China has become the largest online market in the world, representing a very attractive volume and sales margin for any foreign brand. Consequently, the number of companies that are exposed to the Chinese market through e-Commerce in China is increasing.
China has become the largest online market in the world
E-Commerce in China has established itself as the most profitable industry in the country, whether for small businesses as well as larger ones, all thanks to the influence of the Chinese market throughout the world.
Throughout the article, we will discuss e-commerce in detail, but not before examining the difference between electronic commerce and traditional commerce in China. After that, we will examine the specific steps necessary to sell in China and some of the keys to e-commerce in China.
If you are interested in introducing your company or brand to this market, do not hesitate to contact InfluChina, an e-commerce agency in China whose purpose is to promote the presence of foreign companies in China through strategic collaborations with Chinese influencers.
If you are interested in introducing your company or brand in this market, do not hesitate to contact InfluChina, an e-Commerce agency in China
1. E-commerce in China vs traditional commerce
To differentiate electronic commerce vs. traditional commerce, we must take into account that, in traditional trade, buyers and sellers communicate directly, in person. In contrast, in e-commerce there is an indirect interaction with the customer because the customer may be miles away from where they place their order.
First of all, we have to understand that digital transformation in China is very high, with 99% of all users accessing the internet from mobile devices, while more than 70% of the entire Chinese population has access to the internet, with 100% being the main goal in the next 10 years.
Finishing with the differences between electronic commerce in China vs. traditional commerce, we can also see them in the fact that, in the last year, China has generated 672 billion USD in e-Commerce sales, compared to 340 billion in the United States.
More than 70% of the entire Chinese population has access to the internet, with 100% being the main goal in the next 10 years
2. Current Chinese e-commerce data
To get a good look at the current Chinese e-commerce data, We must take into account that, as detailed in the report Paycomet, that 77% of China’s total sales are through the Internet, ranking first compared to 44% in South Korea, which is in second place.
Furthermore, as we see in the following graph, the online shoppers in China increase exponentially each year, having reached 884 million by the end of 2023, according to ICEX data.
On the other hand, last year, the so-called “titans” of e-Commerce in China increased sales in Spain by 40%. In 2023, the average spending per customer in Miravia was 30 euros, 24 euros on Temu and 35 euros on Amazon.
Online shoppers in China are increasing exponentially every year, having reached 884 million by the end of 2023
Finally, to clarify the importance of this emerging market, it is worth noting that revenues are expected to grow at an annual rate of 12.42% by 2027, resulting in a projected market volume of $2.375 billion.
3. How to start selling online in China
Now that we know what e-commerce is in China and the differences between electronic commerce and traditional commerce, we can move on to the steps to follow to sell in China effectively.
These steps are of great importance and must be followed meticulously, especially if you are a company or organization that does not have any presence in the Asian giant. From InfluChina, we propose the following key points.
Study your market in China
The first and indisputable step to selling in e-commerce in China is to study your market and sector in the Asian country in detail. Without having this knowledge, you will not be able to establish good competitive strategies that take you to the highest.
The first and indisputable step in selling in e-commerce in China is to study your market and sector in the Asian country in detail.
It is crucial that you start with a competitive and product analysis: know all the competitors, understand what and how they do it, what are the strategies that lead them to be at the top, and what are their effective ways of promoting the products and services that your company offers.
It is crucial to have a market study previously carried out to define the strategy and to be able to make informed decisions justified by data. If not, you are basically going blind in a market that is so complex and different from the West.
By carrying out a good market study, you will be able to know and identify all the desires and consumer needs for the Chinese audience, analyze the competition, evaluate marketing channels, and adapt your products to the harsh demands of the Asian market.
China’s economy is rapidly expanding, with increasingly intense competition, significant socioeconomic and regional disparities, and constant government regulations. Therefore, consumer-oriented companies must conduct market research in China to develop appropriate market strategies.
We suggest carrying out a market study with the following steps:
1.Analysis of your sector:
- Market summary (history and current situation).
- PEST analysis (political, economic, social, and technological factors).
- Market trends.
- Online and offline distribution channels.
- Analysis of the different product formats in your sector.
2.Analysis of target consumers:
- Analysis of consumer behavior.
- Consumer journey (B2C).
- Consumer analysis by geographical areas.
- Moments of consumption and consumption barriers.
- Purchasing power by cities.
On the other hand, in addition to executing this competitive and product analysis and knowing the regulations, it is essential to know all the restrictions specifically existing ones, which are not few, and study the import processes of your particular sector. The third step would be:
3.Competitive analysis:
- Analysis of products, sales formats, and prices.
- Presencia online vs. offline.
- Digital strategies and marketing campaigns.
It is essential to know all the specific restrictions and study your particular industry import processes.
Define the location of storage and logistics
The next step to effectively selling in China is to clearly define storage and logistics locations. You can choose to have the storage in your home country or in China, and based on that decision, you can make cross-border e-commerce basic electronic commerce.
The marketing of products over the Internet between two parties hosted in different countries is known as cross-border commerce or cross-border e-commerce (CBEC). In addition to the web platform, it includes payment gateways, logistics, marketing, and other processes.
You can choose to have the storage in the country of origin or have it in China, and based on that decision, you can do cross-border e-commerce or basic e-commerce
It must be taken into account that, unlike Tmall, not all e-commerce platforms in China offer the possibility of cross-border trade or internal trade (from China), so it may be a good option.
Select the e-commerce platform in China most appropriate for your product
There is not a single suitable e-commerce platform in China, but you have to use those that are most appropriate for the sector where you are, for your target audience, and for the changes and needs of the market.
There is not a single suitable e-commerce platform in China, but you must use those that are most appropriate for your sector.
However, here we mention in detail what the most effective e-Commerce platforms in China are for any company interested in penetrating the market, taking into account the corresponding adaptation that must be carried out after analyzing your market.
Tmall
Tmall has established itself as the most used e-commerce platform in China, where many famous companies already have stores to sell their products and services. This is one of the main strategies for reaching Chinese consumers.
Tmall is an e-commerce platform of the Ali Baba group that allows companies to sell their products directly to Chinese customers. It is a multi-category platform that targets a very diverse audience and offers a wide range of items, so there are many potential customers.
Tmall is an e-commerce platform from Alibaba Group that allows companies to sell their products to Chinese customers directly.
We have to keep in mind that not only is Tmall, but it also has two divisions: Tmall Classic and Tmall Global.
If a company wants to start in the Chinese market, we recommend Tmall Global, since it does not require physical presence and, therefore, will have less administrative burden. On the other hand, if you already know how your products and your sector work in the Asian country, you can use Tmall Classic.
JD.com
If you want to market a product in China, JD Worldwide, a powerful e-commerce platform, is a very promising option. It has become a leader in the e-commerce sector in China, both due to its growth and the evolution of your profits.
JD.com is an online marketplace created by Chinese entrepreneur Liu Qiandong, based in Beijing, China. This e-commerce platform in China offers a wide range of goods and services in all major categories.
With more than 9,800 stores, the electronics and appliances category would be the strongest niche in the market if we had to choose a category to sell on JD Worldwide. Both the auto parts and cosmetics categories also attract big brands to the JD Worldwide platform.
The electronics and home appliances category would be the most substantial niche in the market if we had to choose a category to sell on JD Worldwide
Xiaohongshu
Xiaohongshu, also known as Little Red Book or RED, is a Chinese social network that has integrated e-commerce functions for some time. These functions have caught the attention of many brands, as users can make purchases with just a few clicks.
European brands active in the Chinese market are paying close attention to Xiaohongshu’s social e-commerce application. In such a diverse and constantly changing digital field, this application is gaining popularity.
Although most purchases are completed on Tmall, users can continue purchasing within the Xiaohongshu platform by clicking on the shopping cart image once they have found the product they are looking for in said application.
Several global manufacturers are already exploring the application. Gucci, Givenchy y Saint Laurent are among them. Additionally, this platform is ideal for brands that operate within the categories of cosmetics, fashion, food, accessories and tourism, in addition to being a significantly cheaper option than Tmall and JD.
This platform is ideal for brands operating within the cosmetics, fashion, food, accessories, and tourism categories, as well as being a significantly cheaper option than Tmall and JD
Pinduoduo
When it comes to e-commerce in China, Pinduoduo is unforgettable thanks to its millions of users. It is one of the most important platforms after Tmall and JD.com, the giants in the sector. Based on the social commerce business model, Pinduoduo is best known for its group purchasing feature.
This means it relies heavily on social customer experience to entice customers to complete their purchases. This function of group purchasing and the consumer-to-manufacturer (C2M) model of Pinduoduo make it the most innovative social e-Commerce platform in China.
One of Pinduoduo’s advantages is its attractive prices and discounts on products. The products are usually reasonably priced and accessible to everyone. All users can use the aforementioned group purchasing feature to reduce prices further.
One of the advantages of Pinduoduo is their attractive prices and discounts on products
Douyin
2018 was the year when Douyin launched its e-commerce platform in China. The app partnered with several online retailers and other e-commerce platforms, such as Taobao and JD.com, to allow users to buy products directly from the app.
The online store function of Douyin in 2020 allowed brands and retailers to establish their own online stores within the app. This function has been a great success since its launch, as it allows users to buy products from the application, which in turn allows brands to reach an engaged young audience.
The online store function of Douyin In 2020 allowed brands and retailers to set up their own online stores within the app
Additionally, the platform has worked closely with brands and sellers to help them maximize their presence on the platform, providing them with advice and recommendations on how to improve their online presence.
Finally, Douyin has launched various advertising tools to help brands and sellers increase their reach. These tools include video ads, story ads, and brand ads.
Find a TP (Tmall Partner) or e-Commerce agency
The last step to effectively selling online in China would be to find a Tmall Partner or e-commerce agency in China that supports you and manages everything necessary to establish your company in the Asian country, as is the case of InfluChina.
Between the services from this Tmall Partner or e-Commerce agency, we find the following:
- Analysis of the market and competitors– A Tmall Partner analyzes competitors’ effective strategies and changing industry trends.
- Branding and marketing strategy: This e-commerce agency, like InfluChina, will also help you define a personalized strategy aligned with your product, objectives, and audience.
- Store creation: opening and setting up the store along with the products and the corresponding descriptions.
- Operations and logistics management, inventory management, updating product lists, and monthly reporting of the store’s status are also included.
- Customer Support.
- Implementation of marketing campaigns: The Tmall Partner also takes care of the management of promotions during e-commerce festivals, synchronization of campaigns through social networks, in-store advertising campaigns (within the corresponding e-Commerce platform).
Thus, feel free to contact InfluChina if you are interested in having a Tmall Partner or e-commerce agency in China to penetrate the universe of electronic commerce effectively in the great Asian country.
The last step to sell online in China effectively would be to find a Tmall Partner or e-commerce agency in China
Other keys to boost your online sales in China
To finish the article, we would like to talk about three keys to boosting your online sales in China, which are decisive when it comes down to it and knowing whether a company will have an effective strategy or not to enter e-commerce in China.
Collaboration with influencers
Influencers have become an essential part of digital marketing and advertising in the age of social media. Chinese influencers, known as KOLs, are people with many followers on social networks.
Collaboration with Chinese influencers is one of the pillars of success in the Chinese market. Consumers trust them more and more, and they have a great reach and are authentic people who influence the purchasing decisions of all potential clients.
Collaboration with Chinese influencers is one of the pillars when it comes to being successful in the Chinese market
If you need help, InfluChina may be a good option for your company. It is a marketing agency in China that promotes the presence of foreign companies in the complicated Chinese market through strategic collaborations with Chinese influencers.
Implement a multichannel strategy
In this difficult market, it is never enough; being present on e-commerce platforms in China is vital, but it is also essential to create an authentic presence on major Chinese social networks. Below, we briefly mention some of the most important ones, taking into account the objective of your company:
- WeChat: helpful in building audience loyalty.
- Douyin: The main objective is to viralize content and generate reach.
- Xiaohongshu:View and review products, among other things. These reviews will be essential to build trust among Chinese consumers.
- BiliBili: Platform to watch videos, anime, documentaries, and much more, similar to YouTube.
Localization of the brand
By localizing the brand, we mean taking into account that Chinese culture is very different from Western culture, so specific steps will have to be taken to adapt to this target audience:
- Website in Chinese.
- Give the brand a Chinese name: You have to take into account the pronunciation and phonetic sounds, finding Chinese characters that are assimilated to the brand’s Western pronunciation.
- Localization of the logo in accordance with the culture in which it is intended to penetrate.
FAQ
Frequently asked questions about e-commerce in China
Which is the best e-commerce platform in China
While it depends on the brand’s objective, the main e-commerce platforms in China are Tmall, Pinduoduo, JD Worldwide, and Douyin.
How much does it cost to open an online store in China
To open an online store in China, it is necessary to pay an annual verification registration cost, an initial deposit, and a variable commission depending on the product category.
What does e-commerce mean in China?
e-Commerce in China refers to the growing and profitable electronic commerce in China.
What is e-commerce in China?
Electronic commerce in China, also known as e-Commerce, refers to any type of economic or financial transaction for the sale and purchase of products or services carried out over the Internet and other communication networks.
Which is better, e-commerce vs. traditional commerce?
Electronic commerce is much more critical than traditional commerce as a consequence of the high digitalization of our societies.
What is the main advantage of e-commerce?
E-commerce is mainly cheaper, easier, faster, and more convenient.
What is cross-border e-commerce in China?
The marketing of products over the Internet between two parties hosted in different countries is known as cross-border commerce or cross-border e-commerce (CBEC).