Chinese eCommerce is exploding. Today, there are over 600 million Internet users in China whose cumulative buying power has propelled China into first place as the fastest-growing and biggest eCommerce market in the world. But amidst this highly lucrative – yet complex – market, how can foreign-based retailers and brands best capitalize on this growth?
The statistics are staggering: Chinese eCommerce is currently growing at 3X the rate of the US and Europe and by 2019, Forrester predicts that online spending in China will reach one trillion dollars.
Whether you’ve already established a Chinese eCommerce operation, or you’re contemplating your initial move, how do you know whether you’re succeeding or failing in the world’s biggest and fastest-growing eCommerce market?
China is incredibly diverse encompassing many different ethnicities, as well as cultural and societal differences between its regions. A consumer in a tier 1 city such as Beijing or Shanghai will likely be more affluent than a consumer in a tier 3 city, therefore a one size or price strategy does not fit all.
The competitive landscape is changing on multiple fronts, therefore continually keeping abreast of the brands, pricing and assortments that you’re competing against on a region-by-region basis is key.
2. Find the right brand partners
Doing business in China is incredibly complex, so you need to proceed carefully when determining what partners and channels you choose to sell your products.
Whatever partner you select, it’s wise to hire local business entities and talent to help you navigate your way through an ever-challenging landscape.
3. Behold the power of Chinese consumers on social media
79% of Chinese internet users log onto Weibo – China’s version of Twitter – at least five times a week. It’s one of the reasons that Forrester describes the Chinese as “hyper social” and it’s why Chinese consumers so eagerly share information on social media.
It’s vital to be able to track what consumers are saying about your product at all times – not only across social media outlets, but across all eCommerce websites – to keep your finger on the pulse of what’s trending or ebbing with buyer opinion.
4. Manage price with great dexterity and even better analytics
Research by Bain has revealed that 70% of Chinese consumers state they compare product pricing before they buy – across all personal income levels.
Having access to actionable analytics is key to ensure you have the right pricing and promotional strategy in place. By leveraging a timely stream of competitive pricing data, you can ensure you stay one step ahead of your rivals online and in the process establish yourself as a pricing leader.
5. Know that Chinese shoppers set the competitive bar very high
Whilst Chinese shoppers are keen bargain hunters, they’re also very demanding when it comes to products and services. Once a sale is made, they have the highest expectations that a fast, flawless logistics operation will deliver their products to them in minimal time.
Regardless of how small or large the purchase price, it’s essential to gain visibility into how your products are being sold online, what the competition is doing, and how to generate insightful strategies that enable you to maximize your eCommerce investment.