Website behaviours in China

This second article on China online is an introduction to website behaviour in China.

The first article about online market trends in China is here, while the next one will focus on social media.

China presents a massive opportunity for UK businesses; but at the same time presents many challenges. Business is done differently and online behaviours are also different....

E-commerce in China

Currently 250m of the population shop online. This is less than 50% of active internet users.

There is less trust for retailer websites and most consumers prefer using a third party platform (such as Amazon although it has very low market share in China).

Popular  websites include:

TMall - this is the largest website (over 50% market share) and due to the high set up costs is only for more established brands. Businesses need to be registered in China. TMall stock a lot of well known fashion brands including M&S, Asos and Burberry.

Alternatively, if you do not have a local Chinese office, you can sell on TMall Global. You can ship from the UK but a deposit, annual fee and commission are still payable.

Taobao is the equivalent to Ebay. No deposit is required to gain listings and so can be a cheaper entry to market.

VIP.com, Jumei, jd.com, and yhd.com are other third party platforms.

Amazon is present in China. Although this provides the simplest way to list brands and test the market in China, their market share is low at around 2%.

The most important day in the e-commerce calendar is Singles Day on 11th November. It started as a day for giving gift to single people but it has grown into much more than that.

Practicalities

Given the high entry costs, it may be simpler and more cost effective to test the market by having your own Chinese focused website, hosted in the UK.

The firewall used to make this option impractical, but speeds have improved and this is now a viable option. You will need to check if your speeds are ok. If not, hosting in Hong Kong can be an alternative option.

You won't be able to register a .cn domain name unless you have a business registered in China so a .com will have to suffice.

Aliplay can be a good payment gateway. The Chinese currency is not traded on foreign markets and so they will collect funds for you and pay you periodically. They also take care of import duties.

Cash on delivery is normal in China as not everyone has credit cards.

There is no Google Analytics in China but they do have an equally good service called Baidu Tonji.

Website usage

Users in China interact with websites differently to the West.

The average age of internet usage in China is currently 25 (much younger than the average age of 42 in the USA).

Eye tracking studies show that users in China will spend longer on each page and like to see detailed information. They need to be reassured, they want to know who you are, what you do and the benefits of your products on each and every page. Minimalism should be avoided.

Users are willing to scroll and scroll down pages; provided the information is useful.

Consumers are sceptical and suspicious. Consumer advocacy is key and goes a very long way in building your brand. Product reviews are taken very seriously.

After-care and trust are very important in China and details of your customer service needs to be prominent. Websites commonly have Live Chat as a sign of trust and availability.

Consumers are used to freebies and discounts. In fact, the more generous you are, the more your brand is considered a success!

For mobile usage, Android is far more popular than iOS.

I hope that you have found this article useful. My thanks to the UKTI for hosting the recent event from which much of this information was gleaned.

Using the internet to export to China

Yesterday I attended a UKTI seminar on E-commerce in China.

Why you may ask? Because, as everyone knows, China is a rather large economy and one that continues to grow. Although none of my clients currently export to China it can only be a matter of time when they, or a new client, does; and I want to be ready to help!

I learned a lot and will split my observations over three articles. This first one will focus on general market trends, the second on how and where to sell online in China; while the final article will focus on social media in China.

The Chinese market

After years of very high growth, the Chinese economy is now 'slowing' to around 7.5% per annum. This is considered to be 'better quality' growth in that foreign investment is now encouraged and wealth is now spreading beyond the Eastern coast and into the interior.

The Chinese economic model is now shifting from an export-investment model towards greater domestic consumption. This offers greater opportunities for exporting high quality consumer goods from the West.

Traditionally, exporters have focused on Beijing and Shanghai. However, not only are these two cities already saturated with competition, it also ignores the rapid growth elsewhere in China. The size of the country makes it difficult to retail goods in every area which is why e-commerce can provide a good solution especially as the infrastructure is rapidly improving.

Being a large country, not only does the climate vary from sub tropical to very cold, but the population also vary in terms of attitude and even size! Understanding a very wide range of consumer profiles is essential.

The Chinese consumer

Estimates for 2020 suggest the middle class will grow to being 71% of the population in advanced cities, 67% in developing cities and 42% in emerging cities.

Middle class isn't measured on how much they earn or how big their house is, but how much disposable income they have (normally high due their being the inherited beneficiaries of the one child policy...) and their aspirations.

The statistics below are from Social Media Today.

About 45% are online - that is 618m people. However, internet speeds do vary greatly across the country.

A similar number are active users of social media.

Mobile phones penetration stands at 91%.

Register your trademark now!

The most important thing, repeated again and again, was even if you are not ready to export to China yet, it is worth spending around £1000 on trademarking your name. Once your application is in, you have protection even though the process can take 12-18 monte to complete.

There are many stories of brands exhibiting in Europe, or even just exporting to one country and someone trademarking the name in China. It can take years and cost thousands of dollars to regain your brand name....