The Chinese online market is by far the largest in the world, its volume is about double of the one in the United States of America. E-commerce business in china is impressive given that in the past decade China accounted for only 1% of the volume worldwide, while now it’s ranking in the first position, with a share above 40% of the global market. The expansion of this market grew parallel with the evolution of the consumer habits, which nowadays use smartphones or computers to buy all kinds of goods and services.
The Chinese e-commerce market is growing steadily (In 2018, e-commerce sales accounted for more than one quarter of retail sales in China) it is advanced and certainly full of opportunities for foreign companies, even if the competition is very intense, mostly related to the difficulty of entry and positioning of the foreign operators (especially in the segment of platforms).
Several local e-commerce companies have reached massive sizes, becoming real centres of interest (and power), and starting expansion also abroad in search of new markets, especially in other Asian countries. Moreover, Chinese products’ aggressive price and competitiveness it’s a major factor. Chinese companies are extremely reactive to their competitors and are able to find inspiration (or even copy) from other products in order to create their own version of it and sell it cheaper. However, there is still a wide room for growth, particularly in the specialized channels.
Starting your e-commerce business in China
Conducting market research is without a doubt the first step every company needs to undertake before planning any operation within the target market. It is important to understand many factors as the:
- product/service appealing;
- competition analysis;
- brand, product or service awareness;
- consumer behaviour;
- Target audience.
Just to name a few.
It is even more important to conduct this preliminary study in the Chinese market as the product and services that have been successful in the western market, might not have the same result in the Chinese one. Chinese consumers have different needs, values and context (historical, social and political), different consumer behaviour and purchase journey. For instance, Chinese consumers tend to buy products recommended or reviewed by the KOL they follow on social media, and the actual purchase decision is made online rather than in an offline shop. They like to receive their products at home, try them out and eventually send them back or change them. In order to be successful, it is very important to verify your plan with your target market.
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