China - a trillion-dollar-sized pie?

LinkedIn Twitter Facebook

 

Author: Iain O’Neill, Head of Innovation, wnDirect

China is currently in the forefront of our minds as we countdown to ‘Single’s Day’ which takes place next month. Singles Day, the single consumer’s Valentine’s Day celebrated in China on 11/11, is the world’s biggest online retail event which last year resulted in Chinese consumers spending a whopping $14.3bn, in just one day!

There is absolutely no question that China represents significant opportunities for Western retailers. Not only does it have a colossal population of 1.3 billion, but it is also the world’s largest and fastest growing eCommerce market. Chinese consumers purchased $589.61bn worth of goods online in 2015, a 33.3% increase from a year earlier, according to the National Bureau of Statistics in China. The market is far from mature with online shopping continuing to rise significantly with online spending estimated to reach over one trillion dollars by 2020. As Jack Ma, the Chinese billionaire and co-founder of Chinese eCommerce giant Alibaba put it, ‘in China eCommerce is a way of life’.

 

And it is not just eCommerce that is booming in China…despite Chinese consumers being relatively new to online shopping, and despite the implementation of a new tax on overseas purchases in April this year, Chinese consumers are embracing cross-border eCommerce.

 

According to digital marketing researcher eMarketer, cross-border eCommerce in China will hit $85.76bn this year, up from $57.13bn in 2015 and that by 2020, half of China’s digital shoppers (or more than a quarter of the country’s population of about 1.4 billion) will be buying foreign products online. According to a recent Accenture-Ali Research report, China is expected to drive much of the growth of cross-border eCommerce in coming years.

 

Cross-Border eCommerce in China Singles Day 11.11

 

But why has cross-border shopping become so attractive to Chinese consumers? A number of factors are fueling the cross-border trend. Firstly, product safety incidents and less than stringent government supervision has meant that consumers have developed a lack of trust in domestic brands. This, combined with the fact that they also have a greater exposure to, and knowledge of, foreign products means that they are now going online to seek higher quality and lower priced products from abroad which they deem more trustworthy.

 

Secondly, incomes have risen in China, 70% of consumers are under 35 and the country’s large and growing middle class (which is equal in size to the entire US population and expected to reach 630 million by 2022 according to McKinsey) are hungry for western quality and brand status. Impatient for the latest products and better prices, they can buy directly from foreign retailers and suppliers at the click of a mouse or the swipe of a screen.

 

So taking all of these factors into consideration, along with the impressive statistics and predictions, the significant opportunities which exist for Western retailers in China are crystal clear.

 

Despite these opportunities, there is still a reluctance to enter the region. It is true that China has always been considered a difficult market to enter and there are a number of not insignificant barriers to entry. Yet despite the challenges there are more than enough opportunities to make the effort worthwhile.

 

China has very specific requirements with businesses requiring a Chinese business licence to operate. Coupled with this, the buying habits are very different from what is witnessed elsewhere in the world. It is vital that brands wishing to access the market not only understand this but appreciate the importance. These factors were key when developing our Chinese offering. We quickly realised that we had to develop much more than a delivery service but a mechanism for retailers to operate within this very specific market. In order to do this we decided to develop a partnership with experts in China who could bring this experience and cultural understanding to our logistics services.

 

So, keen for a slice of the trillion dollar sized pie?

 

 

For more information, please consult our China cross-border eCommerce country guide.

LinkedIn Twitter Facebook

5 tips for breaking into online retail in France

5 tips for breaking into online retail in France

France boasts being the 5th largest eCommerce market in the world and with an expectation to exceed €80 billion turnover in 2017, for those looking to enter this thriving online market here are five tips that could help you to break into the French online retail space.
Interview with Melanie Smallwood, International Buying Director at Global Fashion Group

Interview with Melanie Smallwood, International Buying Director at Global Fashion Group

eCommerce Worldwide Cross-Border Summit 2017 - Ahead of our annual event on 24th May, we interview Melanie Smallwood, International Buying Director at Global Fashion Group, to learn from her experience and knowledge in cross-border trading around the world.
Interview with Gregor McMillan, Business Development, China at The Hut Group

Interview with Gregor McMillan, Business Development, China at The Hut Group

eCommerce Worldwide Cross-Border Summit 2017 - Ahead of our annual event on 24th May, we interview Gregor McMillan, Business Development, China at The Hut Group, to learn from his experience and knowledge in cross-border trading into China.
Interview with Michael Truluck, CEO at La Redoute

Interview with Michael Truluck, CEO at La Redoute

eCommerce Worldwide Cross-Border Summit 2017 - Ahead of our annual event on 24th May, we interview Michael Truluck, CEO at La Redoute, to learn from his experience and knowledge in cross-border trading.
The latest view on eCommerce in Germany

The latest view on eCommerce in Germany

There are many benefits to entering the German eCommerce market - it’s the 3rd largest online market in Europe and has a very high internet penetration rate, but what other staistics do you need to know before entering this lucrative country?
How to use colour in cross-border online retail

How to use colour in cross-border online retail

Did you know colour can be an important driver of eCommerce sales? Research suggests 85% of buyers make their purchasing decision based on colour so getting it wrong could be a fundamental disaster for any online business. So what is the right colour to use?
Interview with Richard Longhurst, Co-Founder and Director at Lovehoney

Interview with Richard Longhurst, Co-Founder and Director at Lovehoney

eCommerce Worldwide Cross-Border Summit 2017 - Ahead of our annual event on 24th May, we interview Richard Longhurst, Co-Founder and Director at Lovehoney, to learn from his experience and knowledge in cross-border trading.
Building an eCommerce fraud prevention strategy for Germany

Building an eCommerce fraud prevention strategy for Germany

Being the world’s fifth largest eCommerce market, Germany has become an exceptionally popular destination for online merchants looking to sell their goods and services. However, retailers should still be aware of the high levels of fraud to do with their number one payment method. Therefore, what do you need to know about building an eCommerce fraud prevention strategy for Germany?
Interview with Kai Li, Vice President of International at Revolve

Interview with Kai Li, Vice President of International at Revolve

eCommerce Worldwide Cross-Border Summit 2017 - Ahead of our annual event on 24th May, we interview Kai Li, Vice President of International at Revolve Clothing, to learn from his experience and knowledge in cross-border trading.
How does device usage differ in France, Germany, and the UK?

How does device usage differ in France, Germany, and the UK?

It is well known that the use of smartphones and tablets has grown rapidly but which device dominates the traffic and at what time of day across France, Germany and UK? And how does device usage differ between these Countries?

Contact Us

eCommerce Worldwide
2 Ching Court
49-53 Monmouth St
London
WC2H 9EY

Tel: 0203 696 0980
2016© eCommerce Worldwide

Keep In Touch

powered by Affino

About eCommerce Worldwide

eCommerce Worldwide provides online retailers with all the information, and resources, they need to develop cross-border strategies for entering new markets around the world
Read More