Overseas brands are selling on Chinese e-commerce platforms
A whooping number of (14,500) overseas brands are selling on Chinese e-commerce platforms and more than half of these brands have their presence on Tmall China for the first time. Two major reasons for this extravagant emergence of foreign brands on China’s e-commerce platforms as reported by Alibaba Group Holding Ltd and CBN China are; growing demand of foreign products among Chinese consumers and relaxed government restrictions on imported goods bought online.
Tmall is most popular online marketplace for overseas brands
Tmall global is an online marketplace in China operated by Alibaba, this e-commerce platform is reported to have 3700 product categories from overseas brands and retailers belonging to 63 countries. In order to make foreign goods more affordable for China’s middle class, Chinese government slacken the import tax on goods purchased in small quantities from foreign website. The main reason of Chinese consumers drawn to buy foreign products is the lack of good quality in Chinese products. Among all other industries entered in Chinese e-commerce market, cosmetics industry has received the most advantage due to lower tax rate on online orders.
Other than Tmall global, Alibaba ‘s competitive portals JD.com and Amazon China have also gained benefits from invasion of overseas brands on Chinese e-commerce platform. Chinese consumers are huge fans of products, mainly from five very well-known countries that are Japan, United States of America, South Korea, Australia and Germany. Products from these countries hold the biggest share on Tmall global. However, during 2016, there was a remarkable increase in sales of European brand categories.
Most wanted product categories in China on Chinese e-commerce platform
Chinese consumers prefer beauty products, baby diapers, apparel and skincare products from Japan and South Korea. Among product categories from the United States of America, Chinese consumers prefer nutritional supplements and baby milk formula. Germany and Australia are famous for kitchenware, nutritional food items, and coffee.
Exceptional increase in online sales of alcoholic beverages was also noted during 2016. Especially beers made in U.S and wines from France and Italy were among the best sellers category on Tmall.
Profile of Chinese customers making online purchases on Tmall Global
Fans of overseas brands making purchases on Tmall Global doubled in 2016 and according to data this customer group belongs to young professionals. Approximately 80% of these online shoppers belong to 20 to 25 years of age group that live in small or mid sized cities of China, where access to foreign products is only available with the help of e-commerce. Most of young male consumers prefer to buy sport shoes from foreign brands like Nike, addidas, whereas,, sport shoes from sketchers are more popular among female consumers.
How do overseas brands access China’s e-commerce platforms?
Chinese e-commerce has become incredibly attractive for overseas brands and for retailers from all around the world. However, entrance in Chinese e-commerce is slightly more trickier due to cultural barriers, language difference and strict e-commerce platforms policies.
To enter Chinese e-commerce platform there are two vital solutions. Firstly, overseas brands need to have a very strong Branding on the e-commerce platforms and secondly, they need to have clever digital marketing in place with a budget.
Branding on Chinese e-commerce platform
Overseas companies need to build e-reputation in order to gain popularity among customers. The marketing campaign must address the need of customers. It is highly important for International companies to understand the local culture and demands before it translates its offerings.
Therefore, when approaching China’s E-commerce, it is advisable to partner with local digital agency as it is equipped with right set of skills to find a “sweet spot” between the International brand value and preference of Chinese consumers.
How can overseas companies have presence on Chinese e-commerce platform?
Overseas companies need to have online store on one or a few of the Chinese e-commerce platforms, this depends on the products it’s promoting. Here is an overview of e-commerce platforms in China, where local digital marketing company can help overseas companies to enter Chinese e-commerce sphere.
TMALL holds the biggest market share in e-commerce market of China at 57%. It mainly focuses on premium brands. This characteristic makes TMALL most expensive e-commerce marketplace in China. It provides an opportunity to International brands to open exclusive online stores and directly sell products to Chinese consumers without being physically present in China.
TMALL has invitation-only policy where only qualified international brands can either be invited to join or can apply through a local digital marketing agency. For more information on how to sell International products through TMALL, please contact digital marketing agency.
JD.com is China’s largest online direct sales company. It relatively has less market share than TMALL.com. International companies can open individual online stores on JD.com. JD’s cross-border service enables suppliers to sell directly to Chinese consumers without a local presence.JD.com is less expensive than TMALL.com. JD.com has a zero tolerance policy for counterfeit products.
Cross-border on Chinese e-commerce
There are several cross- border websites that cater overseas brands. Cross-border B2C e-commerce refers to a form of B2C (business to consumer) online purchasing where consumers can purchase foreign goods online via e-commerce platforms and marketplaces, such as kjt.com, Tmall Global, and others, who are set up to operate within special Free Trade Zones (FTZs) in China. Chinese consumers prefer buying imported products from Haitao websites. To learn about which Haitao is suitable for you brand please contact local marketing agency catering International brands.
Taobao is owned by Alibaba Group. It offers largest C2C e-commerce marketplace in China. Taobao allows registered or non-registered businesses to sell directly to consumers. Establishing a store on Taobao is virtually free but the online marketplace is ruled by small sole sellers who compete fiercely on price and honesty and authenticity is an unwritten rule of their trade ethics. Sellers with low budget and low quality products opt for this platform.
Online store on WeChat app
WeChat is engrained in lifestyles of Chinese consumers. It is all-in-one-app which integrates social e-commerce seamlessly. Wechat store gives numerous possibilities to International brands to reach Chinese consumers effectively. Possibilities ranges from Branding to campaigning and easy payment methods.
Overseas brands on Wechat stores
WeChat Service Account is considered the most suitable for business and organisation that aspires to access advanced WeChat Official Account. Service accounts allow more APIs (Minisite) and companies are can open their own store. The online store can be used to manage products, take orders, display products, and manage customer complaints. For more information on how to manage Wechat store, international companies are advised to partner with expert Digital Marketing Agency, willing to apply for an Official WeChat Account on behalf of the international company.
Overseas brands interested in Chinese E-commerce market, and want to learn how they can target Chinese consumers digitally? You are welcome to write us and learn about your brand’s prospects in Chinese E-commerce market. Our Digital Marketing agency provides, international brands with tools that are optimal to unlock this enormous market to earn their full potential. If you are interested in exploring Chinese Digital E-Commerce platforms, reach out to us for a customised advice.