Chinese consumers’ rising needs for overseas products have provided overseas retailers with a wealth of opportunities. However, these opportunities are not evenly distributed among all categories. Some categories are more popular; some are easier to operate; some need to be given extra attention. This whitepaper takes a deep dive into different categories that are popular among Chinese cross-border online shoppers. Suggestions about marketing, merchandising, logistics and operation will be given based on different categories. You can't miss this all-encompassing handbook!

1. Your Complete Category
Handbook

2. Chinese consumers’ rising needs for overseas products
have provided overseas retailers with a wealth of oppor-
tunities. However, these opportunities are not evenly
distributed among all categories. Some categories are
more popular; some are easier to operate; some need to
be given extra attention.
Different countries also have different popular categories
for Chinese cross-border online shoppers. Retailers need
to know what are the categories from their home coun-
tries that Chinese consumers love the most, thus facilitat-
ing a more efficient product category strategy.
Different categories require different operational strate-
gies. Some need specific web designs; some require
shipping through specific shipping routes; some require
more intensive merchandising. While there are certainly
differences in operating different categories, some strate-
gies can be adopted in all categories.
In this whitepaper, Azoya takes a deep dive into different
categories that are popular among Chinese cross-border
online shoppers. In the first part, each category will be
analyzed with respect to its market opportunity. In the
second part, suggestions to each category regarding
eCommerce website design, shipping routes, and
merchandising will be given. Finally, general suggestions
for all categories will be given.
Market Overview2
Opportunity for Different Categories
Category Popularity in
Different Countries
Local Operations That
Need to be Tailored
Based on Category
eCommerce Website Design
Shipping Route
Merchandising
Operations Suggestions
for All Categories
Marketing Campaign Design
Marketing Content Creation
Choosing the Right Marketing Channels
Conclusion
Sell to China: Your Complete Category Handbook
Introduction
Introduction1
7
10
14

3. Market
Overview
Here’s a chart of Chinese overseas online
shoppers’ shopping preferences in different
categories:
We can see that Cosmetic and Personal Care,
Mom and Baby Products and Nutrition Supple-
ment Products are the most popular categories
in China’s OOS market. However, categories in
other smaller niche categories still have a
considerable market demand. Below are the
opportunity analyses for each category:
Total Retail sales in 2014
US$22billion
Skin Care Make-up
Data from Euromonitor revealed that the total
retail sales of skin care products and make-up
products achieved year-on-year growth of
8.0% and 9.4% respectively.
As a whole, China’s Cosmetics and Personal
Care market is mainly occupied by foreign
brands. Domestic brands only represent about
20% of the market share, while foreign brands
own about 80% of the total Cosmetic and
Personal Care
1
Hong Kong Trade Development Council
2
Sina Fashion
3
iResearch
market share. This situation means great opportuni-
ty for overseas beauty retailers.
Today, China has become one of the world's fastest
growing cosmetics retail markets, and the momen-
tum still continues. In 2014, the market volume of
France and the United States’ cosmetics market
increased by only 0.5% and 1.9% respectively, while
the growth rate of China’s cosmetics market
reached 7.2%.
As Chinese consumers’ incomes increase as well as
their awareness of skin care, mid- to high-end
brand's market share will significantly increase.
Taking 200 yuan (~US$ 30) as a cutoff point:
market share of products >200 yuan
*the growth rate of high-end cosmetics retail market is higher than that of
the entire cosmetic and personal care market with 2% advantage.2
＊Overseas Online Shopping
With the large numbers of post 80s and 90s women
entering into marriage and childbearing age, the
fourth baby boom in China is around the corner.
Meanwhile, China's population aged between 0 and
14 began to increase again since 2012 and such
positive growth is projected to be sustainable in the
next few years. China’s recent removal of its
one-child policy will further boost the baby boom.
China’s mother and baby online shopping GMV
grew steadily from 2011 to 2014, which was even
higher than the growth rate of offline shopping
GMV, implying
a. Cosmetic and Personal Care1
Cosmetic and
Personal Care
Mom and Baby
Products
Nutrition
Supplement
Products
Clothing
and Shoes
3C Products Home Care Bags Outdoor
products
Eletronics Toys
45.7% 39.3% 38.6% 38.0%
30.6% 26.6%
26.1% 26.0%
24.4% 23.1%
Opportunity
for Different
Categories
Sell to China: Your Complete Category Handbook
Top 10 OOS*
Categories
US3.2billion
2012 2014 2016
18.7%
19.3%
>20%
b. Mom and baby products3

4. the accelerating penetration of online channels.
Since 2014, mother and baby eCommerce saw
faster growth of online shopping GMV than the
overall online shopping market. The explosive
growth from the second half of 2014 to the first
half of 2015 resulted in an online channel penetra-
tion rate of 15.5% at the end of 2015. Along with
the coming of another baby boom and develop-
ment of cross-border online shopping, mother and
baby online shopping market holds enormous
market potential.4
c. Nutrition and supplement products5
Chinese Nutrition and Supplement Market
3C Online Shopping Transaction 2015
B2C
Per Capita Consumption in 2014
According to Bain’s research studies, China’s nutri-
tion and supplement industry is expected to main-
tain an average annual growth rate of 8% in the next
four years to 2018 to reach US$ 19 billion.
Based on historical experience, to acquire CFDA’s
"blue hat", foreign brands normally need to pay US$
76,000 to $151,000 as average cost for each SKU,
and wait for up to 1 - 2 years to get an approval. So
before cross-border eCommerce was adopted,
unauthorized foreign brands had to sell through grey
channels.
However, cross-border eCommerce makes it possi-
ble for overseas brands to sell to China directly. As
long as the items are for personal use and shipped by
personal parcels, they only need to comply with the
Drug Administration standards of the origin country,
which has dramatically reduced the barriers for
foreign retailers.
d. Clothes, Shoes & Bags6
The market is more mature and stable after years of
development. As the online shopping market
matures, customers are starting to buy more from
online channels. The online penetration rate of
China’s clothes market has reached 32.1% in 2014.
China’s rising middle-class consumers have increas-
ing demand for overseas clothes, shoes and bags
products, especially luxury products. According to
UnionPay International, 46% of global luxuries were
purchased by Chinese customers in 2014.
e. 3C Products7
*In H1 2015, China’s 3C online shopping transaction size
was US$ 25.5 billion.
Chinese customers buy 3C products from overseas
mainly for lower prices. Certain items are relatively
more expensive in the domestic market, so custom-
ers set their eyes on overseas online retailers. Hong
Kong and the U.S. are the most popular shopping
destinations for Chinese 3C Haitao(overseas online
shopping) shoppers.
Sell to China: Your Complete Category Handbook
US$ 15.2 billion US$ 33.3 billion
4,6,7
iResearch
5
China Industry Information http://www.chyxx.com/
US$ 64 US$ 47.3 US$ 13
US$ 289 billion US$ 455 billion
2014 2015
2014 2017
(Projected)
Market Size of China’s Apparel Industry

5. US$ 8 billion
USD200USD30
US$ 11.4 billion US$ 15 billion
Europe and North America are more mature in the
outdoor products industry. Higher disposable
income has ensured people more opportunities to
participate in outdoor activities in these countries.
Due to a good natural environment and people's
yearning for a healthy lifestyle, outdoor sports in
Europe and America have a broad mass base, which
provide the fundamental support for the develop-
ment of the outdoor products industry.
Chinese outdoor sports enthusiasts naturally
preceive Western countries as pioneers in this field.
Products from these countries are more popular
than domestic brands. Consumers of outdoor prod-
ucts in China are mainly those middle class families
living in Tier 1 or 2 cities. They have higher dispos-
able incomes and are more familiar with Western
consumer goods. ARC TERYX, The North Face and
Columbia are among the most famous brands in
China’s outdoor sports OOS market.
3C retailers who seek to sell their products to China
need to keep the prices competitive. If Chinese
customers don’t find the products cheaper, they will
have no other reasons to buy.
total retail sales of Chinese toys market
average annual growth rate of 12.6%.
Spent per capita
* consumers under 16 years’ old
There is still a considerable room for growth.
Online shopping has become the new trend in the
purchase of toys. A survey in 2010 showed that
only 14 percent of parents said they had
purchased toys online in the last year; in 2014, an
updated survey found that the proportion had
risen to 46%.
According to the statistics of the State General
Administration of Customs, the value of imported
toys in China increased by 38.27% in 2015. Both
the quantity and value of many popular imported
items were experienced explosive growth in 2015.
Sell to China: Your Complete Category Handbook
8
Source: Hong Kong Trade Development Council
f. outdoor products
g. Toys8
2010 2014 2017
>
>
(Projected)

6. US Japan Korea Germany Australia UK New Zealand France
53.9%
45.7%
35.3%
28.5% 28.0%
20.4% 20.4% 19.6%
Category popularity
in different countries
Sell to China: Your Complete Category Handbook
Top 8 Countries for OOS
Most Popular Categories & Brands in China
COSMETICS HOMECAREMOM & BABY 3C PERSONAL CARE NUTRITION
SUPPLEMENT
FOODCOSMETICS PERSONAL CARE MOM & BABY
CLOTHES
& SHOES
NUTRITION
SUPPLEMENT
MOM & BABY PERSONAL CAREBAGS 3CCOSMETICS

7. Sell to China: Your Complete Category Handbook
COSMETICS HOMECARE NUTRITION
SUPPLEMENT
MOM & BABY PERSONAL CARE
BAGS CLOTHES
& SHOES
NUTRITION
SUPPLEMENT
MOM & BABY COSMETICS
COSMETICS CLOTHES
& SHOES
MOM & BABY PERSONAL CARE NUTRITION
SUPPLEMENT
COSMETICS
COSMETICS
PERSONAL CARE MOM & BABY
MOM & BABY
PERSONAL CARE
NUTRITION
SUPPLEMENT
PERSONAL CARE

8. sales, the website need to have a recommendation
system to match this need. When a customer adds
specific items into the cart, the most relevant articles
will pop up simultaneously.
c. Nutrition Supplement Products
This category requires the least web design. They have
a low rate of products updates. When sold online,
they require the websites to present certain products
in designated and fixed area.
For example, in the home page, all listed products
should display “add to cart” button. This is to increase
conversion rate while not annoying the shoppers.
a. Cosmetic and Personal Care
Products, Clothes, Shoes & Bags
These categories emphasize effective web design.
They require the websites to be attractive and
free to clutter.
They also have a reputation for updating new
items very fast. So when a new item is intro-
duced, it needs to be highlighted in the homepage
immediately. Furthermore, for fashion, an outlet
sector can be considered to be placed in a specific
area, so visitors can develop an expectation and
revisit the site regularly.
Like clothes & Shoes, these two categories
emphasize more on presenting products in
pictures. At the same time, since these categories
tend to promote sales by tie-in
b. Home Care Products,
Mom & Baby Products
eCommerce
Website
Design
Whether overseas retailers choose to build their own
Chinese version online store or go to Chinese online
marketplaces, they need to design their stores
according to the intrinsic requirements of different
categories. Different categories have different
requirement on product updates, product presenta-
tion and marketing cooperation, etc.
Sell to China: Your Complete Category Handbook
Local Operations That Need
to be Tailored Based on
Category
Outlet Sector
Recommendation System
Add to Cart

9. Under China’s new import eComerce regulations, different tax rates apply to different categories. Moreover, the
tax rate of the same category may be different in different shipping channels. Even though the new tax policy
has been suspended for a year, retailers should prepare for this development. They should choose the most
suitable shipping route to reduce costs.
Shipping
Route
B2C Direct Shipping:
B2C Direct Shipping is a formal import eCommerce model. It requires 3 records of each purchase to be
synchronized to the Chinese customs authority’s system, before the parcels arrive at the customhouse. These
3 records are on purchase, payment and shipment.
Personal Parcel Shipping:
In personal parcel shipping route, parcels are carried by international express companies. The parcels are
deemed as articles that are for personal use. Each parcel will be declared automatically by the carrier.
UPU Shipping:
UPU (Universal Postal Union) Shipping route is used mainly for personal correspondences among countries.
The Chinese customs authorities spot check UPU parcels. The rate of being checked is 5%. Parcels being
checked will pay postal tax. (The postal tax rate is 15%, 30%, and 60% based on different categories)
Sell to China: Your Complete Category Handbook
The Most Suitable
Shipping Routes
Categories
B2C Direct Shipping
Personal Parcel Shipping
UPU Shipping
Nutrition Supplement, Toys
(Lower parcel value)
Cosmetics, Home Care
Mom & Baby Products, Clothes
& Shoes, Bags, Outdoor
Products, 3C, Skin care, Toys
(Higher parcel value)

10. Merchandising
Choosing the right products is important to make your retail business sustainable in the China market. The most
important strategy in merchandizing is to use popular items to attract traffic and secure more profits by selling “long
tail” products*. Here are the aspects you need to consider when making merchandising decisions in different catego-
ries:
a. Cosmetic and Personal Care
b. Mother & Baby
1. Brand licensing and regional sales restrictions
could be an impediment for many international
first or second-tier brands. To avoid competing
with their other channels, many brands are reluc-
tant to distribute their products to other sales
channels.
2. Shipping certain cosmetic products through
international shipping is sometimes troublesome.
For example, products filled with condensed air
cannot be shipped by air.
Popular items can become unavailable. For exam-
ple, some items are extremely popular among
Chinese customers, meanwhile the supply can’t
meet the market demand. If a retailer introduces a
brand that is in short supply, it risks creating a
negative customer experience.
1. This category experiences the same problem as
Mother Baby products—high demand items in short
supply can result in bad shopping experiences.
2. It requires a lot of customer education to sell a
less known overseas brand.
Size standard difference can result in high rate of
return, which will dampen customer experiences.
c. Nutrition Supplement
d. Clothing and shoes
e. 3C
f. Home Care
g. Bags
h. Outdoor products
i. Electronics
1. Price can’t be too high compared with domes-
tic counterparts. There’re a lot of alternatives in
the local market.
2. Logistics is another major problem. Some
products can be fragile or oversized.
1. Like cosmetic products, some bag brands are
under strict brand licensing and regional sales
restrictions.
2. Goods return can greatly affect the business,
too. A large proportion of bags are luxury items,
with high corresponsing prices. Refunds can add
too much pressure to the operational cash flow.
Size standard difference can result in returns,
which will dampen customer experiences.
Warranty, compatibility and usage difference
are the major three factors retailers need to
take into account.
Content creation is of paramount importance in
promoting toys products. Educational contents
will persuade parents to buy more easily. Con-
sidering language barriers, this is not an easy
task.
j. Toys
Quality warranty and price are the major two
factors. Products with global warranty will be
more popular. Customers buy 3C products
from overseas mainly because of lower prices.
High prices will keep customers away.
Sell to China: Your Complete Category Handbook
9
*Long tail products: products that have lower demand but still get a considerable
amount of orders in total the long term.

11. Marketing
campaign
design
a. Coupons and free delivery
Campaign coupons
Cart coupons
Brand coupons
Time limited coupons
Regular/ New customer coupons
Time limited coupons can only be used during
certain time span. The purpose of it is to
increase order volume in certain point in time,
thus to boosting traffic and brand awareness.
Some coupons are designed for regular custom-
ers. By doing so sellers can build a bond with
regular customers and increase customer loyal-
ty. Meanwhile, some
The most common methods of sales promotion
in China’s cross-border eCommerce are
coupons and free delivery.
The application of coupons can be very diverse
and complicated. There are mainly 6 kinds of
coupons:
This kind of coupon can only be used in certain
campaigns. China’s eCommerce merchants like
to invent various shopping carnivals in which
customers can get a lot of coupons. It’s an effec-
tive way to attract users’ attention and boost
engagement by distributing coupons in various
online channels.
This kind of coupon is only offered to users
whose cart value has met certain amount. Its
purpose is to encourage customers to buy more
thus reduce marginal shipping cost.
By using brand coupons customers can get
discounts when buying a certain selection of
brands. This is a smart way to sell “long tail”
products, since it's not sustainable to only sell
hot products.
coupons are only for new customers. The
purpose of offering new customers favor is to
facilitate customer acquisition.
Repurchase coupons
By using repurchase coupons, customers are
offered a coupon for next purchase. For example,
retailers give a customer a coupon of 50 Yuan
that’s applicable only when he buys the same
product next time. This is an effective way to
promote certain items.
Free delivery is more important in cross-border
shopping than in domestic shopping. By setting
higher free delivery limits, sellers can encourage-
customers to buy more and increase per custom-
er transaction. This is important because shipping
cost in cross-border shipping is high, shipping
more products in one parcel will significantly
reduce marginal shipping cost. In the contrast, by
setting lower free delivery, sellers can attract
more customers and boost sales. By employing
these two contrasting free delivery strategies,
sellers can achieve different objectives.
Apart from coupons and free delivery offerings,
there are other two major kinds of promotion
methods in China’s eCommerce business:
Sell to China: Your Complete Category Handbook
1
2
3
4
6
5
Operations
Suggestions for
All Categories

12. Conditioned sales promotion consists of
time-conditioned promotion, amount-limited
promotion and single-item promotion. The
purpose of them is to appeal to new users,
prompt them to place orders and make the web-
site more active.
Time-conditioned promotion only allows a specif-
ic range of time when customers can get a
discount or “seckill”. Amount-limited promotion
only allows a certain amount of products to be
sold at a discount. Single-item promotion only
provides a single item product at a very favorable
price to customers.
b. Conditioned sales promotion
c. Tie-in sales promotion
After customers add a specific product to the cart,
retailers will recommend some related items and
offer customers discounts if they buy them together.
By doing this, retailers can encourage existing
customers to buy more and increase their satisfac-
tion at the same time.
a. Be useful
Provide high-quality, exclusive, and useful informa-
tion to users to address their specific needs. For
example, tell users about the medical kit of mothers
in western countries. Most of them are curious
about foreign information, especially on health care.
Feed their curiosity and provide them what they
need.
Marketing
Content
Creation
b. Be interesting
Chinese online shoppers are drenched in a wealth of
information every day. They won’t open every
message that they receive or read it completely. It’s
extremely important to grab their eyeballs and
attract them to continue reading. Here’s a title that
may serve this purpose: The striking comparison
between Chinese mother and German mothers in
their way of nurturing. (Chinese language can
express much more information in a short sentence
than English…) You can also present your contents
in comics, which is easier to finish reading.
c. Be on the trend
You need to understand the demographics of your
customers. Chinese overseas online shopping
(Haitao) users are mainly young females with dispos-
able incomes. They love to catch the trend and talk
about what’s on the trend in social media. For exam-
ple, Korean TV dramas are one of their most favor-
ite topics. Creating your contents using their
language and focusing on what they are interested is
always an effective way to reach them.
Sell to China: Your Complete Category Handbook
Recommend suitable cosmetic
product with content related to
hot Chinese TV dramas (Tunhuoji)

13. Choosing the
Right Marketing
Channels
a. Online Shopping Guide
An online shopping guide is a platform in which users
or the platform itself publish/ share shopping expe-
riences or products information. The biggest advan-
tage of an online shopping guide is that it has a group
of loyal users who are drawn to the community for
their common interests and experiences.
Online shopping guides operates in two ways. The
first kind is positioned as media. The platform
publishes contents written by professionals, giving
authoritative advice and opinion on shopping or
product selection. This model is called PGC (Profes-
sionally Generated Content) community.
The second kind is positioned as a social platform.
Users share their own experiences and opinion on
the platform, they can interact with each other by
commenting, liking, reposting and sharing. The
platform is built on contents created by users. The
platform encourages users to publish original
contents by giving them credits, which can gain them
special offers. This model is called UGC (User
Generated Content) community.
Both the two models accurately target at Chinese
overseas online shoppers. Users tend to develop a
high level of trust in the community and the
platform. An article recommending certain products
usually has a conversion rate up to 10%. - 10% of the
readers will eventually buy the products.
Tunhuoji is an information platform that educates Chinese consumers on
overseas products that can be bought through cross-border online shopping.
Contents are contributed by users with rich experiences.9
9
Itunes APP
The platform serves two functions in users’ shop-
ping decision making. The first is to select products.
There’re countless products from dozens of coun-
tries over the world. Consumers will find themselves
lost in the ocean of information if they decide to find
the right products from tens of thousands of prod-
ucts’ pages. To save time and energy, consumers
have no choice but listen to what the professionals
and peers are saying.
Sell to China: Your Complete Category Handbook
The second is to provide guarantees to users. Facing
numerous shopping choices, consumers don’t have
enough information to judge which one can be trust-
ed. The platform can give them guarantees for
certain products. To maintain its own brand
image,the platform must be meticulous about the
products they are recommending. All products
appearing on the platform are carefully screened to
make sure the information is truly helpful. After all, a
disappointed user will never come back again.

14. b. Price Compare sites
c. Social Media
Price comparison websites list the same products
from various retailers and rank them according to
their prices. These websites usually provide browser
plug-ins to display the ranking list automatically when
users are browsing shopping sites. This means
tremendous traffic and brand exposure opportunity.
By cooperating with the price comparison websites,
retailers can have their products displayed in the
ranking list. It’s advisable that overseas retailers
select certain low price products to go there. Even if
the prices are not competitive enough, it’s still an
opportunity to expose your products and brand.
China’s social media platforms have been facilitating
and accelerating eCommerce activity. The main
social media platforms in China, represented by
Weibo and WeChat, have been growing rapidly.
Weibo is the counterpart of Twitter in China.
WeChat is a mobile Instant Messenger app that has
a wide range of features. They are both the deal
platforms for e-marketing and branding.
Sell to China: Your Complete Category Handbook
With almost instantaneous feedback and
easy-to-use interfaces, social media platforms have
become a staple in the life of Chinese e-consumers.
Consumers in China use these platforms for imme-
diate ‘buy/don’t buy’ advice from friends, to post
product reviews, and to seek product knowl-
edge/advice from key opinion leaders. On average,
ten times more Chinese consumers based their
purchasing decisions on what was happening in their
social networks when compared with American
consumers across all age groups. This aligns with
recent research that shows the degree to which
social media drives online shopping in China and
how mobile connectivity has changed in-store
consumer behavior – reinforcing the increased
emphasis that retailers must place on social media
for a successful marketing strategy in China.
91lai, one of the most popular price compare websites in China

15. Chinese cross-border online shoppers have differ-
ent levels of needs for different categories of over-
seas products. Different countries have different
popular categories for Chinese customers. Retailers
who intend to sell to China through cross-border
eCommerce should make their strategies based on
this information. With what’s popular and what’s
not in mind, retailers can implment the right
customer acquisition strategies to attract customers
by selling popular products and secure more profits
by selling “long tail products”.
Different categories require different operational
strategies. This can be very nuanced and complicat-
ed, especially when it comes to merchandising.
Having a local expert advising you on all the com-
plexities is quite an onerous work, considering how
fast the market changes. Instead, a local partner can
help you better adapt to the market and increase
overall efficiency.
Some strategies are shared among all categories.
The methods can be learned and shared by all retail-
ers. However, acquiring the know-hows is one
thing, executing them is quite another. The compre-
hensive operational and marketing knowledge
offered by this whitepaper provides the directions
which retailers need to focus on, but putting them
into practice may be problematic if it’s done by
outsiders without local knowledge. It’s advisable
that retailers work with an eligible local partner who
can take full responsibility for growing their business
in China.
Sell to China: Your Complete Category Handbook
Conclusion
A local partner can
help you better adapt to
the market and increase
the efficiency.

16. About Azoya:
Azoya is a leading turnkey e-commerce solutions provider, which endeavours to help overseas retailers break
into China via cross-border eCommerce. The company prides itself as being the cross-border e-commerce
leader that has signed exclusive agreements with the largest number of overseas retailers in China. With its
all-encompassing services and dedicated specialist team, the company has won trust from more than 35 over-
seas retailers in 12 countries, such as Sigma, the largest pharmacy group in Australia; La Redoute, the largest
online retailer of women's apparel in France; and Feelunique, the largest online premium beauty retailer in
Europe.
For more details, visit http://www.azoyagroup.com/
Sell to China: Your Complete Category Handbook