In 2016, e-commerce in China is a very huge and important market. We’ll give you some figures concerning the year 2015. 589 billion dollars were spent in e-commerce in China and 60% of Chinese Internet users have made at least one online purchase. In China, the phenomenon of e-commerce is so important that it employs 2.5 million people. The Chinese e-commerce market has been experiencing very strong growth for several years. China has surpassed the United States in terms of the size of its e-commerce market. Arguably e-commerce in China is the fastest growing industry of the world and it is now the largest e-retail market in the world. The market is seeing constant growth, e commerce is attracting more and more consumers. The Chinese are highly connected and, when considering a purchase, they most often find product information on Baidu. The comments and the feedback is really important because chinese people take it very seriously, it can easily influence their choice whether to buy or not. This is why you will need to be present on social networks. There is a big boom in online sales on these shopping websites in China due to the rise of the middle class. Amazon, the largest e-commerce leader in the world is struggling to be in the top 3 in China. Amazon China, the leader in the US is far behind its competitors in China (Alibaba Group). In addition, there is the phenomemon of ‘Easternization’, this is the increasingly powerful role eastern states have in global politics and markets.
Why is the Chinese eCommerce Booming?
This boom in e-commerce can be explained by different factors. First, the increasing number of mobile users in China, they have participated in the development of e-commerce. 80% of Internet users use their mobile to do their shopping online. Second, the young middle class is also a growing category, using physical stores as an observation window before going on Tmall and Taobao to carry out their orders. Taobao and Tmall are two flaship sites from Alibaba which are dominating the e commerce scene in China. These two e-commerce sites are what come first in the minds of consumers. It has even become a natural reflex among some Chinese consumers.
When they want to buy something they go directly on ‘taobao’ to check the prices. It is literally a digital battle between every player in e-commerce wishing to challenge the leading position of Alibaba. The digital marketing for these websites is well prepared. Alibaba is the market leader, amateur store owners are on its Taobao.com and Tmall hosts official brands as well as international imports. They also have a separate site for retailers and brands to reach across the country.
Chinese e-shoppers are unique because they are more likely to buy clothes or fashion accessories rather than other types of products. This trend also reflects the growing appetite Chinese consumers have for everything that relates to the fashion industry. Electronic devices, for example mobile phones are another example of a very popular product among Chinese consumers. Other very popular products are cosmetics and bags. You can buy almost everything online on these websites. And it only takes several minutes. Furthermore, the delivery is very fast, you can order an item today and receive it tomorrow, sometimes with no extra delivery fee. With a market benefiting from such development, the Chinese e-commerce will certainly see a huge development in the next few years. Each website is trying to carve a a piece of this giant cake.
Alibaba Group, whose founder is Jack Ma, has become very important in the business world. He is now one of the richest men in China. He has invested in many companies, in order to remain a leader in the Chinese market. He holds Tmall, Taobao and many other internet applications. Alibaba dominates the Chinese e-commerce with a 83% market share and more than 350 million active customers per month. Alibaba group generates a huge annual volume of transactions. The Alibaba Group web giant wants to diversify their business, they have launched an e-tourism site called alitrip.com, it is meant to compete against Ctrip.com. For most of the online shopping platforms in China, the challenge will be supermarkets, online groceries stores, e-tourism and many others.
360buy who has become JD has expanded aggressively. They mainly sell electronics and household appliances, as well as books and clothes. They also have an online travel agency, and a separate haute couture luxury service 360Top.com.
Yihaodian is the most recent actor to enter the e comemrce in China. Yihaodian is mainly owned by walmart and it has implemented a very aggressive advertising campaign in major Chinese urban cities for example Shanghai and Beijing. This site is still struggling to gain more market share because of the fierce competition in China.
We will see how the cross border e-commerce sector grew to such a large scale to become the major Chinese e-commerce practice. It is becoming more and more common. Consumers are always on the lookout for foreign products, the Chinese love these sites, Tmall Global hosts foreign brands and is becoming increasingly popular.
A cross-border site is an online platform where you can sell or buy goods or services in other countries. Indeed, the seller is in a different country from the buyer. The cross-border movement has been a remarkable success among Chinese consumers. They are very fond of foreign products, and through cross-border sites, consumers have access to a wide range of foreign products including European products. These sites allow them to pay in Chinese currency and they have a customer service adapted to their language. These cross-border sites also offer to return products without having to send them back to their country of origin. Another positive point , the products arranged on these e-commerce sites are available at affordable rates since the cyber-consumers do not have to pay customs.
For the brands, it is a great opportunity. They do not need to be present in China, and can conquer the Chinese market. As we already know, China is a leader in the sector of international e-commerce. Clients are much more active on their smartphones than Europeans or Americans. You should also know that young Chinese people are very active on social networks, they share, publish, and give their opinion very often.
How to be successful in the Chinese ecommerce world?
To take full advantage of the phenomenon of e-commerce, you must first follow certain rules in order to be successful. First, you must also have a registered trademark in Chinese, you can then get through the administrative office of Commerce and the other related industry bodies. After you complete these tasks, you can register on the website and open your online store that will allow you to break into the local market. Then you will have to promote it and it takes a lot of time. SEO and social networks will be your best friends to promote your product. Your website has to display all your products with all the details and pictures. A good SEO campaign will allow you to become an expert in your field because you will appear first on Baidu when customers will search for a product. Baidu is a powerful tool of communication in China.
The Chinese people are fond of social networks. Do not hesitate to take advantage of the influence of these social media channels to promote your shop. For example you can launch campaigns on Weibo or start an event and content strategy (story telling). WeChat has more than 600 million daily users. Therefore, you have to create a certain form of engagement among young Internet users. This is a way to success. Social networks in China must be part of your digital marketing strategy.
Tmall is a very competitive site because many shops sell similar products. In order to have more visibility they have to differentiate themselves from other sellers. One of the ways of differentiating is to appear on the first page so that when a customer searches for a product he will automatically click on your shop. It will be an impulsive purchase. It is very important to look for impulsivity among Internet users and analyze the data.
Beyond differentiation, there are many techniques that will help you to stand out on the biggest Chinese e-commerce platform. First, we can talk about the promotion strategies. They are really effective. For example you can offer delivery or give a little gift. Finally, some other strategies can be the distribution of discount coupons or joint purchasing. These techniques will create loyalty and commitment to the customer and encourage him to talk about your store to his family and friends or to leave feedback. Recommendation is very important in China, a country where almost everything is based on trust and loyalty.
To conclude, the Chinese e-commerce is currently exploding. The market of e-commerce in China has already experienced record growth rates in recent years. And it is still growing and becoming stronger. It includes a large number of players in this sector and some are specialists in a particular domain or activity. The chairman of Alibaba Group, Jack Ma wants to invest in the e-commerce market in other countries. However, in China it is a ‘lifestyle’ whereas in other countries it is only a way to shop. E-commerce has become a part of Chinese customs but not in those of the rest of the world. E commerce in France is not that advanced as the one in China, there is still a large majority of people who prefer to go shopping in malls rather than having their product delivered at home. It can be explained by the fact that Chinese consumers are more connected than the western consumers.