When it comes to online retail markets, China is in a class by itself. The country is already home to the
Chinese consumers are attaining middle class spending power at a historically unprecedented rate and using it to treat themselves to personal luxuries. That spending has made the country the worlds fastest growing vanity goods marketincreasing by 15% year over yearfor such purchases as high-end fashion and beauty goods, jewelry, and personal care items.
China presents a vast growth opportunity for international retailers, and like any business expansion, requires a considered approach. Its important to understand the market, its nuances and challenges in order to succeed.
In 2013, online purchases accounted for 8% of the countrys total retail sales. E-commerce transactions totaled USD $305 billion that year, and Singles Day, the popular online shopping holiday in November, accounted for USD $5.7 billion of that total. E-commerce in China already outpaces that in the US, and within 5 years its expected to dwarf
That booming growth is due in part to the rise in mobile phone usage among Chinese consumers, which helps them bypass brick-and-mortar shopping obstacles such as distance and traffic. It also owes something to Chinese internet-use habits. According to a McKinsey & Company
China is a huge nation with a middle class that will soon top 630 million peoplemore than 8 times larger than the US Baby Boomer generation that was once the worlds leading middle-class consumer demographic. According to McKinsey, only 4% of Chinas urban residents were middle class as recently as 2000. By 2020, 75% of Chinese urbanites will have middle class status and newfound spending power.
In general, Chinese shoppers like international brands and upscale goods, so offshore retailers have a certain cachet. French wines, American electronics, and Italian designer clothing are popular prestige purchases among Chinese shoppers. In a competitive market, your companys outsider status can be an asset, especially if its backed up by excellent quality control and responsive customer service.
Beyond that, experts recommend
Determine which cities and regions are a good match for your product line, and give serious thought to how you will market to those areas, as the most popular channels may be ones your company is not currently using. The McKinsey report on Chinese consumer internet habits makes the point that online video and instant messaging are more popular with Chinese online shoppers than email and search, which are prevalent in the US.
Promote sales timed to major in-country shopping holidays, such as Singles Day in the fall and the Lunar New Year
As an online merchant, your customers can reach you from anywhere, but as the Australia China Quarterly
In order to save on fees and avoid tying up cash in a security deposit, offshore merchants always have the option to sell independently. To do so successfully, Daria said, such merchants must seek out a payment services provider that supports multicurrency transactions and has established relationships with in-country banks and with
No matter what size your online business is, China is a market worth exploring. Capturing even a small percentage of this large and robust market can yield rewards now and in the future as Chinas economy and purchasing power continue to grow.
Kirsty Tull is marketing manager for BillPro.