China. The online sellers dream market. The unprecedented compound annual growth rate of 116% over the last five years, combined with itsunrivalled consumer base, puts China on the radar of any e-Merchant worth their salt. The burgeoning middle class and their rapid evolution into online consumers, provides an opportunity that no international expansion strategy should overlook. This opportunity however, has often been referred to as ‘The elusive dream’, always on the horizon, never to be attained.

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Selling online to China - Whats the
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China. The online sellers dream market. The unprecedented compound annual
February 03rd, 2016 Author: RSS-Feed
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2. growth rate of 116% over the last five years, combined with itsunrivalled consumer
base, puts China on the radar of any e-Merchant worth their salt. The burgeoning
middle class and their rapid evolution into online consumers, provides an opportunity
that no international expansion strategy should overlook. This opportunity however,
has often been referred to as ‘The elusive dream’, always on the horizon, never to be
attained. After all, the above only tells half the story. Insufferable bureaucracy and
red tape, ruthless competition from domestic sellers, and logistical and cultural
barriers by the score. Yet it would be short-sighted to consider these obstacles either
insurmountable or permanent features of the E-Commerce landscape in China. Let us
look at some of the key points and recent developments worth considering when
looking to enter what will soon be, the E-commerce capital of the world.
For the vast majority of SME’s, selling through a third party platform within China
remains the best route. This is down to a number of factors, most notably the fact
that it removes many of the operational, logistical and bureaucratic problems that
come with entering the Chinese market. Selling on a China-based online
marketplace, will allow you to sell your products at a low cost, take advantage of that
particular platform’s existing traffic and avoid the excruciating process of acquiring a
local company registration or ICP license. Furthermore, you will be selling on a
platform trusted by the Chinese, who will have the ability to make fast online
payments and receive their purchased items quickly. Naturally when considering your
international expansion strategy, you should always factor in what solution provides
the most advantages not just for you, but also your potential customers. E-commerce
is all about convenience,and in China, this really means the third party platforms
based there are your best option.
Dubai property market: 2016 set for
substantial foreign investment 
City Guides: Tokyo 
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3. based there are your best option.
This is not to say that third party platforms based outside of Chinaare to be instantly
discounted. While traditionally platforms such as Amazon and eBay have struggled
to make the impression they desired, there is reason tobelieve that as the Chinese
market opens up (and regulations loosen up!), its consumers will increasingly wish to
connect with established sellers elsewhere. Enter Jeff Bezos. With online sales of
around $296 billion and over 200 million online shoppers, rest assured that Amazon
will look to aggressively increase its 2% market share of this E-Commerce goldmine.
Bezos, with his ingrained ‘your margin is my opportunity’ mantra has stated that he is
prepared to run losses in China in order to secure a larger market share. To help
achieve this, Amazon has recently ramped up its business operations in China,
opening up a logistics warehouse in Shanghai’s new trade free zone, and investing
heavily inan Asian marketing strategy. In short, getting your products listed on
amazon.cn is certainly something not to be overlooked as the E-Commerce
giant looks to lure more and more Chinese buyers off the domestic platforms and on
to its own.
So what are the major third party platforms in China? E-Commerce in China is of
course synonymous with Alibaba, the online giant and brain child of its charismatic
founder Jack Ma. Aliababa runs two main E-commerce platforms Taobao and Tmall.
Taobao, created in 2003, is Alibaba’s consumer to consumer platform (China’s
equivalent to eBay really!) Taobao does not charge commission fees on transactions
and is hugely popular in China, holding an 80% share in China’s C2C market. Tmall,
formed in 2008 is a business to consumer platform similar to Amazon. By 2012 it
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4. accounted for just over half of China’s B2C online sales. It offers a unique mall
experience facilitating retailers to set up their own websites within Tmall, allowing
them to effectively occupy a virtual store on the site. Tmall sellers must pay a
deposit, as well as a commission on each transaction made. Along with the significant
traffic volume,Tmall would provide the foreign seller, with a virtual store. Together,
these two stores now account for around 80% of China’s e-Retail market. Despite
Alibaba’s evident dominance in China, several competitors have succeeded in
achieving a relatively strong foothold in this vast market. JingdongMall/JD.com
(formerly 360buy.com) has since acquired a 15% share of the B2Cmarket and is
focused primarily on electronic items.
Clearly, obstacles remain for the international online seller in China. Nonetheless,
significant progress has been made in recent years to open up the online retail sector
and include western sellers and their much desired product offering. British E-tailers
would do well to remember that while China still has a long way to go before it can
claim the level of online retail sophistication that the West enjoys, it has made
significant strides. With online sales expected to reach the $410 billion in 2016, ‘The
elusive dream’ as it is often referred to, is increasingly within grasp!
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