How to Successfully Position Your Products on Chinese E-commerce Sites
China is the world’s largest e-commerce market. Once it accounted for less than 1% of the global e-commerce market. Now it claims more than 40% of the global market share. In fact, in the last five years, China’s e-commerce market has grown dramatically. Aided by fast internet, technology, and various e-commerce platforms that support online payment solutions. As the world’s most populated nation it is leading the e-commerce wave. Particularly by bringing online 782 million users in 2020, more than double the size of the US population.
Consumers in China are increasingly moving from offline to online store transactions is a trend for you to be aware of. Then you can create a plan to put your brand in front of millions of Chinese online shoppers.
This article will cover the most popular e-commerce platforms in China that your brand should have a presence in. And offer tips on how to leverage these platforms effectively to generate the most impact for your brand. First, we’ll briefly summarize why the Chinese e-commerce market continues to grow at a rate faster than its competition. This will provide context that highlights why foreign brands should invest in this market.
Why Should I Invest in this Market?
A Nation Crazy About Tech
Mobile devices perform over 90% of e-commerce sales in China! This is in stark contrast to the US, where mobile e-commerce sales accrue only 43%. During the last decade, Chinese users quickly adopted the use of smartphones and payment apps in their daily lives. As a result, 932 million users go online using their mobile phones. This represents a staggering 99.2% of the country’s total internet users. But these mobile users do not only dwell in Tier 1 cities. Cities such as Shanghai, Beijing, Guangzhou, and Shenzhen. They are spread out in smaller and less wealthy cities. In contrast, these emerging middle-income buyers go online to make up for the limited number of retail stores near them. Users that live in these smaller cities are an important target audience for brands.
Innovations in digital payment applications, notably Alipay and WeChat, made online shopping easier and faster than ever before. Chinese apps streamline purchases and this has led to Chinese E-commerce growth. In response to the rise in online shopping, companies have made huge investments to ensure packages arrive quickly. Online delivery companies take an average of 48 hours to deliver a package across the country.
Adjusting to the Pandemic
Consumers changed their buying habits in response to the COVID-19 pandemic. For example, the grocery Chinese E-commerce industry grew a lot post-COVID. More users prefer online shopping after a period of lockdowns, isolation, and public-health issues. This led to people spending more time online and on e-commerce in china. Moreover, recent studies have found a connection between COVID- 19 and the increase in online purchases.
Special Shopping Holidays
In China, the market offers incentives more and more for people to shop online. You can see this in the number of holidays spread throughout the year, known as days of celebration and shopping! ‘Singles Day’ on 11.11 is China’s busiest shopping day of the year. And thus, shoppers eagerly await the sales as brands offer huge discounts on their products. Singles Day sales have passed Western shopping holidays, such as Black Friday and Cyber Monday. Shopping holidays in China are the most important days for brands. In this case, with sales events generating a huge portion of their revenue. Other noteworthy shopping holidays in China include 12.12, Chinese New Year, and 6.18.
Marketing Your Product
This section describes Chinese E-commerce platforms that are commonly used in China. These cover both business to consumer (B2C) and business to business (B2B) marketing. We describe each platform in great detail, and discuss general guidelines for strategies used on these platforms.
There are many widely-used Chinese E-commerce platforms, some of which are more familiar than others. Including Taobao, Tmall, JD, Pinduoduo, and Little Red Book. This article will cover the biggest B2C platforms, Tmall and JD.
Note: Before you begin entry into the Chinese e-commerce market, it is important to know the large number of legal requirements to meet. Such as obtaining an Internet Content Provider (ICP) and business license to set up your Wholly Foreign Owned Entity (WFOE). To streamline this process, contact Gab China and we can help you sort out the incorporation process in China. We will ensure that your company falls in compliance with the latest regulations.
B2C E-commerce: Tmall
Tmall is a B2C online app founded by Alibaba, and is a subsidiary of Taobao, Alibaba’s C2C e- comm platform. Shoppers perceive Tmall as a more reliable and trusted shopping site compared to Taobao. Before, Taobao was known for selling counterfeit products. To solve this issue, Tmall allows users to buy name brand products directly from the brands’ flagship stores. This allows foreign brands to sell their products through the platform.
In 2021, Tmall took 50.8% of all B2C platform market share. They overtook platforms such as JD and Pinduoduo, which had 15.9% and 13% of the market share respectively. With hundreds of millions of users buying products on Tmall, this platform can promote your brand and generate huge sales! Therefore, here are tips you should know if you want to do business on Tmall.
Note: To start selling your products on Tmall, you must first open a Tmall merchant account. This can be a lengthy process for foreign businesses, especially if you are not based in mainland China. Selling products on Tmall can also be quite expensive due to its high fees. Gab China can help you register your company in China. Let us handle the paperwork, and we can advise you on the best course of action for your brand. Book your free consultation with us now.
Tmall B2B Marketing Tips
Opening a Tmall store. Brands can open three types of stores on Tmall. These include:
- Flagship store. The merchant owns the brand or has exclusive license from the brand owner.
- Authorized store. The brand owner gives the merchant authorization documents to open a shop on Tmall.
- Specialty store. A merchant that sells multiple different brands that belong in the same product category.
Once you open your Tmall, the next step is how you will drive traffic and convert leads to sales. While you may already have a brand name and logo, you need to localize your brand to the Chinese market. Localizing your brand name and logo is important to make them easier to remember for non-native English speaking customers. And this is especially important if you are a lesser-known brand. Contact Gab China for help on brand localization.
Advertising your brand. Consider ways in which you will advertise your brand. On Tmall, you can pay to display your advertisements in the form of a banner ad on Tmall’s homepage.
Key Opinion Leaders
Another way you can advertise your brand is to work with a Key Opinion Leader (KOL). Especially by using the live-streaming feature found in all major Chinese e-comm apps. Live- streaming is one of the most popular forms of video broadcasting, and became even more popular during the pandemic. In 2020, China had 617 million users livestreaming on e-commerce platforms, accounting for 62.4% of its total online users! On these platforms, KOLs broadcast themselves while marketing and reviewing an array of products to their audience. KOLs have proven to be an effective asset in generating sales. In fact, 66.2% of users place orders after watching live-streams on e-commerce platforms. This shows that KOLs are extremely influential. Indeed, they influence buying behaviors of netizens living in both higher and lower tier cities across China.
B2C E-commerce: JD
After Tmall, JD.com is the next largest B2C e-commerce platform in China. Similarly, JD provides a platform for brands to directly sell their products to customers. But is known for selling electronic products. In 2021, JD saw a total of 552.2 million active accounts! Foreign brands should consider selling their products through this platform. However, it is important to note that JD.com only permits national brands and brands registered in China to sell products. To reach the core consumer, you should contact an agency, such as Gab China, to register your company in China. Otherwise, foreign businesses can access this market through JD Worldwide, JD’s sister site.
You can use the same advertising tips from Tmall on JD. In addition, JD allows you to run ads on the home page. So, create banner ads that are visually eye-catching and memorable.
B2B E-commerce: WeChat
Next we cover the most effective way you can conduct B2B marketing in China using the most widely used app. WeChat is a must-use app for companies who want to do business in China. In fact it plays an integral role in how businesses and people function on a daily basis. Moreover, WeChat offers a full ecosystem of features that companies leverage to raise brand awareness and interact with their customers. Here are some basic, but important, tips you should consider when starting your B2B marketing journey on WeChat.
You are responsible for giving regular updates to your current followers. And new followers interested in finding out more about your brand. That is why it is important to give potential clients a positive first impression of your brand. So a professional image is important for sharing articles.
B2B Marketing Tips
First, make titles concise, clear, and arouse the reader’s curiosity! Globally, attention spans are getting shorter. So it is crucial to make your titles interesting enough that readers click on your article. Next, ensure that you format your articles in a professional and visually pleasing layout. Finally, write the articles presenting information so that they are easy to read and understand. Include both English and Chinese translations! Complement your written content with eye-catching and relevant visuals.
Ensure that your followers find the article through a wide variety of sources. For example, include relevant keywords in your articles to increase your Search Engine Optimization (SEO). That way, users who search keywords, using WeChat’s search engine, may come across your article on their results page. Using your account’s QR code is another way to share your articles widely. Because every WeChat account has a unique QR code that, when scanned, directs users to the account page to follow. Make sure to include Call to Actions (CTA) to compel readers to scan your QR code.
Create a mini-program. Think of mini-programs as sub-apps that user access without leaving WeChat. Creating a mini-program is beneficial to businesses and shoppers interested in your brand. This is more convenient and less time consuming than designing an independent app. You can design your program to include a variety of features. For example, customers that enter your mini-program may gain access to exclusive updates, discounts, and loyalty programs.
Build strong relationships. Once you begin attracting clients, you must put in equal effort to keep their interest. Do this by establishing and maintaining long-term relationships with your customers. Make sure that your WeChat official account is welcoming and easy to navigate. For example, greet customers with a warm and friendly welcome message upon viewing your page. Ensure that your account’s menu tab has all the essential columns. Such as an About Us, Products/Services, and Contact Us tab. Ideally, include both English and Chinese translations! Finally, gather and build your community of followers by creating a WeChat group. Those interested in your brand can join your group and initiate discussion. It also enables you to directly interact with customers’ queries immediately!
The Chinese e-commerce market is an exciting and rewarding industry to brands from all over the world. Whether you are a small or large company, you have many opportunities to expand your brand further into untapped audiences. There are many variables to consider and overcome to succeed on platforms such as Tmall, JD, and WeChat. This requires extensive research and knowledge of the Chinese market.