E-commerce in China

The online sector in China is growing rapidly and becoming more professional, thanks in part to extensive government support. You can easily sell products in the Chinese market with an online shop, without having to open a branch in China. This article explains exactly what you need to do to get going.

Starting in China

To start your own online shop in China, you need a branch (in Dutch). Or you can work with a Chinese company in a joint venture. You supply the products and your Chinese partner stocks the products and sells them in China.

Chinese consumers are reluctant to buy products from foreign online shops. You can win their trust by offering your products on a Chinese platform. Selling via a Chinese online marketplace lowers the threshold for  potential customers. For online sales from the Netherlands to China, you do not need a company or office in the country.

Online marketplaces

Listing your products on one of the 10 biggest Chinese marketplaces, such as Taobao, Pinduoduo, JD, Tmall, or Alibaba offers several advantages:

• Consumers are likely to be more familiar and comfortable with local platforms.
• These also provide easy payment methods and a user friendly environment. Alipay and WeChat Pay are Chinese market leaders in online payments.
• You are more likely to gain brand recognition with your own shop on a trusted platform than if you start an independent online shop for the Chinese market.
• Moreover, platforms will provide logistics support for a fee.

However, selling your products on a Chinese platform does have disadvantages. For example, most Chinese marketplaces require the seller to pay import taxes for your customer in China. For this, you need a Chinese customs agent. They will arrange the payment of Chinese import taxes such as import VAT.

New technology

The reach of Chinese e-commerce platforms is enormous, while it is incredibly easy to open a local shop on a platform. As an added benefit, Chinese platforms are continuously investing in new technology, such as blockchain applications, data collection to drive sales, virtual showrooms and digital payments. China is far ahead of the Netherlands in this field and your online shop can benefit from these developments.

Copy and photos

Chinese consumers are very detail-oriented, so put as many photos as possible on your product pages. Avoid simply translating your Dutch copy but write them specifically with a Chinese audience in mind to make sure that your product pages meet the needs and wishes of your Chinese consumers.

Marketing

The marketing strategies used by Chinese online marketplaces are state-of-the-art and highly innovative. Alibaba's marketing machine has global impact, as evidenced by the worldwide spread of ‘Singles Day’. This special day – 11 November – was once invented in China, but consumers and retailers in the Netherlands now celebrate it too. This kind of online shopping event is contributing to the growth of China's e-commerce market.

Smartphones

Smartphones are incredibly popular in China. In fact, no other country is home to more smartphone users than China. More than 500 million Chinese people use their phones to buy products every month, and the mobile e-commerce market (m-commerce) is showing no signs of slowing down. All the more reason for ensuring that your shopping site is fully compatible with mobile devices.

Social media

As the largest social media platform in China, WeChat is the premier communication tool when it comes to m-commerce, for all strata of the Chinese population. WeChat is used by everyone: from local farmers selling their vegetables to a wide audience through their own shop on WeChat to premium brands targeting the higher segment of the market. Thanks to WeChat, you can enter the Chinese market on a limited budget. It is an all-in-one app with huge e-commerce opportunities.

In addition to WeChat, the following channels are also popular in China:

• Tencent QQ (in Chinese): a messaging service with more than 800 million users.
• Qzone (in Chinese): a paid website for blogs, videos, photos, and music.
• Sina Weibo (in Chinese): a messaging platform with microblogs, similar to Twitter and Facebook.
• Xiao Hong Shu (in Chinese); the Chinese answer to Instagram. This is where the young generation searches for new products and brands. Xiao Hong Shu is increasingly used for sales in online shops. 

Video commerce

Chinese people cannot access YouTube and use similar channels like Youku, Tudou, TikTok, or Douyin instead. Douyin is the parent company of TikTok and primarily targets a young audience. Video commerce involves highlighting a brand or product in order to sell more of it. Provide local content for your posts and bring in local celebrities.

Baidu

Popular search engines like Google or Bing are rarely used in China, where Baidu (in Chinese) is the market leader. This search engine focuses mainly on the Chinese market and culture. To gain a foothold in the Chinese market, tailor your online marketing activities to the needs of Baidu users.

Logistics

Before you test the e-commerce waters in China, ask yourself whether you want to deliver locally or from the Netherlands. Delivery from the Netherlands is easier, as you will not have to register a company in China. Do keep Chinese product requirements (in Dutch) and export rules (in Dutch) in mind. How to get started with e-commerce outside the EU.

Local shipping

If you choose to ship locally, you will be closer to the market, enabling faster delivery times and improving your position relative to other competitors. Chinese consumers expect fast delivery times and would even prefer delivery within the hour over same-day delivery. Before you get started, research what your audience expects with regard to delivery times, what competition you will have to deal with, and how you can maximise your findability online.

Be clear

Whatever channel you choose, make sure that your products meet high quality standards and be transparent in your pricing and return policy. You should be clear about who will pay import taxes, for instance, you or the customer. Chinese customs are checking more and more shipments, which means that foreign companies are now more likely to pay taxes, including on small personal packages.

Growing online consumer market

With the rapid growth of the online consumer market and the development of digital solutions, Chinese e-commerce sales keep growing.  Chinese consumers are becoming increasingly internationally minded. The Netherlands, for example, enjoys a good reputation when it comes to baby products, cosmetics, and personal care. Especially for the growing middle class in large cities, foreign luxury and branded products are popular.

Key figures

China has a population of more than 1.4 billion. Of these residents, about half have access to the internet. Of those 600 million, 81% are under 39 years old. Young people in particular like to shop online.

On Statista, you will find all sorts of market figures on e-commerce in China. Research the Chinese market (in Dutch) before entering it. Talk to local people and businesses, get a feel for the country and talk to people who live and work there. They will know best whether your product has a chance of making a mark on the Chinese market. And they will help you discover blind spots or things you will have to adjust in order to win over Chinese consumers. Even small gestures can have a big impact, from more luxurious packaging to a personalised, handwritten card.