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China Accounts For 40% Of Global E-Commerce, But It’s A Tough Market For Non-Chinese Retailers

China Accounts For 40% Of Global E-Commerce, But It’s A Tough Market For Non-Chinese Retailers

China is a retail powerhouse, and the habits of its consumers affect retailers worldwide. The country accounts for 40% of the world’s retail e-Commerce, and Chinese shoppers commonly make purchases from international web sites, according to Daniil Silvestrov, Director of International Operations at Admitad, a network of advertising affiliate programs.

“Many Chinese consumers believe goods made in China are cheaper and of lower quality and are wary of fake products on the market,” said Silvestrov. “For this reason, many of China’s residents have a distrust for Chinese stores and prefer to make purchases online.”

However, it’s not easy for international companies to make a splash in a market where well-established retail giants Alibaba and JD.com are so firmly entrenched. Foreign businesses can’t advertise in China without a Chinese business license, which requires an office in the country, and other challenges abound. Some tips Silvestrov offered newcomers include:

  • Localization is crucial: Many newcomers to the Chinese e-Commerce market fail to translate their web sites or do a poor job of it, which can turn off potential shoppers. Additionally, pay attention to local cultural norms and the holiday calendar to avoid missing important shopping days.
  • Retailers need a reputation: Delivery times can be long, and customers don’t like dealing with the headache of returns. Retailers need to establish themselves as a trustworthy source before they can build a following online.
  • Understand how customers shop: Retailers should be aware of common payment methods used by Chinese shoppers, including credit and debit (29%) and Alipay and WeChat Pay (27%). Shops also must be mobile-friendly: 70% of online purchases made in China in 2017 came from a mobile phone.

“This crowded and rapidly growing market is always receptive to technologies that simplify routine processes associated with choosing goods and executing a purchase,” said Silvestrov. “This opens up the opportunity for the emergence and development of new players who will take into account all the local characteristics of Chinese buyers and the market itself.”

In general, it’s important for retailers to pay attention to the difference between the Internet in China and elsewhere. Popular platforms like Facebook and Google aren’t available, while the country’s various social media platforms are relevant outlets for advertising. Important social media platforms include:

  • Sina Weibo, analogous to Twitter;
  • Toudou Youku, similar to YouTube;
  • Meituan-Dianping, akin to Yelp; and
  • Meipai, a video-focused platform in the style of Instagram.

Of particular interest is WeChat, which is one of the most popular social media services in the country. Retailers can create stores on the site to help boost sales, in addition to taking advantage of its payment platform.

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