- Retail TV
With a population of roughly 1.3 billion people, China offers unprecedented growth opportunities for retailers looking to conduct business internationally. China’s National Bureau of Statistics reported last month that online retail sales in China grew 26.2% in 2016 to $752 billion. That’s more than 40 percent of all online sales around the world.
The e-commerce experience in China is on a scale like no other. From shopping on Alibaba’s Tmall.com storefronts to the immense participation in mobile commerce, consumers in China have high expectations from retailers when it comes to the online shopping experience.
For retailers looking to break into this competitive international market, here are some tips to win with online shoppers in China and succeed in the world’s largest e-commerce market.
Invest in the mobile shopping experience
According to research firm TNS Global, a typical Chinese mobile user spends roughly 30 minutes a day shopping on his/her phone. China is also the world’s largest smartphone market, accounting for 30 percent of the global market. Retailers should make sure their mobile experience is top-notch and localized for shoppers in China.
The mobile checkout experience, in particular, is important. How important is mobile? According to eMarketer, mobile sales are projected to reach nearly $1.5 trillion globally by the end of 2019. China is driving a huge part of that growth, with mobile sales accounting for nearly half of all of China’s e-commerce sales.
Mobile payment apps, like WeChat Pay and Alibaba’s Alipay, are examples of the types of payment options consumers want. These two payment options use data and analytics to personalize the mobile shopping experience and are currently the two biggest players in the Chinese marketplace. According to the UPS Global Pulse of the Online Shopper study, 73 percent of online shoppers in China say the most important option when checking out online is having a variety of payment options in addition to a credit card.
Understand duties, local taxes and the implications for consumers and your business
According to the UPS study, consumers in China rank duties and taxes as their second most important international shopping issue. Miscalculating duties and taxes, or simply not making them available early enough in the checkout process, can be detrimental to a retailer’s success. For online shoppers, not having a clear understanding of the duties and taxes they are responsible for can be a reason for picking one retailer over another.
In April 2016, as part of an effort to encourage Chinese citizens to purchase goods domestically rather than internationally, the Chinese government changed the tax rules, making purchasing luxury goods overseas more expensive for import. For retailers, changes to tax rules can cause major roadblocks in their e-commerce strategies. This makes is absolutely critical to show currency conversions and total shipping costs, including duties and taxes, during checkout to reduce cart abandonment.
There are solutions available, like UPS i-parcel, which take the complexity out of cross-border e-commerce, making it easier and more flexible for retailers to localize the shopping experience. This technology provides all of the information that consumers need to make purchasing decisions up-front—including localized duties and taxes, shipping options, delivery times, and local currency and payment options.
Win over loyalists by focusing on quality
Online shoppers in China rank product safety and quality as the top reasons for buying goods from overseas sellers. In fact, 40 percent of Chinese luxury goods purchased in the first half of 2016 were made across borders, according to a report by ContactLab and Exane BNP Paribas Research.
Retailers looking to win over shoppers in China should make product quality a top priority, especially with the rise of China’s more mature or “rational shopper” as dubbed by research firm Nielsen. These consumers, which make up 40 percent of urban online shoppers in China, keep quality top of mind and will search high and low while paying a premium for highly sought-after items.
Quality in the online shopping experience extends beyond the products themselves. Chinese consumers expect retailers’ packaging, delivery and shipping options to reflect the quality of the item they are purchasing. For retailers looking to do business in China, it’s important to partner with a logistics provider that has the global shipping and logistics expertise to deliver on heightened consumer expectations.
Don’t be left behind
The biggest risk for retailers looking to grow through international e-commerce is not targeting shoppers in China.
Success begins by partnering with an experienced logistics provider that understands the expectations and behaviors of Chinese consumers and can help deliver a shopping experience that converts these consumers to your customers.