International trading can be a daunting experience for anyone unfamiliar with it. Zoe Ripley, international marketing director at ChannelAdvisor, helps to unravel the mystery that is the Chinese market and how you can make the most of it
For many in the e-commerce world, 2013 will be remembered as the year that China finally surpassed the US as the world’s largest e-commerce market. While it wasn’t a surprise to anyone – this significant power shift happened quicker than most expected.
China’s speedy ascent shows no signs of slowing down in the near future. By 2020, China is predicted to have more e-commerce volume than the US, the UK, Japan, France and Germany combined.
How exactly can UK retailers take advantage of this lucrative Chinese market? We’ll look at what online sellers need to know about the Chinese e-commerce landscape, and how to make the most of selling there.
The growth of Chinese e-commerce has been aided by the concurrent rise of smartphone technology. The number of mobile users in China skyrocketed by 98% in four years, and the number of shoppers using mobile payments increased by 43% in just six months in 2013. According to Forrester, more than 400 million Chinese consumers now have smartphones and use them to scan barcodes, browse the internet and research products.
The relationships between Chinese consumers and their mobile devices also vary from those
of average UK consumers. According to a 2013 study, China is becoming more of a “one screen” culture — as opposed to the “multi-screen” culture in the UK. Inevitably, this increased mobile-centric behaviour will lead to more mobile browsing, more mobile shopping and, ultimately, more mobile purchasing. Additionally, Chinese e-commerce sites are loaded with images and information. Retailers need to consider how to build their mobile website to reflect the Chinese consumer culture have more images without sacrificing upload speeds.
A key to understanding the Chinese consumer is to step back and take a bird’s-eye look at the e-commerce habits of China as a whole. The Chinese landscape is dominated by marketplaces, with 90% of all e-commerce transactions completed through marketplaces. To provide some perspective, marketplaces sales in the UK only make up roughly one third of the total e-commerce landscape. The remaining two-thirds of UK e-commerce sales occur via search, shopping, social and other digital marketing channels.
China has become a fertile ground for marketplaces, and the massive growth of the country’s e-commerce sales volume reflects the surge of these major marketplaces. Consequently, China’s e-commerce consumers have come of age with marketplaces and are conditioned to use them as their primary option for online shopping.
If you want to sell in China, then sell on marketplaces. Given that marketplaces account for such a vast percentage of all China-based e-commerce transactions, sites like Alibaba’s B2C marketplace Tmall are the ideal place to list your products. While you’ll need to be prepared to lower your prices due to the high volume of competitors, there are no costs involved in driving shoppers to the site — Tmall does all the heavy lifting for you.
China may have gotten off to a late start, but it’s out in front now. With a massive population and a seemingly insatiable appetite for consumer goods, China has emerged in the last several years as an e-commerce superpower. While its consumers don’t behave exactly like Western consumers, China has proved a fertile ground for Western retailers looking to successfully expand their business. However, understanding the consumers you’re trying to reach — how they shop, what they’re shopping for and where they’re shopping for it — is the first step in establishing a foothold in the market.