The Chinese e-commerce market is the largest in the world with a volume of 1.94 trillion USD in 2019. That is plus 27% year over year and a quarter of China’s total retail sales volume. As such, China’s e-commerce sector is more than three times the size of the US market, which ranks second. China’s e-commerce revenue is expected to amount to $ 1,556.23 billion in 2024. The share of e-commerce revenue for Fashion in 2020 accounted for 21.4%, electronics for 17.9%, Food and personal care for 17.5%, Hobbies, and toys for 23.3%.
The lockdown in China has changed consumer habits. There has been a surge in the consumption of fresh food purchased online. In the first quarter of 2020, the increase in sales of the online food sector was + 32.7%. The lockdown has also affected the tendency of consumers to give greater importance to the quality of food to improve their well-being. Let’s see how the main trends of e-commerce in 2020.
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1.China Cross-Border e-commerce
Chinese Cross-border eCommerce websites allow consumers to buy products online from merchants located abroad. This kind of online shopping is more and more popular in China. Cross-border online trade reached 164 billion USD in 2020, almost double compared to the previous year.
Moreover, Alibaba’s acquisition of Kaola in September 2019 will lead to a consolidation in this segment. Kaola will become a part of Tmall, stealing market share from the competitor JD.com.
Therefore, it is the right time for your company to make the big leap.
2. E-commerce in China work Better with an Omnichannel strategy
The cross-channel content strategy aims at improving the user experience and creating better relationships with the target audience across all points of contact. Digital media have made it possible to increase the so-called touchpoints, points of contact between company and customer. Touchpoints are referred to as “Moments of Truth”. Reviews for example are an important touchpoint.
Whether you are shopping online or in an actual store, the transition from one point to the other at any point in your consumer journey should be without interruptions. Online and offline are melting together (O2O).
In particular, China is leading in smart sales assistants, virtual reality, and augmented reality.
3. In China 2021 – Lower-tier Chinese cities matter for e-commerce groups
There is a new trend of selling to Chinese lower tier cities, where the living costs are lower and consumers have more money to spend for shopping.
In China, there is a huge unexplored market of third and fourth tier cities and of the rural areas where low-income families live. Here people are increasingly digitally connected and eager to shop.
Pinduoduo is the perfect e-commerce platform for those who want to conquer this slice of the Chinese market. A strategic choice both in the short and long term, which gathers a target with ample room for growth.
4. China Koc marketing continues its growth in 2021
It seems that a new type of Chinese influencer, the Key Opinion Consumer, is gaining momentum in China. KOCs are consumers like everyone else. They have few hundred followers and are almost entirely involved in product reviews.
They are therefore characters with whom it is easy to identify and who inspire a lot of trust in other users.
For this reason, some Chinese brands have already made them their ambassadors.
The social Little Red Book (Xiaohongshu), thanks to its algorithm, seems to be the most suitable to reward these small accounts. In fact, it often displays them at the top of the feed and links to them through hashtags.
5. Live streaming & short videos
Together with live streaming, short videos and short video apps are conquering the Chinese market. More than 300 million Chinese are using short video apps.
Higher Tier areas with middle and higher-income households and younger audience (under 35 years old) are more inclined to use this medium.
Behind the success of live streaming in China there are some specific characteristics. First of all, the increase in this type of content is part of the trend of moving from textual content to video content. These formats are more engaging and interesting and keep the user glued to the screen.
Another key element in the success of live streams is FOMO (Fear Of Missing Out). Users like to feel part of the conversation and contribute with their thoughts. Live streaming increases the feeling of “virtual” contact with the host. Especially for the ability to send messages and receive live replies. Receiving live feedback on a product you want to buy has much more impact than simply replying via message later on.
6. Pinduoduo & Group buying
This trend is famous only in China. Chinese consumers value the significantly reduced prices, particularly lower tier consumers take advantage of the group-buying model.
The group buying function is the one that most characterizes Pinduoduo.
Each product sold on Pinduoduo has two prices. One is the official price, the other the discounted price for group purchases. In order to access the second, you must find at least one friend who wishes to join the purchase. For each person who is added to the purchase, the price is further reduced. Users are, therefore, motivated to share their purchase order with their circle of contacts on social networks.
7. Social commerce is Key in 2021
This hot new trend reached a volume of more than 300 billion USD in 2019. The increased use of mobile devices and social media created social shopping also known as social e-commerce.
Retail social commerce sales in China grew to $242.41 billion (RMB1.675 trillion) in 2020, accounting for 11.6% of total retail ecommerce sales in China. A majority of buyers in China are shopping via their mobile devices.
Social commerce is a mix between a social media and an e-commerce platform. While in the traditional e-commerce platforms, the user enters when he is interested in a product, in social commerce the user enters even also for diversion.
Want to sell your products to China through e-commerce platforms?
Contact Gma & read our online market place guide for a better understanding of the Chinese ecommerce landscape.
E-commerce China is a digital marketing agency that is an expert in helping foreign companies to establish or strengthen their position in China. We can help your brand increase sales in China, thanks to our services like:
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- Social Media
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- E-commerce and cross-border e-commerce