Tuesday 17 June, 2014

Ni Hao! – The Ecommerce Boom in China

If you run an ecommerce business, you might want to start thinking about marketing your services to the Chinese. Why? Because China is experiencing an ecommerce get-rich-rush which is only set to rise in the coming years. The consulting firm McKinsey predicts that Chinese ecommerce will increases five-fold by 2016, greatly outpacing that of the US and Europe.

The Middle Kingdom Goes Digital

There are a number of reasons for the boom. For one thing, China is in the process of transforming itself from a manufacturing-based to a full-fledged digital economy. The economy is growing and with increased availability of the Internet and low prices to be found there, digital enterprise is booming. Asia is leading the world in the growth of ecommerce, and China is the largest country in the region.

According to surveys, Chinese people love buying online. Once a Chinese consumer makes their first purchase online, they’re hooked. They’re much more likely to buy again than their US and European counterparts. Considering the sheer number of people in the country, this means a significant customer base for any ecommerce business.

By 2015, China’s retail sector will be worth more than that of the United States. A report by Boston Consulting Group says that online retail is growing in China by 200 million new shoppers a year. In three years, it’ll be over 700 million users, which is more than the US and Japan combined.

Selling to China

What this means is that your ecommerce business needs to look beyond your local shores. It needs to be internationalized. China is not the only country where ecommerce is booming. India and Russia are also highly populated countries where shopping is going online.

A good place to start is by offering your goods and services in Chinese. Hire a Chinese VA or interpreter to help you make the switch. Although English is the world’s lingua franca, people overwhelmingly prefer to shop in their native language to avoid any mistakes or inaccuracies.

It takes a different approach to market to the Chinese. First of all, there’s no Google in China. The king of all search engines is banned there. China has its own search engines like Baidu, which has its own ad networks, SEO and everything else (Baidu is also in Chinese only).

However, the Chinese are much bigger users of social media than search engines. The average Chinese person spends around an hour longer than their American counterparts online and what they’re doing is mostly social.

There’s no Facebook in China, but it has its own social media sites like Sina and Tencent. Microblogging is huge and so is chatting. China’s instant messaging platform, called QQ, has well over 500 million users, which is more than all of the citizens of the European Union.

Not Made in China

As a major manufacturing country, wouldn’t the Chinese rather buy from their own home where prices are lower? Studies show that this isn’t the case. The Chinese are overly concerned with product safety and actually prefer to buy international over local brands. It seems the label ‘Made in China’ has the same negative connotations there as it does here.

Selling to China means moving out of your comfort zone – way out of it. But it’s a risk that could carry with it huge rewards. As ecommerce continues to boom in China, it’s something to start thinking about.

Bob Steele

Bob Steele is an entrepreneur, software developer, marketer, and author living in the Denver metropolitan area. He’s an avid outdoorsman who loves skiing, hiking, fishing, boating, and just plain having fun. His interests include games, space, technology, physics, cooking (well eating actually), economics, business, internationalism, and team sports. With over thirty years of professional consulting experience, Bob has been exposed to many diverse business models and has gained a sensible approach to life. Bob’s company, WaveCentric is focused on commerce, marketing, and entertainment related products.

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