu, Xiaohongshu (小红书) also known as ‘The Little Red Book’ and ‘RED’, is a social media and one of the world’s largest community e-commerce platforms. Over the years, it has grown to become China’s foremost shopping platform in terms of beauty, fashion and luxury products. In 2018,was listed on Forbes’ “Top 50 Most Innovative Companies in China 2018” list. As of 2021, Xiaohongshu is boasting over 300 million registered users and 85 million monthly active users. It was also valued at more than USD 3 billion in 2018, and has the support of giants like Alibaba, Tencent, Zhenfund, Genesis Capital, etc.
In the beginning, Xiaohongshu was only a platform on which users were able to review products and share their shopping experiences. However, in order to expand its activities, it has become pretty like a combination of Pinterest and Instagram, with e-commerce features, creating its own cross-border eCommerce platform ‘Fulishe’ (福利社).
On Xiaohongshu, people are able to post and share product reviews, travel blogs, and lifestyle stories via pictures and short videos. Xiaohongshu is also running RED Mall, a platform on which Chinese consumers are able to purchase international products.
Pinduoduo: The Low-Cost Platform
Founded in 2015, Pinduoduo quickly became the fastest-growing tech company in the world, generating over RMB1.45 trillion gross merchandise value and 643.4 monthly active users as of 2020. If you want to export your fresh products in China, you should definitely choose Pinduoduo, as it is the largest agriculture-focused e-commerce platform in China. It directly connects farmers and distributors with consumers. Pinduoduo has revolutionized e-commerce, becoming a social commerce platform as well as a consumer-to-manufacturer (C2M).
On Pinduoduo, consumers can discover and purchase products from a wide range of sellers. What sets Pinduoduo apart is its social aspect, because users can easily share what they have browsed or purchased with their social network. They can also invite them to join teams within 24 hours, in order to benefit from lower prices. Thanks to Pinduoduo, consumers can enjoy a group tariff while receiving the product individually directly at home.
It is also important to know that Pinduoduo is very low cost for both consumers and merchants, thanks to its policy of “no commission”. In fact, you will just have to pay a 0.6% service fee to the payment function supplier. Now you might wonder how does Pinduoduo makes profits? Pinduoduo mainly monetizes through advertising, with 90% of its revenues that is coming from online marketing services. This explains why Pinduoduo really revolutionized e-commerce platforms, with an innovative marketing strategy, and its low-cost system and fast process.
Moreover, another assets of Pinduoduo is that you can directly advertise and promote your products on the app. For example, you can use live-streaming to explain the benefits of your products. You can also hire KOLs in order to attract a wide audience.
Douyin Flagship Store
With more than 600 million daily active users in China as of 2021, Douyin, known as Tik Tok in other parts of the world, is one of the most lucrative and promising apps in China. In March 2021, Douyin launched its flagship stores, available for brand accounts on its platform, marking a major step into e-commerce. Until now, Douyin was just a way to promote new products and popular items to consumers through short videos and live-streaming. Moreover, it was also possible for companies to send vouchers to their followers and add links to e-commerce platforms such as JD.com and Taobao. However, the novelty of these flagship stores is all about marketing.
Brands are now able to create their own flagship store directly on Douyin, which will allow them to increase their conversion rate. This feature also includes the possibility to create campaign banners, send vouchers and recommendations, but also offline store information. Consumers are then able to claim these vouchers, which can be used both online and offline. Since the launch of this new service, more than 220 brands (Huawei, Winona, Peacebird, and Perfect Diary) have already introduced their flagship stores, including international brands. The purpose of Douyin is to reach the 1 trillion yuan at the end of the year, in order to be amongst the top e-commerce players in the Chinese market.
- Read our article on Douyin’s Flagship Stores.
How to succeed on Chinese e-commerce platforms? eReputation
IN A CONNECTED COUNTRY YOU NEED DIGITAL MARKETING SOLUTIONS
Baidu SEO & SEM for visibility & credibility
To succeed in China, you will need to increase your visibility. How? You can start by focusing on the most popular search engine in China: Baidu (百度). As a matter of fact, more than 70% of online research is conducted through Baidu. After creating your Chinese website, you will have to focus on Baidu to increase your visibility and e-reputation.
To develop your visibility on Baidu, you can use different marketing solutions such as:
- Pay Per Click (PPC)
- Search Engine Marketing (SEM)
- Search Engine Optimization (SEO): you will need to create qualitative content, shareable information, use keywords to increase your online presence on Baidu, etc.
Due to China’s digitalization, China’s way of advertising and promoting products shifted to social media. Chinese users are very active on social media platforms and are used to comment, share their purchasing experience as well as give purchasing advice.
WeChat 微信: China’s most used social media
With more than 1.2 million monthly active users, WeChat is the most popular app in China. Even though it was at first a messaging app, the app released under the giant Tencent in 2011 quickly became a vast ecosystem of services. Nowadays, WeChat is a must-have for every citizen and businesses as it became a new player in the e-commerce industry.
One key point for successfully promoting your brand through WeChat is to create an Official Account. Don’t worry, if your brand is still not present in China, we will help you find and reach your target audience by improving your brand awareness as well as creating your WeChat official account. Then, to successfully promote your brand, we can launch campaigns to create buzz, as well as to create an H5 brochure in order to promote your brand.
- More about WeChat Marketing : WeChat Marketing: The Ultimate Guide
Weibo 微博: The place to be commercial
As one of the most popular social media app in China with more than 550 million monthly active users (2020 Q4 + 85 million YOY). 94% of its user base uses the mobile app. Weibo has is an open social media, and just like Twitter, is one of the most efficient platforms to create the buzz and gain visibility. Contrary to Wechat, which is private, Weibo is open to advertising and its users are as well. That is the place to advertise and engage in a commercial way with your followers.
The social media platform attracted more than 150 000 companies wanting to develop their e-reputation. Brands have to create a Weibo Official Account to improve their presence in China by attracting followers.
It is estimated that more than 62% of Weibo users follow at least one brand on Weibo.
Our favorite Weibo marketing tools are:
- Weibo Paid Ads
- Weibo Influencers
- Weibo Lucky draw & lottery
- Weibo #hashtag
KOLs in order to promote your brand
In China, one of the best ways to promote your brand and your product is to collaborate with KOLs (Key Opinion Leaders). They act like influencers are able to sell hundreds (or millions) of products in a short amount of time. If you want to hire a KOL, do not hesitate to contact us as we have a list of KOLs.
Branding is everything in China
Branding is one of the most important aspects in order to conquer the Chinese market, even for pure e-commerce players. Most Chinese consumers want to buy a product because of its brand. Thus, they want to buy premium and reputable brands.
E-reputation to increase your sales
In China, brand reputation is the key to success. You have to do everything you can to always have a good image. If you lose your reputation, you will lose everything.
You need to make sure that you get good comments for your brand on forums, social media and other websites. Chinese consumers only trust brands that have good comments and recommendations from friends or family and on media platforms.
If we look at the main sources of new brand discovery, word-of-mouth is the most effective way to get new clients. It is even more powerful than search engines and brand websites.
Encourage conversation about your brand to develop the traffic, good comments and recommendations.
If you want to successfully manage your brand image in China, you can contact us and we’ll take care of everything.
Contact us to get started on China’s e-commerce platforms
It is clear that China has become the market to conquer for brands that want to expand their activities worldwide. However, as you probably already know, the Chinese market is completely different from what you might be accustomed to. In order to successfully enter this competitive market, you will need experts who fully understand the subtleties of China.
GMA is a digital marketing agency based in Shanghai, with experts all around the world. Depending on your needs and the scope of work, we will adapt our marketing strategy in order for you to get the most out of e-commerce in China.
Our focus is to promote your business with your target closely in mind. After all my explanations, you understand that the key to sell online is to have a good image and to be reputable. We’ll use digital tools including: Baidu SEO and SEM, E-PR, Media Buying (DSP) & Community Management. Then, we’ll manage the campaign and assure its optimization & success.
As of 2021, we have worked with more than 800 western brands
Lead generation professionals
To be effective in your lead generation, you need to develop a good e-reputation. Online advertising & quality contents will help you to develop your e-reputation.
We are lead generation experts and we apply the solutions we offer to companies to our agency. Thanks to this solutions we get an average of 350 leads per month (March 2018).
Experts in Digital Solutions
- Website Creation, Development & Auditing
- Baidu Search Engine Optimization
- Social Media Marketing (WeChat & Weibo)
- Reputation Management & Community Development.
- Public Relations & Exposure in Chinese E-Media.
- Analytics, monthly reports & analysis from our team of experts.
ROI focused agency
We are an ROI-focused agency. The solution is to attract and also re-target the most qualified traffic in order to increase conversion rates, which can be effective for E-Commerce in China.
Some of our eCommerce case studies
WeWOOD is a watch brand that manufacturers wooden watches. The brand was developed in 2009 in Italy.
The company plants a tree for every watch sold. As of December 2013, the company has planted 250,000 trees in America and other countries where the watch is sold.
- WECHAT STORE
- WEIBO: Events on social medias / Account managing.
- E-REPUTATION: 4 posts on different platforms / 8 PR on top fashion platforms in China.
- LittleRedBook: A new store opened in littleredbook platform.
RESULTS AFTER ONE MONTH
4136 followers, 6430 views.
Increased 705 followers in one month.
11 watches sold.
total 222579 views, 436 shares/forwards.
528 comments and 334 likes.
Increased 1360 followers in one month.
NANO JAPAN was created in Japan in 2006. Having developed an impressive range of best-selling beauty & health products in Japan, NANO JAPAN has decided to sale their products in China.
- Weibo: content display
- WeChat: content display
- E-Reputation: content display
- JD: e-shop + ads
RESULTS AFTER 2 MONTHS
increased 1100 new followers and got more interactions than in the past.
gained a number of new followers and views. Plus, by carefully selecting topics and weekly updates, we’ve accumulated a lot of marketing content.
JD store artwork (thumbnail pics modification).
Get in touch
The eCommerce in China is a huge market, with 86billion dollars for the crossborder, and Chinese ECommerce size was more than 1.9 trillion Dollars in 2016.
Many opportunities are available on the market, a lot of Companies are making a lot of money, but 50% of them are not successful and you have to be aware of that.
Work with specialists of eCommerce in China is the key to the success.