9 Ways To Sell In China Tips For Ecommerce Marketers
There are several barriers to come-in in the Chinese online marketplace, but there is a massive opportunity for savvy eCommerce businesses.
You don’t need to have a Wharton MBA to see the potential Chinese market for eCommerce.
China is the world’s most populous country. It has the second-largest economy with nearly $16 billion. Remarkably, most of its economic growth occurred in the past three decades.
This potential will likely make you drool if you are like most foreign companies (i.e., not based in China).
Unfortunately, it is notoriously difficult for Western companies to enter this market because of its unique challenges. These include:
- It is difficult to navigate a complicated and inconsistent bureaucracy.
- Poor understanding of consumer buying patterns.
- Problems facing the government include corruption and lack of transparency.
- Local labor can be sourced and managed by employees.
- Intense competition (and rules are favoring domestic companies).
It’s possible, but it’s not impossible. The benefits far outweigh any time and cost.
This article will discuss the unique challenges that eCommerce businesses face and offer nine tips for eCommerce companies to help them not only get in on the ground but also succeed.
Marketing Tips In China
1. Understanding Chinese Consumer Behavior
Chinese digital shoppers behave differently from their European and American counterparts.
One thing is that search engines from Western countries are not present in the PRC due to censorship laws.
Instead, Chinese search engines are home-grown, and each has its niche.
The vast majority of these shoppers use them on mobile devices. 99.7% of Chinese internet users access the web via their smartphones.
These are not the only differences in consumer behavior.
Chinese people also prefer single entry-point shopping, where they can shop from multiple brands rather than a single company.
They are more likely to purchase Nikes from Tmall, an Amazon-like shop, than from the Nike website.
Influencers and social media influence Chinese consumers heavily.
Chinese companies encourage celebrities to use their app as a platform for product launches. It’s easy for shoppers and fans to search online for the exact shoes they saw on their favorite stars via direct links in social media posts.
A country’s rapid economic growth has also led to a greater emphasis on customer service and quality.
2. Choose the Right Products
While previous Chinese generations valued the benefits of society and wanted to collectivize, Chinese consumers today are more focused on their individuality.
Accenture, a professional services organization based in Ireland, found that the release in consumers who are wi purchase products that reflect their identity between 2013-2021.
This is not surprising in a country with more than 700,000,000 middle-class residents.
You must sell the products they are looking for to ensure your eCommerce marketing is successful in the PRC.
The Chinese digital market is hot for products that are used in leisure, technology, beauty, makeup, and clothing.
Although there is a lot of demand for products from abroad, they should be treated as premium alternatives to those made in the country.
According to the South China Morning Post (an English-language newspaper owned and operated by Alibaba), China will claim a 32% share of the global luxury goods industry in 2020.
This is an excellent opportunity for foreign companies looking for ways to expand in China.
3. Get local hosting for your website
Chinese search engines are more likely to rank websites that are hosted within China as they tend to be the most popular. It is not enough to launch a Mandarin version of your existing online shop.
A site hosted in China will help you appear in Chinese consumer searches. It is not as easy like just clicking a few buttons to fill in your credit card details.
You must first apply for an Internet Content Provider registration (ICP) with the Chinese Ministry of Industry and Information Technology.
You may need permission from the relevant government agency depending on your industry (e.g. education, healthcare, or financial services) before you apply.
If you intend to process data or transactions, you will need your ICP commercial license.
An ICP is not necessary if you intend to have a physical presence there.
Be aware that if you do require one, it may take several months.
4. Use trusted payment processors
China’s payment system is different from yours.
One thing is that the model can vary depending on the type and amount of transactions. While you could attempt to navigate the complex requirements by yourself, it is recommended that you use a third-party online payment platform such as Alipay or Tenpay.
Alipay, a payment method used by Alibaba to pay major Chinese eCommerce platforms such as TMall or Taobao, is Alibaba’s primary payment method. To reduce the risk of receiving payments, it offers escrow capabilities.
To use it, you will need a Chinese telephone number, bank account, as well as a Chinese business license.
Tencent’s Tenpay offers escrow, and it is easier to set up.
You must show Tencent that you are interested in doing business in China and provide proof of a foreign eCommerce site to receive your license.
This will require a China-visible WeChat Account, a cross border payment account, and a WeChat eCommerce website.
Not all licenses can be applied for through Tencent.
Product inspection certificates, which attest that your products meet agreed-upon quality standards, can reduce your payment risk.
5. Deliver exceptional customer service
Chinese business is built on a concept called Guanxi. This term refers to personal relationships with an implicit level of trust and mutual obligation.
This has been a critical aspect of business for centuries. Chinese consumers expect hierarchy, negotiation, customer service, and a sense of belonging.
The first two aren’t as crucial for eCommerce businesses, but the third is.
The digital marketplace is fiercely competitive, so Chinese customers are used to receiving superior customer service.
They expect and should receive fast delivery and returns, clear communication in Mandarin and mobile payment options.
They are not afraid to voice their belief on social media sites. Bad customer experiences can have a wide-reaching impact.
6. Select the Right Logistics Solution
Customers in China will be turned off by late deliveries, damaged products, and brutal returns policies. This means that your logistics must be solid.
It can be hard to find high-quality providers in mainland China.
You have three choices: Partner with existing companies, acquire them or look for a third-party provider.
For most eCommerce businesses, the first two options are too time-consuming and prohibitively costly. Therefore, there is only one option.
Two categories generally apply to logistics providers in the PRC:
- Large networks are what companies compete on.
- Superior service is what differentiates companies from others.
The product you are selling will determine which one is best for you.
For example, pet rocks in China are more critical than service for the exam.
Enure that your product will not be damaged. Your primary goal is to get it into the hands and possession of the buyer wherever they are located.
A smaller logistics company that can provide better service and care is preferred if you sell crystal birdhouses within the Shanghai metro area.
7. Use the Top Marketplaces to Reach More Shoppers
As stated in the first tip, Chinese online shoppers are more inclined to shop on marketplaces than on brand websites.
Although you can still sell through your website, it will be easier to reach a wider audience if you are part of one of China’s largest online marketplaces like Taobao or Tmall.
In 2019, Taobao’s gross merchandise volume surpassed $490 million. Tmall came in second place at $463.5 billion, and Jingding was third at $301 billion.
These sites are responsible for a staggering amount of sales, as you can see. Alibaba owns both Taobao (or JD) and Tmall (or Tmall). Tencent supports Jingding (or JD).
These platforms require that your company is registered in China. However, there are exceptions for specific product categories.
These platforms cannot be interchanged. Tmall is generally considered the luxury version of Taobao. Consumers trust it to source authentic brand items from overseas.
JD sells a variety of products, including frozen foods and electronic books.
8. Shop Festivals: Take Advantage
China’s major shopping events are similar to those of Western online retailers.
These are important to maximize your sales. These are:
- Pre-New Year (January-February). – Much like Christmas Day sees huge shopping volumes in the West, the months before Huo Festival and Chinese New Year are busy times for rce sellers.
- International Women’s Day (March 8th) – Also known as the “Queen Festival” (by Alibaba) and the “Butterfly Festival (by JD), this day and the one before (Girls’ Day on March 7th) are huge online shopping days for men who give gifts to their significant other.
- Mother’s Day – Filial piety in Chinese culture is integral to Chinese culture. Therefore, it’s not surprising that Mother’s Day is so popular, and there’s a significant increase in gift buying.
Love Day (May 20, 2018) is unofficial Valentine’s Day. Love Day falls on May 20th because “five and zero” in Mandarin means “I love you.” Valentine’s Day can also be celebrated on a traditional date.
- Midyear Shopping Festival – China’s answer for Prime Day. This summer event was initiated by JD but has been adopted by other online retailers.
- Golden Week (October 1st) – A massive influx of spending marks this week-long holiday due to traditions such as travel, family reunions, and gift-giving.
- Singles Day – 11/11 was first celebrated in 1993. It has since become a primary online shopping day where people can celebrate being single. Singles Sequel is celebrated one month later, on December 12, 12/12. Many online retailers hold inventory clearance events.
9. Promote on Chinese Social Networks
Chinese people love their social networking platforms as much as the rest of the globe.
While none of these features have direct connections to more familiar platforms such as Facebook and Instagram., many others share similar characteristics, including paid advertising.
Tip : We mentioned the role of these sites in online sales.
Influencers can click on an item in Chinese social posts and link directly to the item in an online shop. This is a great reason to venture into this market.
Additionally, like Westerners, the Chinese spend much of their day on these sites. This means that well-placed products can generate a lot more exposure.
These are the top social media sites in China:
- WeChat– Sometimes called Chinese Facebook, WeChat combines Facebook, WhatsApp, and Google News. It boasts 1.2 million active users per month worldwide. It is Tencent’s all-in-one messaging platform. It also offers shopping and games.
- Sina Weibo 252,000,000 people use this microblogging app each month. It’s very similar to Twitter in that there are character limits and allows for posting images, videos, and gifs.
- Tencent Video is the fourth-largest streaming service in the world. Tencent Video has over 1.2 billion active monthly users. China’s online video market can be highly competitive. Tencent Video leads the pack, surpassing rivals IQiYi, Youku, and more.
- Xiao Hung Shu – This hybrid e-commerce/social networking site allows users to leave reviews, join discussions and create content. The majority of content is focused on shopping experiences and product photos. It has 200,000,000 monthly users. It integrates functionality that allows users to download ebooks and listen to music. Users can also purchase tickets for movies or concerts.
Chinese Ecommerce is Worth the Work
It takes huge effort to get into China’s digital market. It’s worthwhile, however, because online shopping is an integral part of the Chinese economy.
You will likely face cultural, legal, and digital obstacles. Setting up your business will take longer than you are used to.
You will be able to gain a foothold in one of the largest online markets if you have the patience, time, and language skills to understand the complex bureaucracy.
Chinese people are very interested in high-end brands. This doesn’t mean that you should be in a luxury goods business.
Businesses of all sizes & types have a tremendous opportunity to tap the Chinese online marketplace.
You’ll be a successful eCommerce player in China if you do your research and follow the correct channels.
