The rapid development of smartphones increases the popularity of mobile shopping apps which has helped further drive the growth of China Ecommerce. China Ecommerce apps have become the most used and easy way for users to access online shopping. Over 80% of Chinese online sales were generated from mobile apps, and this trend is expected to continue in the future. However, challenges lay ahead, as new laws put into effect in early 2019 have increased the administrative burden many of these platforms face.
The China e-commerce market continues to see amazing progress, with more and more competitors entering the market with consistent innovation. Year-on-year, the market penetration of e-commerce apps in China reached 82.6%, an 11.3% increase. The average daily active users dropped by nearly 6.3 million to 209 million.
Chinese E-Commerce Trends: What you
need to Know for 2019?
China has nearly 1 billion people on the Internet and smartphones. Its e-commerce market is expected to amount to about $1.1 trillion this year.
According to data from China Internet Watch, the population of consumers who buy foreign goods online is estimated to exceed 200 million by 2020, and total online sales are predicted reach 1.9 trillion RMB.
Thanks to the biggest number of shoppers in China, the country keeps setting records for global retailing and has become a must-win market for retailers and online businesses alike. To identify opportunities in the market, it’s very important to understand the latest trends.
Millennials and Gen Z account for 85.1% of the online sales in China
The majority of this young generation grew up with the undivided attention of their parents and grandparents. 85.1% of Chinese e-commerce users are aged between 16 and 35 years old. We can clearly see that these two generations are important for businesses.
Since many of them are still studying or only recently graduated most are still unfamiliar with the working life and find themselves searching for ways to gain recognition from their peers or a sense of achievement. These generations have had a huge influence on foreign culture, as compared to previous generations. This foreign exposure has led to a craving for international brands and luxury goods.
Brands have had more success with more engaging and interactive campaigns created specifically to target them. Choosing the right Chinese shopping apps more engaging can be essential to getting your product in front of them.
The Rising Popularity of Social E-Commerce
Nowadays, Chinese consumers have begun to tune out traditional advertisements due to the increasing popularity of a new form of Chinese social e-commerce.
Social e-commerce combine e-commerce and social media such as Wechat Stores, Weibo Window, Pinduoduo, and Xiaohongshu. On social e-commerce, people can ask for comments and reviews of products in their personal networks and receive recommendations from people they know about and trust.
Social commerce has been found to be a major driver of impulse purchases. Over 54% of Chinese people spent more on online shopping and 80% stated that social recommendations drove impulse purchases.
The New Chinese E-Commerce Law of 2019
This new Chinese e-commerce law is a big reform from the Chinese government to clean up the country’s reputation and give e-commerce platforms and shopping apps the responsibility of policing their own sites
This new law forces Daigou merchants to register and pay taxes on goods that they bring back to China or face massive fines.
Pinduoduo: Ecommerce Giant You’ve Never Heard Of
Pinduoduo also went through their IPO in July raising $1.63 billion. Here are some of the highlights:
- Pinduoduo went above 100 billion RMB per year of merchandise sold on the platform 2 years after its launch
- Monthly Active Users (MAU’s) reached 195 million in June 2018
- Pinduoduo users are predominantly female, living in Tier 3+ cities
- The average order on Pinduoduo is 6 USD, against 30 USD on Taobao/Tmall and 60 USD on JD.com
With its 366 million monthly active users, Pinduoduo is a serious rival of Alibaba and JD.com. Last month, Pinduoduo reported that second-quarter revenue had more than doubled from a year earlier. Its $40 billion market value places it among China’s five most valuable ecommerce companies.
The company’s success is due to its rock-bottom bargains, discounts based on group buys that prod users to recruit friends and a design that relies more on browsing than search.
Pinduoduo’s business model
Pinduoduo’s business model is very creative and has arrived as China has embraced the mobile digital world. China’s e-commerce market, also the world’s largest, is expected to amount to about $1.1 trillion this year.
Pinduoduo owes a part of its success primarily from collecting fees for marketing services such as pay-for-search keywords and ad placements. The rest comes from vendor commissions. Teams form on WeChat to shop Pinduoduo’s apps, and payment is made on WeChat’s mobile payment feature.
Pick the product that you want to get a
Another thing that makes Pinduoduo special, it’s the fact that they create viral incentives by asking friends to help “bargain” for a cheaper price.
You can share certain products with friends, and each time a friend volunteer help you to “bargain”, the price decreases a bit. You can get the product for free.
Customer service adjust to eac user
Pinduoduo makes great use of Customer Service. The messages are personalized and can be sent 48 hours after the user followed the account or interacted with it.
Pinduoduo uses the messages to continually recommend new products to the user. This simplifies the customer’s journey, so they can now have access to advanced payment methods like WeChat Pay and Alipay, making the entire shopping process incredibly smooth.
Automatic payment: WeChat Pay and Alipay
The last thing we’d like to mention about Pinduoduo is the “automatic WeChat payments”. The first time you pay on Pinduoduo, it enables “password-less payments” by default. After this first purchase, you won’t have to enter your password anymore and will be able to do one-click payments.
Want to sell on China’s
Are you interested in the enormous opportunities in the China e-commerce market? Do you want to know which Chinese eCommerce app is right for your brand?
Want a first consultation about Ecommerce Marketing in China? Why not start by having some guidance from the experts first!
Gentlemen Marketing Agency is a Digital Marketing Agency dedicated to providing digital solutions to local and international businesses around the world! Our team of experts will take a deep dive into your business and determine the optimal channels and strategies for promoting your business in China, so be sure to contact us!