E-commerce in China: one market, several ways in
While Chinese people’s purchasing power keeps on increasing, their access to Internet improves year by year. These two trends lead to an unparalleled phenomenon: the development of the Chinese ecommerce. In 2017, China numbers more than 770 million web users, among them, 69% are online shoppers. This tendency significantly relies on the rise of mobile phone users, since 506 million of them are ecommerce customers. China is thereby the largest market of online consumers.
For foreign brands, it is an opportunity to make their first steps in China, without opening a physical store. Besides the language barrier, firms have to find the right market entrance. There are many ways in, but they are difficult to access.
Brand apps and ecommerce platforms
To purchase online in 2016, 65% of the Chinese mobile phone users directly open commercial apps on their phone. Its means they use either brands’ official apps or ecommerce platforms’ apps. This latest is the most common and it is a very convenient way to get known on the Chinese market.
There are many platforms like Kaola, VIP, Amazon, etc., hence the importance to make the most appropriate choice. Should you choose a generalist platform, such as the major player Tmall? Or its rival Jingdong? Would you prefer a smaller and specialized one, like Jumei, which mostly sells makeup? Indeed, each platform has its own characteristics and reaches different audiences. Kaola for instance targets cross border ecommerce consumers, namely foreign brands’ clients.
Moreover, all the platforms don’t offer the same spectrum of services, and they rely on different business models. VIP for example, has mostly a role of retailer. It takes over promotion and communication services. On the other hand, it is possible to open a marketplace on Tmall, where the brand itself manages promotion and communication. The choice of a platform must be the result of a strategy that is adapted to the type of products.
Screenshot of VIP.com welcome page. It shows time-limited special offers of several brands’ clothing and fashion accessories.
It can also be very useful to possess a showcase or a commercial website. But once again, there are some complications. First of all, commercial websites need legal authorizations to function, which are hard to get without a Chinese intermediate. In addition, China’s internet referencing is different from Google’s one. In China, the giant Baidu reigns over online researches, it prefers advertisements and sponsored websites to natural referencing.
Furthermore, it is essential not to translate a website from a foreign language to Mandarin. Chinese consumers appreciate to find information on websites conceived according to a special design. For instance, they like intuitive websites where only few clicks are necessary to order and pay products. Thus, it is better to adapt a website to the multiple Chinese digital marketing standards.
Screenshot of L’Oréal’s French (above) and Chinese (below) websites. Shown products and informations are different.
The giant WeChat
As most of western social networks cannot be accessed from China, it is necessary to use the available ones on the Chinese market. The messages app WeChat is an impressive example of the Chinese ability to bring innovation, in the field of social networks. Since March 2018, it is used by more than one billion users. It is possible to share contents and to access numerous services. With only one click, people can order food, book a taxi and pay by phone.
This app allows companies to create an official page, which can be used to communicate or send notifications to users that follows it. A brand’s website can directly be opened in the app. Chinese mobile phone users hence have a very convenient access to brands’ services.
Since there are two kinds of official pages on WeChat, it is necessary to determine which one is the most adapted to the company. The subscription account offers to publish content daily, but has limited exposure. On the contrary, the service account allows to publish only four times a month, but notifies users. Besides, this account enables other services such as online payment.
WeChat promises to keep on creating new ecommerce canals. In 2017, it launched the mini programs, which are kind of mini apps handled by WeChat. Thus, Chinese users seldom need to download additional apps. They can be opened through WeChat and it spares phone storage. Ecommerce platforms are invading mini programs and it will probably compete with Tmall.
There are other ways to encourage Chinese consumers to purchase a product. Numerous brands are recommended by “Key Opinions Leaders” (KOL). They use multiple canals, such as live streaming or social networks to promote products. Newsletters and mailing are still employed but their use is on the wane. Thus, entering the Chinese market thanks to ecommerce is a promising way. However, it implies to clearly define a strategy.
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