While China is the second largest economy in the world, it is home to the biggest e-commerce sector on the planet. To put things in perspective—
the biggest e-commerce day in China, Single’s Day, yielded close to $18 billion in sales in 2016. On the other hand, Cyber Monday in the US on the same year grossed $3.45 billion. That’s how big Chinese e-commerce is.
However, that’s only the tip of the iceberg. Western companies wanting to make a splash in the Chinese e-commerce market should know the following things:
1. Chinese e-commerce is different from Western e-commerce
Western companies should know that the Chinese e-commerce is a lot different. In China, Internet giants like Facebook and Google are blocked. The big e-commerce players in China are JD and TMall and not Amazon.
Moreover, Western firms should know that the mobile payments infrastructure in China is highly developed. Consumers in the country can pay for almost anything using their mobile phones.
2. Chinese e-commerce is spurred by social media
In China, e-commerce has social media as its main growth driver. Chinese consumers buy a product more likely because they’ve seen it talked about by their friends in social media sites like RenRen and WeChat.
3. There are two kinds of consumers in Chinese e-commerce
In China, consumers can be classified into two— the budget-conscious who will go with the cheapest option and the one who will buy the most expensive to boost his/her social status. Chinese consumers don’t have the concept of a middle-tier product which has a reasonable price and of good quality.
But the good news is that more Chinese buyers buy high-end products so that they can show off their success to other people.
Western brands contemplating on selling their products online to the vast Chinese market should keep in mind these three facts to enhance their profits.