Cross-border e-commerce is an effective medium to accelerate sales of foreign products among Chinese consumers. As disposable income has increased across China and more people are shopping online, the demand for foreign products has escalated.
There are many opportunities for foreign companies to sell to Chinese consumers but they also face some challenges. Selling on Tmall includes challenges such as getting used to the platform, logistics, marketing and ongoing storefront optimization.
Tmall has the biggest market share
Tmall holds the biggest market share in the e-commerce market in China and mainly focuses on premium brands. Tmall China is for businesses that have a physical presence in China but Tmall Global allows international businesses with no physical presence in mainland China to set up an online store.
This enables them to enter the profitable Chinese e-commerce ecosystem and sell products directly to Chinese consumers.
Working with a Tmall Partner offers companies a solution to manage their entire e-commerce operation. WPIC provides the building blocks and tools they need to activate sales in this important marketplace. Tmall Global is set up to operate with a special Free Trade Zone (FTZ) and Chinese consumers can buy imported products from foreign companies and receive them quickly.
Understanding the local market and price points
Studying the local market and understanding demand and price points is a good place to begin. There are high disposable income Chinese consumers who are willing to pay premium prices, but it is important to understand how they judge quality.
Crucially, any firm wishing to sell its products directly on e-commerce sites must prove that it owns the trademark or the right to be trading in the goods.
Retailers who sell well on Tmall Global
Female shoppers have traditionally been more active but new shoppers fall into the age group between the ages of 16 and 28 and more males are shopping online too. Fashion and personal care products are particularly popular.
Shoppers enjoy buying luggage, handbags, shoes and women’s apparel from luxury foreign brands. They also flock to cross-border marketplaces to buy cosmetics, personal care products, nutritional supplements and baby products.
Why Chinese consumers buy cross-border
Buying cross-border is not new to Chinese consumers. They have found plenty of reasons to shop cross-border, including wanting quality personal health products and baby products because they don’t trust locally-made products in these categories. They will also look for items that are too expensive or difficult to obtain in China.
Chinese consumers use established online marketplaces like Tmall rather than searching for individual brands online. As most online purchases occur on digital marketplaces, foreign companies need to take a marketplace-first strategy rather than establishing a direct retail website first.
Localization is crucial to success
Localization means having an understanding of the nuances of Chinese culture and employing this in marketing rather than sticking to Western marketing techniques.
Chinese consumers expect a high amount of interaction and engagement. They will use online chat for customer service and rely on ratings and shopper reviews on the front of each storefront on Tmall Global. They also track rating trends and expect to have conversations with merchants.
Marketplace marketing also requires understanding the dynamics of the shopping culture in China. For example, the shopping holidays are different and single’s day on 11/11 is a huge shopping day.
Chinese consumers are most active around these times – and most willing to explore new and prestigious foreign goods. To master all the aspects of marketing to Chinese consumers, it is recommended that companies work with a Chinese partner or at the very least have a Chinese-speaking associate.