The Chinese e-commerce market is the largest in the world, with online retail sales expected to surpass $1.1 trillion in 2017. With such a large market to sell to and high demand for quality international goods, importers are working hard to set up online stores and get their products into the hands of Chinese consumers and some are having tremendous success.
Cross border e-commerce purchases now account for roughly 40% of all online transactions in China, with that number expected to rise to over 50% by 2020. This shows that Chinese consumers do want high quality international goods, but they just need a way to access them. This also puts Australia in a unique position, our geographical proximity to China means that freight costs are often much lower than importing from other countries and due to the shorter freight period, products will have a longer shelf life coming from Australia than they would other Western nations.
The potential in China is massive, but there are challenges for businesses that want to break into the market. The language barrier and the cultural differences in the way they do their online shopping are two of the biggest, and businesses will need to learn how to deal with them if they want to have success in this highly competitive market.
Dealing with the language barrier can be more difficult than just translating your webpage into Chinese; there are multiple different dialects across China each with their own sub dialects and variants. Guangzhou and Shenzen are perfect examples of this variance, although both are cities with a population of over 10 million and are located only 2 hours away from each other, they each speak a different dialect. Navigating these language barriers can go a long way to popularizing your products in China, so it’s important to consult with people who know the marketplace before you attempt to enter it.
One of the toughest problems that businesses face when entering the Chinese market is the difference in the online shopping culture in China to that of Western nations. There are multiple marketplaces, each with their own differences and specialties, and navigating these platforms can often be challenging. Platforms like TaoBao, Tmall and JD.com are each used for different types of products aimed at different markets, and social apps like WeChat are constantly being updated and improved to incorporate both shopping and payment methods. Understanding these platforms will go a long way towards helping businesses break into the Chinese market.
The habits of Chinese shoppers are also different to the way that western cultures shop online. Chinese consumer use websites like they would a traditional shopping center, browsing through stores and looking at different products rather than looking for a specific item or brand. This means a lot more of their shopping is done on websites like Alibaba, Tmall and JD.com, websites where they can browse through millions of different products being sold by thousands of different merchants. This means that it is often a lot more important to have a proper e-shop on those websites, rather than a standalone website that only sells your goods.
The methods of payment in Chinese e-commerce are also vastly different to the rest of the world. The most commonly used methods of payment in Chinese e-commerce are Alipay and WeChat Pay, which can both be used for online and offline payments. Both of these platforms are offshoots of major Chinese brands (Alibaba and Tencent’s WeChat) and have become synonymous with Chinese e-commerce because of their convenience, innovation and ease of use. Alipay has recently overtaken Paypal as the largest mobile payment platform, and have recently unveiled a facial recognition payment service highlighting their innovation and commitment to making online payment as convenient as possible.
Understanding all these differences can be quite a task, especially if you’re trying to run a business in Australia simultaneously. At Haines we have experience in launching brands into the Chinese market and we can help you get your products into the hands of Chinese consumers.