1. AN OVERVIEW OF CHINA'S E-COMMERCE MARKET
China has the largest and the most innovative retail e-commerce market in the world. It’s a way of life there. E-commerce sales were forecast by some to rise 27.3%, reaching $1.935 trillion USD by the end of 2019. This represents 36.6% of the country’s total retail sales.
2. CHINA'S CROSS-BORDER E-COMMERCE LANDSCAPE
Cross border e-commerce is when consumers buy online from vendors in other countries. CBEC is widely used in China and 26% of cross-border consumers are high frequency purchasers. The most popular CBEC products include: beauty products, clothes, shoes, electronic products and food.
Because of the increasing consumption power of China’s middle class, more and more new, foreign products are gaining popularity with Chinese consumers who want niche, high-quality products that aren’t available in China. Because of this, e-commerce platforms have started to expand their cross-border business.
3. KNOWING THE GIANTS : TMALL, TMALL GLOBAL, JD AND JD WORLDWIDE
Alibaba’s Tmall is one of the top e-commerce platforms in the world. Tmall provides is an online department store for brands and companies to set up virtual shops and sell to customers using a B2C (business-to-consumer) model. Tmall is mostly for local Chinese brands or brands with a business presence in the mainland and plenty of big brands have their official online flagship stores on it. The Double 11 Shopping Festival, which includes international brands, breaks records every year. The festival started on Taobao and Tmall but other platforms also now have sales on the same day as well. In 2019, the Double 11 sales totals on Tmall reached 268.4 billion yuan (US$38 billion) with over 200,000 brands participating.
Tmall Global is Alibaba’s cross-border e-commerce platform and it’s been the top CBEC player for some time. Tmall Global is the first choice for foreign product purchases in most categories and is the most popular cross-border e-commerce platform. Opening a flagship store on Tmall Global takes significant long-term investment and the competition is intense.
JD.com is another of China’s leading e-commerce platforms with over 330 million active customers. JD.com prides itself on having authentic, high-quality products across every major category with specialties in electronics, home appliances and FMCGs. They’re also known for having their own sophisticated and highly developed company-run logistics system. They feature both local and international brands with a presence in mainland China.
Previously known as Dolphin Buy, JD’s cross-border e-commerce platform was renamed JD Worldwide before Black Friday in 2019. JD uses several business models, one being a B2B2C approach where it sources products from reputable sellers abroad and then sells them on its own site. It also works with brands, franchisees, retailers and traders in other ways and it’s significantly more affordable to establish a store on JD Worldwide than on Tmall.
4. SOCIAL E-COMMERCE : PINDUODUO, XIAOHONGSHU, MISS FRESH AND MORE
Social e-commerce has become very popular in China because customer acquisition costs have increased significantly on established platforms so brands and new apps and e-commerce sites are looking for novel ways to engage customers. It’s estimated that by the end of 2022, 15% of all e-commerce in China will be social and it will became a major force in online retail sales.
Social e-commerce follows 2 general formats in China. Either it’s an e-commerce app with group buying or flash sales functions that relies heavily on users sharing the link through WeChat. This is the model for apps like Pinduoduo, Miss Fresh and others. The other model is that of a well-developed social e-commerce platform, like Xiaohongshu, Mogujie and more.
5. WE-COMMERCE : WECHAT STORE AND KOL SOCIAL SELLING IN 2020
With the development of mini programs which play a key role in turning WeChat users into customers, a lot of individual businesses and big corporations have started developing their commercial presence on WeChat.
WeChat salespeople were the first businesses to appear on WeChat. They displayed items on their Moments pages, in WeChat groups or in direct messages and sold them this way. KOLs also use social media to sell their own lines and products. Brands are now imitating this model and building private traffic that is very useful for promotions, customer relationship management and We-commerce sales.
What to learn more about how to promote your brand and sell on China’s e-commerce platforms? Want to understand Chinese consumers more? Attend one of our masterclasses now and become a Chinese e-commerce expert!
What’s the difference between social e-commerce and e-commerce in China?
Social e-commerce in China is more community oriented, and more suitable for the consumer goods categories. Social e-commerce is more popular in China right now because it helps brands more effectively communicate with consumers.
We are in the B2B sector, will this module help us understand how to use e-commerce platforms for B2B?
All our trainings are tailor-made and we usually provide case studies for both B2C and B2B. Upon request it can be only focused on B2B.
After this module, will I understand which platform is more suitable for my products?
During this module you’ll get a deep understanding of the advantages and disadvantages of each platform while also answering questions about the most suitable platform for your product and audience.
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