Over the years, the Chinese E-commerce market knew a lot of transformation that offers tremendous opportunities. Three important facts are favoring this transformation: the rise of upper-middle-class, as the drivers of consumption growth; a new generation of freer-spending, sophisticated consumers; and the increasingly powerful role of internet.

Market places tmall Jd Kaola, Red book, VIP, Taobao Sunning, how to sell inside?

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China E-Commerce Overview

 

E-commerce sales in China are on way to surpass expectations as they already reached $1.53 trillion in 2018. Last year, e-commerce sales outpaced estimates by $44.41 billion, driven largely by sales from leader Alibaba’s Taobao and Tmall. Those two will still have a total of 58.2% this year, but Alibaba’s share is shrinking as the market diversifies with the emergence of retailers and newcomer Pinduoduo’s recent success.

From 2015 to 2018, Alibaba’s share of e-commerce sales in China fell from 77.6% to 53.5%. Alibaba’s e-commerce sales are now growing slower than the overall e-commerce growth rate 34.3% with Alibaba’s sales forecast to increase just 22.8%. Consumption among upper-middle-class is still growing so fast, over 17% per year and, by 2020, will account for $1.5 trillion in urban China. That compares with a 5% growth rate among emerging-middle-class and middle-class consumers.

Households will continue to make up a market because they will enter the lower rungs of the middle class over the next five years, these segments will still account for roughly half of the urban households. The emerging middle class and middle class will remain the biggest consumers in many categories, particularly such fast-moving consumer goods as personal-care products and detergents.

E-Commerce in China: Mobile eCommerce, Popular Mobile Platforms, and Social Media

 Actually, online wallets are the top payment method, nearly 33% of Chinese shoppers use the technology to complete transactions. Roughly half of all China’s eCommerce sales are made on mobile devices. There are dozens of mobile eCommerce platforms, but in 2017 Taobao had the most monthly active users at 253.2 million.  Other platforms like Meituan, JingDong, WeiPin, Tmall, eLeMe, Baidu NuoMi, and DianPing all play an active role in the market, but none are nearly as popular as Taobao in terms of active monthly users.

Understanding how to utilize the advantages of social media can raise your company or product’s profile and accelerate your company’s ability to sell online.  The three biggest social media players are WeChat, microblog Weibo, and social network QQ Zone.  WeChat allows retailers to feature online stores and has a convenient third-party payment function. 

It also features push messages to introduce new product lines or deliver promotions. U.S. companies interested in exploring social media avenues and working with these sorts of social media players should seek to work with a local marketing partner to develop a strategy and support execution.

China e-commerce Statistics 2018

 
Chinese consumers moved more of their shopping online in 2018, sending e-retail sales past $1 trillion for the first time in the world’s leading e-commerce market. Retail web sales totaled 7.18 trillion yuan ($1.149 trillion) in 2018, an increase of 35% from 5.43 billion yuan ($869 billion) in 2017, according to China’s Ministry of Commerce.
E-commerce growth accelerated past the 30% mark in 2017, after slumping to 26% in 2016 from 33% in 2015. China far outpaces the United States, the second-largest e-retail market in the world, in both sales and growth. While the U.S. Department of Commerce will not release its 2018 estimate of online retail sales until later this month, Internet Retailer estimates U.S. e-commerce growth of about 15% in 2018 to approximately $455 billion.

China’s e-commerce exports rose 14.5 percent year on year to 6.3 trillion yuan (1 trillion U.S. dollars) in 2018, according to a report released by the E-commerce Research Center (ECRC). In the same year, the value of business-to-business (B2B) exports rose 13.3 percent to 5.1 trillion yuan. Online retail sales of e-commerce exports came in at 1.2 trillion yuan, up 21.2 percent year on year. The rapid expansion of cross-border e-commerce has offered opportunities for small and medium-sized enterprises to participate in world trade.

Five key trends driving China’s E-Commerce market

 

 

E-commerce shopping festivals

E-retailers are creating more shopping festivals and themes to increase the consumer’ engagement. For example, over 79% of consumers said they planned to participate in Double 11. Alibaba got 168 billion RMB in sales and 39% growth on Singles’ Day, while another main competitor, JD.com, achieved RMB 127 billion during this same period, with over 50% growth.
Double 11 and some shopping festivals are a key opportunity for local and international brands to leverage the enthusiasm for shopping among Chinese consumers. Chinese consumers are looking to experience, try new things and buy products that may be new to them. These shopping festivals are a perfect opportunity for new brands entering in the Chinese market. 

Consumption upgrade

 With the Rise of disposable income, consumers are more confident in spending their money on a number of categories such as food, cosmetics, and clothing. The demand for fashion is growing much faster than other consumer demands. The middle- to upper-class consumers are now increasing their demand for goods that are not available domestically.
The number of Chinese Online platforms and cross-border shopping sites where international high-end and niche brands are rising in popularity, and also are leading the consumption upgrade movement. The proportion of consumers who had recently made a cross-border e-commerce purchase reached 67% in 2017, compared with only 34% in 2015. Imported goods are liked by Chinese consumers for their good quality, health and safety, and even package design. Thanks to various online platforms, such as Kaola.com, Tmall Global and JD Global, Chinese consumers now can have broad access to products from overseas. 

A new form of retail: online and offline are merging rather than competing

 Since the term “new retail” was used by Jack Ma in 2016, it has been an important topic for manufacturers and retailers alike. This concept involved the integration of online and offline retail elements, including products, services, logistics, big data, marketing, management and so on. Currently, in China, online players are taking the initiative to drive this integration. For example, the largest e-commerce platform in China, Alibaba recently invested $2.9 billion in China’s biggest offline retail group, Sun Art.
Online to Offline (O2O) business model is transforming the retail industry. Both Alibaba and JD.com are also focusing on the millions of other grocery stores in China, as they believe these shops are places where consumers can be targeted to drive further penetration of payment platforms and e-commerce. 

Digital payment

 Alipay and Wechat pay is the most popular online payments in China, and they are already an integral part of e-commerce platforms such as Alibaba and JD.com. Online financial companies like Alibaba’s Ant Financial and JD.com’s Baitiao are becoming very famous among Chinese consumers, especially millennials, due to low fees and convenient user experience. The disposable income and consumer confidence rise, is encouraging them to spend even more online. 

From online platform to media platform

 Social media is the main platform where people come to interact with one another, what’s making it an ideal place to share and comment on products. As the number of mobile users rises, the importance of social media has increased.
The high concentration of mobile e-commerce has accelerated the transition of the advertising ecosystem. Thus social media has become a crucial tool for marketing, especially when they are communicating and engaging with potential consumers.

China e-commerce: Great Chinese Online Marketplaces

 

 

With the development of new technologies, building a beautiful and dynamic website is not a big deal. The important thing that really matters is building a website that is relevant to your target customers. China is a challenging market for foreigns brands and Chinese netizens are difficult to please. They have a unique language, different symbolic colors, and philosophy, they face a different ecosystem and online regulations. This market is just too enormous to be ignored, so it’s important to adopt the best practices to set up your e-commerce design for China that will mean taking a big step for your brand’s success.

 

The principal Chinese E-commerce platforms include Taobao, Tmall and Alibaba.com. Taobao Marketplace is a China’s largest C2C shopping destination,  where merchants are primarily individuals and small businesses. Tmall.com is China’s largest third-party B2C retail platform for local and foreign brands selling to Chinese consumers. Alibaba.com is the world’s largest B2B trading platform for SMEs engaged in the import and export business.

 

Tips: GMA helps brand’s products join China’s most popular e-commerce platform. We provide comprehensive and diversified professional managed e-commerce services from the registration and opening online shops, store decoration design, upload product, daily customer communication operation, and maintenance, and optimization of promotional activities inside and outside the platform.

 

Koala.com

 

 

Kaola.com has grown by establishing a reputation for featuring reliable, genuine products on its site. It maintains quality by setting up purchasing teams in foreign cities such as Tokyo and tries to keep prices down by negotiating directly with manufacturers. In a reliability survey of cross-border e-commerce companies in the first half of 2017 conducted by China’s iiMedia Research, Kaola.com topped the ranking, followed by Amazon.com and Xiaohongshu. It continues to expand aggressively. Last fall, Kaola.com announced plans to spend 500 billion yen ($4.65 billion) over the next three years to buy Japanese products.

Vipshop.com

 

VIPShop focuses on discounts and flash sales. The online retailer partners with over 1,000 brands to bring certain amounts of items at a lower price for consumers. The site mainly covers clothing and electronics. It was one of very few Chinese tech stocks to list in the US this year.

 

Tips: GMA helps a company to integrate the platforms  

 

Taobao.com

 

 

Alibaba-owned Taobao is no unknown to the e-commerce industry. The C2C giant sells almost everything,  from pets to vehicles.  Taobao owes its success as the market leader in this industry by offering free registration for its users. Taobao.com is the most popular online shopping site in China. It is a consumer-to-consumer retail site.

It’s a platform for small businesses and individual entrepreneurs to open online retail stores. It features a variety of items and cheap prices. In fact, the products are usually offered by small business owners, and buyers are very careful buying things, they check several aspects including the shop credit, costumer’s satisfaction rate, and comments before making your final decision.

 

 Tips: GMA helps the brand to  contact and confirm with a platform for commodity entry, E-commerce consulting Design of pages on Taobao Marketing & advertising.

Tmall.com

 

Another Alibaba-owned business, Tmall focuses on B2C services. It’s a virtual mall that plays host to many brands’ main online retailing presence, notably companies like Gucci, Calvin Klein, Burberry and many more. Tmall.com is a business-to-consumer online retail store, a sisiter site of Taobao.com. It provides a platform where many local Chinese and international brands sell quality products to consumers. For more details about our Tmall services click here

 

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 Tmall B2D

 

 

Tmall B2D has implemented a new B2D strategy (Business to developers) to resolve the problem of distribution in China. This solution is considered as the new revolution of distribution in China because major companies like Alibaba have started to find ways to arrange this market.

Tmall B2D manages to connect distributors with the brand directly to avoid any intermediate connections, by gathering all distributors and helping them to connect with the brand. this platform allows significant gains for all participants (the final customer, as the intermediary distributors) and therefore the success of the product and its brand in China.

 

京东网 JD.com

 

Founded in 1998, JD.com is the largest B2C online retailer in China and big competitor to Alibaba. It provides about 400,000 new products including cell phones, home appliances, apparel, wedding events, electronics, books and more. It also has an English version website en.jd.com. It features fast delivering service and guaranteed product quality. The main problem is it does not support instant online customer service and its customer-service phone is hard to get through.

JD Mall offers direct sales of electronics products, general merchandise, books, home appliances, digital communications, apparel, food, and other goods. JD Mall’s cross-border service, JD Worldwide, allows international merchants to sell directly to Chinese consumers without a physical presence in China. The company has the largest fulfillment JD Logistics which provide business partners with supply chain solutions, including warehousing, delivery, and after-sales service. Lear more about our JD.COM services just click here.

 

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Little Red Book

 

Little Red Book, founded in 2013, has 70 million mostly young users. Its app combines social media and e-commerce. Kaola.com, which specializes in imported products, has established a reputation as a reliable online retailer. Miranda Qu, co-founder of Little Red Book, on a visit to Tokyo in mid-January for a business meeting, said “stories” drive the smartphone generation to make purchases. She was speaking to a group of Japanese retailers hoping to sell their products in China on the Little Red Book platform. Young people, Qu said, do not make purchases mainly to possess things. Instead, they enjoy the story behind the things they buy.

 

Little Red Book grew very fast into a forum where users post-shopping tips, including must-have products and stores frequented by local residents in places such as Japan and Thailand. Qu said the platform was not initially meant to be an e-commerce site.
The Little Red Book app displays product photos and videos posted by users as soon as it starts up. Cosmetics, clothes, and bags come with reviews, ratings and user back stories on purchases. People can research products and buy them through the platform.
 
Tips:
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 Gentlemen Marketing Agency

We Build your Store, We Promote your Business and You Make it Thrive. There are many ways to sell online in China. Contact us now to discover which solution fits your business best! We Setup Stores and run smart Digital Marketing Campaigns in China.

 

Gentlemen Marketing Agency is an innovative marketing & E-Commerce Agency in China. Our solutions are designed to help you achieve your business goals in China. We have 6 years’ experience in providing an invaluable online strategy to companies looking to penetrate or develop their activity in the Chinese market. We seek to form long-term partnerships with serious projects.