Think you’ll need a website to sell your product in China?
Websites, while essential for brand building in the West, are far less important in China. Instead, leaders focus on WeChat for marketing; and JD, Tmall, WeChat, and others as transaction engines. It’s a very different model than we’re used to in the West. Knowing the differences is mission critical for quicker time to revenue.
The opportunity is big
China’s e-commerce retail sales totalled $900 billion in 2016 and are expected to top $2.4 trillion by 2020, exceeding Europe and the USA combined. There are opportunities for Western companies to sell China-produced goods in China and also Western-produced goods in China (the latter are known as “cross-border” goods). Approximately 40% of China consumers online bought foreign-made cross-border goods totalling $87 billion in 2016.
The channels we use in the West like Amazon.com don’t have the same power in China. Amazon’s share in China is in the low single digits. Names you might not be as familiar with like Taobao, TMall and JD.com are less known to Westerners, but they are very big players in the world of China e-commerce. Prioritizing and launching products on the right channels is vital.
Credit cards, the payment solution of choice in the West, are not often used in China. Instead, China’s consumers use:
- Alipay, launched in 2004 by the Alibaba Group, owner of e-commerce platforms Tmall (formerly Taobao Mall) and Taobao (eBay-like consumer portal).
- UnionPay, run by China’s top four state banks.
- Tenpay, a unit of Tencent
The bottom line
It’s all about making it easy for China’s consumers and giving them options with which they are comfortable. Your website will not be the preferred way consumers want buy in China. China is a “low-trust society” and, as a result, consumers prefer using large commercial e-commerce platforms like the ones discussed here. The space is changing weekly. In 2016, WeChat evolved as a serious player for marketing and is expected to challenge e-commerce giants like Tmall and JD.com for managing transactions in the coming months. Mastering flexibility and agility in China’s dynamic environment is key.
This post was written in collaboration with our friend
Paul Stepanek, Founder, “Complete Manufacturing and Distribution (CMD)
Looking for assistance step by step? Complete Manufacturing and Distribution (CMD) is trusted by clients to accelerate results. Whether you need to design, develop, operate, or sell products in Asia, seasoned experts at CMD accelerate results for lasting competitive advantage. CMD serves clients worldwide from offices in China, The United Kingdom, and USA. For more information, visit www.completeMAD.com. Here’s an article re: our take on e-Commerce laws. http://www.completemad.com/in-the-news/doing-ecommerce-in-china-pending-rules-may-impact-you
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