Selling to Chinese consumers: What you need to know.
If you haven’t expanded into the Chinese market yet, you may be missing out on one of the world’s largest e-commerce economies. (Especially since the U.S. is already one of the top three regions where Chinese buyers love to shop overseas.)
Just take a look at the Chinese ecommerce market in numbers:
1,420,062,022 – Population
57.7% – Internet penetration
533.32 million – Population online shopping
15% – Population shopping online from abroad (forecasted to reach 25% by 2020*)
But it’s also a different market than the U.S. Before you dip your toe in the Chinese market, you’ll want to understand the big role Alibaba plays in your international expansion, and Chinese consumers’ buying behaviors.
Alibaba: the most dominant marketplace in China.
80% of the Chinese ecommerce market is controlled by the giant Alibaba, which means selling on Alibaba will be key. In fact, Alibaba’s sales are higher than those of eBay and Amazon combined. Alibaba comprises several primary divisions, including Taobao and Tmall. Taobao is for private persons and small businesses. It’s a consumer-to-consumer business model, whereas Tmall is business-to-consumer with payments facilitated by Alipay (the Chinese equivalent of PayPal).
Cultural differences and buying behavior.
“Keeping face” is one of the most important concepts to understand about your Chinese customers. Keeping face has a lot to do with social status in Chinese local culture, and how that translates into your online selling strategy comes down to the product brands you sell. Chinese consumers like to buy products from brands that have a history, heritage, and a strong position, such as Chanel, because it can elevate their social status. And although generally speaking, Chinese consumers are price-conscious, they’re willing to pay extra for a brand name that would help them keep face. In fact, according to research carried out by IDEO consultancy, a large number of young migrant workers who earn less than 5,000 yuan (USD 830) per month will spend a month’s wages on an Apple iPhone.
They also love buying on mobile. Over half of China’s Internet users access the web via their mobile devices, and 69% of Chinese buyers have made a purchase via their smartphone (in comparison with 46% of U.S. buyers). While that doesn’t mean your desktop site is obsolete, it does make a strong case for making your website mobile-first.
Last but not least is how they get over the checkout hump: Since they’re mistrustful when it comes to online payments made on various websites, they prefer trusted third-party systems.
Those are just some nuances of the Chinese consumer. If you’re curious in learning more, download our comprehensive International Selling Guide for free. It also covers cultural buying behaviors in Germany, U.K., France, and Italy.
Six steps to help make your website relevant.
Now that you’ve gotten into the shopping hearts and minds of Chinese consumers, follow these six steps to tailor your website to gain their trust.
Host your website in China.
Optimize for mobile.
Translate it into simplified Chinese.
Offer payment methods typical to the local market.
Offer customer support for 16 hours a day via phone, email and live chat.
Ensure returns are managed locally.
China becoming the next global consumption superpower is closer to reality than ever and entering the Chinese market will open your business to an incredibly high number of potential customers. As long as you follow some traditional rules to gain their trust, you’re all set to make a profit on the Chinese market.
Ready for more? Explore other critical topics, such as international shipping, in some of the world's largest markets like China and Germany, with a free download of the International Selling Guide.