5 Expert Tips to Help You Navigate the Chinese E-commerce Market

April 26.2018
expert tips tmall ecommerce market

There are countless e-commerce platforms in China and a growing number of cross-border e-commerce platforms introducing high quality foreign products to China. The B2C e-commerce market size has been growing at high speed in the past decade. It is predicted to reach 9,343 billion RMB in 2020 (Source: Analysys).

Despite the large market size and opportunities, it can be at times overwhelming to understand the e-commerce market. To give our readers more information, we spoke to Jelmer de Jong from AsiaAssist for his views on China’s e-commerce market and how businesses can increase their commercial success.

china b2c ecommerce market size

1. Most people outside of China have only heard of Tmall but there are many other Chinese e-commerce platforms (e.g. VIP.com, JD.com, Mei.com and Suning) that have significant traffic and sales. What would you say the main differences are between these Chinese e-commerce platforms?

The main difference between the major e-commerce platforms in China is that each of these platforms focuses on different target audiences. And each of them has their own strengths with a specific demographic in the Chinese market, such as in the case between JD.com and VIP.com.

At VIP.com, for example, 80% of the shoppers are female and around 50% of the sales come from Tier 3 and Tier 4 cities. JD.com, on the other hand, focuses mainly on selling products in consumer categories such as electronics and home appliances, which fits a target audience that is mostly men who are located in Tier 1 and Tier 2 cities, although JD.com is rapidly expanding its presence now in Tier 3 and 4 cities.

2. Setting up an e-commerce store on Tmall/Tmall Global is by invitation only. How do you help your clients increase their chances of getting accepted/invited by the platform?

There is a misunderstanding that Tmall and Tmall Global is by invitation only. Certainly, Tmall (Global) invites brands to enter their platform. They do this by identifying growing product categories that are not well represented by international brands and then identifying strong international brands to strengthen the product assortment in these categories. However, for brands that do not receive such an invitation, there is still the possibility to enter Tmall (Global) but they need to have a solid market plan.

This should cover both their online and offline plans with details such as target audience, product assortment, pricing strategy and their marketing plans or evidence of brand awareness in the Chinese market. The aim is to convince Tmall (Global) that the brands are of added-value and interest to the platforms’ users.

AsiaAssist helps these brands to develop such market plans through our Think, Build & Operate approach. Our Think phase will identify, among others, the brands’ target audience, customer journey and study their competitors to develop the aforementioned elements to increase the commercial success of a market entry.

3. Once your clients have started selling on Chinese e-commerce platforms, how do you help them stand out in the crowded market?

We know how to market our brands effectively as we have a very good understanding of their target audience and customer journey. We are active on the right touch points in the customer journey with the right message that is appealing to the brands’ target audience.

Also, China is a constantly changing market with constant shifts in marketing and sales channels and trends. Therefore, for a new unknown brand in the Chinese market, there are enough opportunities to ride on these new trends and channels to stand out. An example of this is the social media app Douyin, which grew within 500 days to +100 million users. This offers many opportunities for a new brand in the Chinese market.

4. It is very interesting that you have operations in both China and the Netherlands. Have you seen a growing demand from companies in the Netherlands (or Europe in general) to sell into China?

There is a strong demand from China for European products. However, this does not mean that every brand from the Netherlands or Europe can be successful in China.

And by successful, we mean to make a profit. Many western brands have noticed the growing demand for western products in the Chinese market and the scale China offers by its exploding e-commerce market. However, to be successful and profitable in the Chinese market, it is key for a brand to have a solid understanding of their competitors and target audience.

5. Based on your experience, what are the few characteristics of businesses that do well in China?

Brands that outperform the competition in the Chinese market have a very crisp understanding of who their consumers in China are and which marketing and sales channels offer a positive return on their investment in the Chinese market.

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About the Author

editorial-team

www.angrymoo.com

Fresh thinking with a global outlook is vital for any business. Our mission is to promote a long-term and global mindset in businesses of any size.

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