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Five Tips For Breaking Into the Chinese E-Commerce Market
The Chinese e-commerce market has become a prevalent player for retailers on a global scale. With brands like Chemist Warehouse jumping on the bandwagon, it could be a great time to get ahead of the pack … but how?
Alibaba Group currently represents 80 per cent of the e-commerce market in China, with brands like Tmall, AliExpress, Taobao and Lazada under its belt. This conglomerate is one of the largest retailers in the world, sitting alongside WalMart and Amazon. So, it’s no surprise that many retailers want to cash in on this evergrowing market.
Chemist Warehouse has announced its latest collaboration with Tmall, the Chinese B2C marketplace. The cross-border company, owned by Alibaba Group, is set to diversify Alibaba’s ecosystem with the expansion of Chemist Warehouse in its group.
Chemist Warehouse announced the renewal of its ‘strategic collaboration’ with the Chinese marketplace for another two years. Tmall first announced the collaboration with Chemist Warehouse in 2015 and has become one of the largest cross-border store in the world that sells on the platform.
“Since the previous deal signed two years ago, we have worked in partnership with the company to successfully grow their brand awareness in China. As Chemist Warehouse’s partnership with Alibaba matures, today’s agreement will see the company open additional stores and work with us on a range of new and exciting marketing initiatives,” explained Maggie Zhou, the Managing Director of Alibaba Group in Australia.
Why the Chinese Market is Tough to Break Into
The Chinese market has changed incredibly fast in the last 20 years, and it seems only now that international retailers are cashing in on the market itself. However, there have been popular brands that have floundered within China, and there are several reasons why.
- Chinese shoppers have a higher engagement with local brands
- Chinese consumers rely heavily on reviews
- Forty-nine per cent of Chinese consumers actively seek out luxury international brands
- Chinee consumers have a tough time determining trust with ‘new’ brands
How to Break Into the Chinese Market the Right Way
- Start Small
When large retailers break into the market they often go big or go home, and usually, they end up doing the latter. China is a huge market, with over 1.8 billion consumers. Start out by whetting the audience’s appetite, and launch in Hong Kong or Singapore to start with.
- Understand the Rules and Regulations
The Chinese market, much like any other international sector, has rules and regulations that some retailers don’t consider before entering. Prior to launching into China, your company must first consult the China foreign investment catalogue. This divides the foreign investment projects into three categories: Encouraged, Restricted and Prohibited. There are plenty of advantages and disadvantages with joining this market, so take it seriously before considering the move.
- Remain Flexible
WHat may have worked in the Aussie market may to work in China. Remaining flexible with your ideas, paying attention to what other companies are doing and what your target audience prefers is an easier way to adjust to the market itself. It’s not just the consumers, it’s the policies too. With new rules and regulations entering the industry regularly, it’s imperative that companies remain open-minded with what will and won’t work within the confines fo the industry.
- Don’t Forget Social Media
Social media may be different to Australia, but it’s one of the most important factors to consider when entering the Chinese market. There are 550 million smartphones in China, who have really embraced the idea of online shopping and m-commerce. Apps like Weibo and WeChat stand out amongst consumers as they provide a powerful infrastructure for tapping into specific communities. Brands that enter the Chinese market often also break into these apps as they saturate the market reach and infiltrate their new target audience.
- Think On Your Feet
There’s an important factor in e-commerce in China that many countries overlook, and that’s how fast the Chinese market moves. In 20 years, the e-commerce industry went from fizzle to boom. Rules and regulations change almost on a weekly basis, so it’s imperative that there’s someone in the business who understand how to adapt to changes within the industry.
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