eCommerce-in-China

[FREE ebook] Online sales revolutionised: how to sell behind the Great Wall of China

China is one of the world’s largest economies with an extraordinary purchasing power and a growing population. Even though starting business relations there may be challenging, Western online merchants should not be put off by a high entry barrier.

In fact, making the effort to overcome this challenge can turn out to be a real deal maker for many European and American online sellers. Or a gateway to … the Promised Land of eCommerce.

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But before you take interest in the emerging Chinese online marketplace …

… happy CNY!

So it’s the Chinese New Year (CNY) and we’d like you to celebrate a bit. Celebrate the fact that it’s the Year of the Monkey! Those taking astrology very seriously suspect that it is the unluckiest year in the Chinese calendar. They prefer to be careful about love, health and investments. We, however, trust that as long as you put your fate in your own hands, you create your own luck. So better use your creativity to make it good luck! Online Sales in China

Coming back to the Monkey Year…

  • Lucky numbers? 4 and 9
  • Lucky colours? Blue, white and gold.
  • Unlucky numbers? 2 and 7.
  • Unlucky colours? Pink and red.

Unfortunately we’re not really sure whether the numbers and colours above will make or break your online sales deal. But we believe that good fortune will come your way. We will be happy to accompany you on your way to eCommerce success, using our vast knowledge of international online sales.

Alibaba: eCommerce giant in China and beyond

Talking about forecasts, we simply can’t overlook the position of China in eCommerce. You must have heard that the Chinese eCommerce market is controlled by the giant Alibaba, the Far East equivalent of eBay and Amazon. But did you know that sales figures on Alibaba are higher than those of eBay and Amazon combined?

Sales figures on Alibaba are higher than those of eBay and Amazon combined

It is common knowledge that we are swamped by goods made in China. On top of that, the eCommerce winner among marketplaces is Alibaba. The brand itself may have to face the problem of low recognition in the West, but sales figures speak for themselves. Let’s address two questions first: Why is eCommerce in China booming and where does China buy from and sell to?

Why is eCommerce in China booming?

Among the factors contributing to the rise of the Chinese eCommerce empire are:

  • ‘Price wars’ among B2C platforms vying for market share
  • Increasing online presence among more traditional enterprises
  • Increasing online presence among online buyers.

Where does China buy from and sell to?

Top 5 regions purchasing online from Chinese web shops (2013) :

  1. USA
  2. Hong Kong
  3. South Asia
  4. Japan
  5. Korea

Top 5 regions where Chinese buyers shop overseas (2013):

  1. USA
  2. Japan
  3. UK
  4. France
  5. New Zealand

These are the top 5 regions, but the fact is that Chinese goods are sold … everywhere.

China sells to Europe and America, but is it possible at all for American and European online sellers to sell in China?

It sounds counterintuitive, doesn’t it? After all …

…aren’t cheap goods from China traded in Europe and the rest of the world?
And what’s the point of selling them back to where they were made in the first place?

The answer is:

YES, there is a big sales potential in China if you’re a European or American online seller. And NO, we’re not talking about selling the goods you imported from China…
…. well, back to .. China.

So what to sell in China? Firstly, let’s highlight a few things:

  • The purchasing power there is enormous, creating the biggest source of the world’s international buyers.
  • There are younger, more affluent segments of population interested in Western brands and luxury products that are not easily available on the local market.
  • The middle-class is growing, driving cross-border sales.
  • Affluent Chinese consumers seem to prefer baby & nutrition products as well as meat, dairy products and alcoholic beverages imported from abroad rather than produced domestically, which ties in with a bigger trust in Western brands.
  • Growing opportunities in the fashion segment since more and more Chinese consumers are inspired by Western culture and brands. This is the potential that large Western brands can tap into.
  • Younger, wealthier parts of the population are interested in high-end brands, luxury goods from abroad, e.g. beauty products, jewellery or gems.

For more information, download our guidebook!

eCommerce in China

Many Chinese consumers are fascinated by Western culture and lifestyle, willing to buy foreign products, such as wine, food, cosmetics, luxury and fashion goods. There is also a belief that the quality of foreign goods may be much better than those produced locally, not to mention a wider choice abroad. This is where international eCommerce comes into play.

Knowing all the aforementioned facts…

… if you don’t sell in China yet … are you considering it now, wondering how to go about it? On top of researching the local market, culture and mindset, think about a channel of distribution for your goods. For instance, Alibaba offers a cross-border solution, enabling Western online merchants to sell directly to the Chinese shopper.

Alibaba and similar platforms are convenient options, yet bear in mind that they don’t seem too attractive financially. The reason is clear: There is too much competition, especially from local sellers. Hence, the current tendency for foreign sellers is to focus on alternatives, such as brand owned web shops and WeChat stores.

Take time to do proper research, think what you could offer to the Chinese buyer, position your shop on the local market and present yourself as a trusted online seller.

In China online shopping is simply hot

China becoming the next global consumption superpower is closer to reality than ever. Its private consumption is around 8% of the world’s total today. And this is just the beginning. Citizens are getting richer and the society is moving towards a more sophisticated consumerism, forming a real battleground for brands. Finally, China is the biggest consumer of smartphones, which again is a source of shopping opportunities.

For more about the characteristics of the Chinese consumer, check our article A good time to attract the Chinese buyer to your online shop.

Don’t miss out on opportunities that your online shop can capitalise on

The Monkey is an intelligent animal that likes testing and experimenting with what is possible. Astrological gurus may tell you to remain sceptical about investments, but the fact is you have a big chance to boost your finances. As long as your decisions are based on reason rather than emotion … especially in the Year of the Monkey. If this rule is followed, now is a good time to embark on new endeavours!

In a nutshell

The Year of the Monkey should be an eventful time, also in financial terms. Thus, make wise decisions. The Monkey is an inquisitive, witty and creative animal so let yourself be inspired by its positive characteristics.

On the one hand, the Year of the Monkey can be predicted to be a bit risky in the world of business. On the other, it seems a perfect time to use your innovative ideas and wit to … outwit your competitors. The Chinese marketplace may be one of a few possibilities. Study facts and try to evaluate the numbers and trends. To reiterate…

Private consumption in China is around 8% of the world’s total today. And the Chinese love Western brands so increase your online sales by catering to their tastes.

The world may be swamped by goods made in China, but also Chinese consumers need the world to do some trading in their own country.

Happy New Year: We wish you success with the global expansion of your online business!

Happy New Year: Sell in China

Further reading & other sources

eCommerce in China: The future power of Cross Border Trading?

Alibaba: China’s eCommerce giant highlighted

Ecommerce Europe Asia Pacific Report 2014/2015. Payvision, The Paypers, China Consulate General of the Kingdom of the Netherlands.
http://www.economist.com/news/briefing/21595019-market-growing-furiously-getting-tougher-foreign-firms-doing-it-their-way