China has smashed online sales records (again). The internet may have been alive with coverage of Black Friday in the US recently, but in terms of online sales, China is in the lead. On Single’s Day on 11th November, a record-breaking $3 billion worth of goods was bought by Chinese consumers – more than double the $1.25 million sold by US retailers on Cyber Monday. It’s starting to look like China may be about to enter a new, prosperous e-commerce age, and whether your business hails from the East or the West, there are some incredibly tempting reasons to get in on the action.
For one, the sheer scale of the market is a huge draw; China’s current population is approximately 1.3 billion. Out of that, BCG predicts that up to 280 million Chinese consumers will have access to disposable income of up to $1 million by 2020. Forecasts aside, more smartphones are sold in China right now than anywhere else in the world.
It doesn’t hurt that China has taken to e-commerce like a duck to water; its online retail industry currently enjoys a healthy 193 million shoppers. The Chinese government is also going to lengths to ensure this prosperity continues, implementing policies which it hopes will quadruple yearly revenue.
A point of interest for Western businesses especially is that Chinese consumers can’t get enough of Western brands, with around 60% of shoppers willing to pay over the odds for American products – this extends from designer labels to imported FMCGs. As a result, China has something of an unfortunate reputation for being rife with fakes (the Chinese authorities located at least 22 fake Apple stores last year), but welcoming the genuine article onto the Chinese e-commerce market would help restore buyer trust.
Below are three important things to remember for both Western companies entering the market and Chinese brands launching an online presence:
- Service is vital to e-commerce the world over, but there are certain things that Chinese shoppers are accustomed to. These include fast delivery (usually 1 – 2 days), and a rapid response to queries; Chinese consumers prefer to chat a product through before buying, which means having a knowledgeable customer service team poised and at the ready to answer questions (at all hours!)
- E-commerce platforms can often generate more revenue than your own online store – TMall, China’s market leader, accounts for roughly 45% of business to consumer sales.
- Social media is linked incredibly closely to e-commerce in China. 85% of consumers write about their shopping experience using social networks (the most popular being micro-blogging platform Sina Weibo), and over half use social media to discuss foreign brands.