China's Thriving E-commerce Market - Take Your Slice!

China's Thriving E-commerce Market - Take Your Slice!

The Market

When you think about the scale of China and its 1.1 billion population, its saturated e-commerce markets and obvious logistical restrictions that come from shipping from the UK, it’s easy to become a pessimist and doubt how you might establish or grow your e-commerce business there.

Let us flip that thought on its head.


The Facts

China is a thriving market, owing to being one of the longest standing countries to start selling products online. In fact, many global investors have an interest in what Chinese consumers are buying or not buying, as a lot of global firms rely on China’s market growth.

Since 2014 China has seen a 47% increase in online shoppers, 317% increase of online sales and a prediction of 200m Chinese consumers shopping online by 2020. Not to mention China’s plans to build 212 logistic hubs by 2035.

With plans to build a logistical hub network driving more intelligent cross-border companies to promote integrated development of express services, intelligent warehouses, smart robots and drones we should expect to see an even bigger increase in cross-border shopping following the trends of 2018 read more about 2018 trends here.

Products

Know what sells and what doesn’t! The most popular purchases from China are cosmetics at 45% followed closely by clothing, footwear, food and health care.

Luxury clothing is proving to be a popular purchase especially within millennials. 93% indicated purchasing luxury clothing with 42% revealing they purchased due to convenience and 37% due to online promotions. To help utilise the benefits of this behaviour consider factoring in annual promotions when setting out your budgets.

 

Behaviours – The Customer Journey

Marketplaces:

Chinese millennials are much more cautious and less impulsive!

How do customers find your brand? Are you in the right place? Marketplaces are key for the Chinese online shopper; leading and trusted platforms are generally the start of a Chinese shoppers’ journey before deciding to purchase any product online.

Alibaba’s Tmail platform holds 53% market share with 97% of Chinese online shoppers using the platform. Other popular market places include Amazon, JD.com, Taobao and AliExpress.

61% of Chinese shoppers start their shopping journey on Tmail, while 39% begin on Amazon.

 

Personalisation:

What draws customers to your products? Personalisation is very important to the Chinese shopper. 31 % Chinese vs 16% globally say they are almost twice as likely to click on an advertisement relevant to them.

Utilising application programming interfaces (API’s) and increasing data management and digital marketing will enable you to gain more insight into customers behaviour.


Social Media and Devices: 

Social media in China is just as important as your website and appearance on marketplaces; 45% of Chinese vs 39% globally use it to validate product quality, find new brands and purchase directly.

WeChat is a popular social media platform in China with over 800 million monthly active users. Consider using social media for promotional offers on your products as 41% of Chinese online shoppers use social media to search for a deal.

With that said it’s no surprise that over half of Chinese online shoppers also prefer to purchase using their mobile phone, which is impressive as only 14% use their phone to shop globally. An estimated $1.4 trillion per annum will be spent on m-commerce retail in China by 2019.

But don’t fall into the trap of just creating paid ads on social media, remember the Chinese online shopper likes to feel a personal touch and respond to the moments that matter through their purchasing journey. Think about your digital presence and how your brand is perceived. 




Motivations vs Challenges

What’s stopping them spending? To help understand what makes Chinese shoppers make purchases it’s also helpful to know what might motivate them or put them off so you can preempt any barriers or preconceived ideas.

The top turn-off is that the delivery will be too expensive, so make sure you have the most competitive delivery partners to enable cost-effective delivery rates and keep the pricing clear and upfront.

A close second stopping shoppers spending with almost 60% is when the website isn’t in the shopper’s native language. This is quite a common theme globally as 56% of shoppers said the ability to obtain information in their own language is even more important than price.

What makes them spend? On the flipside, Chinese online shoppers are more motivated to shop online from a UK site due to the quality of the products and low prices. Think about jumping on the back of this existing reputation and use it to your advantage.

Read more on our top tips for your website here.

Are you secure? With the high rate of shoppers using marketplaces and apps to shop online it’s no surprise that 67% of shoppers use e-wallets to make payment. This method doesn’t come without its drawbacks with, 69% of Chinese shoppers expressing concerns of having their personal information hacked using their mobile. A popular way to combat this is to partner with a well-established online payment company such as Alipay.

Tenpay and WeChat are also top of the list when it comes to online payment.

Have you thought about your taxes and duties? There are a number of limitations and rules that come with cross-border shipping, so it’s good to be clear on what’s what. There are two options when it comes to paying for your taxes and duties, either Delivered Duties Paid also known as E-commerce clearance / CEBC or Delivered Duties Unpaid. At P2P when exporting to China we operate DDP which means the payment for your taxes and duties are handled and paid for outside of the customers online checkout ensuring a smoother and quicker process. Unpaid means customers will have to pay it themselves to get their purchase through customs potentially causing a slight delay.

Remember if you choose to operate a DDU be clear on your product pages to ensure there are no hidden costs to your customer.

Other restrictions to be aware of include a maximum parcel value limit of 5,000 RMB recently increased from 2,000 RMB, not forgetting an annual limit per person of 26,000 RMB also recently increased from 20,000 RMB 

Don’t allow these restrictions and legalities put you off, at P2P we have your back and will make sure you have all the information you need, and we deal with all the paper work, giving a more streamlined integration into a new county.


Delivery

The final mile of your customer’s journey! Research shows the majority would like to see delivery times, options and costs upfront before they commit the buying a product online. To help your customer feel confident in your brand and commit to their purchase make sure you keep your delivery offering clear and that you’re matching their needs.

At P2P we offer:                                                                                        

  • An end-to-end delivery aim of 5-10 days.
  • Deliveries 6 days a week Mon-Sat.
  • 3 delivery attempts, if undelivered, held for 7 days for pick up.
  • SMS notification sent to consumer and leave safe with neighbour available.


Key takeaway

Let your brand and products have enough digital presence across popular Chinese channels to tell its own story.

If you feel ready to take a global leap whether that be taking advantage of China and its thriving market or you have other destinations in mind, P2P deliver to over 220 countries and territories, guiding our customers to new markets, whilst offering the perfect e-commerce delivery services from fully tracked, untracked and express.

Get in touch today.