China is the country with the largest population in the world. Its 1.4 billion citizens account for over 18.47% of the total world population. This represents a huge market of people eager to buy new products and services, as well as an attractive opportunity to any company looking to expand their customer base.
However, many companies that have tried to capitalize on this opportunity have failed, as they underestimate the barriers to entry and how different things operate in China compared to their own country. In this article, we will cover important insights as to how companies can successfully sell their products in China, the best e-commerce platforms to sell on, and products that sell well in China. If you’re a foreign marketer looking to learn how to sell in China, then don’t miss out. Let’s find out how to sell in China!
Can a Foreign Company Sell in China?
As we mentioned earlier that many companies fail to sell in China, and you may be having second thoughts about whether you can really make it as a foreign company in the Chinese market. Don’t worry — success is possible! Indeed China offers various channels such as cross-border e-commerce (CBEC) that make the task easier. China has the world’s largest market for online shopping, with 782.4 million shoppers in 2020 and a projected revenue of 1,566.2 billion dollars by 2024.
Chinese consumers are ready and willing to engage with worldwide brands. However, the burden of building strong relationships with the customer base and finding the right online marketplace that fits the needs and budget of the business is entirely up to you.
Here are some challenges you need to keep in mind when you decide you want to sell in China:
- Before doing business in China, you need to do your due diligence in researching how the market interacts with foreign products. As less than 1% of the population speaks English, you will definitely want to work with someone fluent in Chinese to overcome the language barrier.
- A dedicated budget for marketing, advertisement, and contracts with online selling platforms is a must.
- When selling imported goods on a platform such as Tmall Global, your products will typically have to be more expensive than your normal price point because of the additional costs you incur, but most customers are already accustomed to and willing to pay these higher prices.
- Chinese customers value timely deliveries, which means you can not compromise on logistics. For example, Tmall Global requires their merchants to complete the delivery within 120 hours, and the product must arrive within 14 working days. It is important you have the structures in place to make these deliveries and have their information trackable throughout the entire process.
Tips for E-Commerce Success in China
Most Western companies are surprised when their usual marketing strategies do not work in China. They fail to take into account the differences in culture, assuming that what works for them will work for Chinese consumers. The following are important rules to remember if you want to successfully sell online in China.
Build Strong Brand Recognition and Reputation
One of the biggest factors in successfully selling in China is brand recognition and online reputation management. Chinese consumers can be suspicious of new things, which is why it is highly important for you to build up a good reputation with them before you can get them interested in what you are selling. Maintaining a good image is everything to Chinese customers. Working on your brand awareness and reach will be very critical to your success, as the Chinese tend to trust brands that have good reviews or brands that were recommended by friends, family, or influencers.
As the Chinese do not tend to speak many other languages, you will want to begin with creating a well-translated Chinese name for your brand. Many well-known international brands have a Chinese brand name that represents the brand’s values and characteristics. For example, Volkswagen, which means “the people’s car” in original German, is called 大众汽车 or “everybody’s car” in Chinese. Ensure that you collaborate with people well-versed in the language and culture in order to come up with a Chinese name that accurately conveys your brand’s personality and story.
The next essential component to building your brand is to create a Chinese website, ideally hosted in Hong Kong or Singapore for faster browsing speed. While it won’t be your main point of sale, a Chinese website will give your business more credibility and visibility on Baidu (the dominant search engine in China). 47.5% of Chinese consumers reported that an official website increased their purchase intent, compared to other channels like TV, radio, and newspapers. Use your website as a supplement to your presence on established e-commerce platforms.
Also, note that your website design must cater to Chinese sensibilities. Western design trends towards clean and simple designs, but Chinese netizens prefer sites with a lot of details about the brand or product and convenience features such as live chat, QR codes, and the like. Your text must be in Chinese so it is readable by your consumers, and the site must be optimized for Baidu as plug-ins for other search engines like Google will not function.
Customer Service and Payment Methods
Customer service and convenience are highly valued by Chinese consumers. They often want to chat or call before making online purchases, so it is recommended to have a line open 24/7 for responding to any queries.
Unlike in the West, credit cards are not as widespread. If you want to sell online in China, make sure you have their preferred modes of payment available — mobile payment, mainly through Alipay or WeChat. In China, around 86% of people use mobile payment.
Social Media and Social E-Commerce
Social media in China differs from the social media we use in the West, and it’s extremely important for any business that wants to be successful in China. 85% of customers regularly use Chinese social media to share their experiences with online shipping, and 55% of customers have used it to discuss foreign brands.
Social networks such as Weibo and WeChat have strengthened person-to-person connections and given rise to social e-commerce. Live-streaming sales have become popular on the networks, and many e-commerce platforms have also been integrating social media into their site.
WeChat is China’s biggest social network, and marketing on this app is essential for your brand. Users can subscribe to your brand’s account and view the content directly on the account in a feature similar to Facebook’s “Newsfeed” called “WeChat Moments.” You can gather followers and redirect them to your e-commerce platform and website, and consistently interact with current and potential customers.
Collaboration With Chinese KOLs
Key Opinion Leaders, or KOLs, are Chinese influencers that hold powerful sway over consumer buying decisions. They are social media users with a large following, and consumers trust them more than official brand advertisements as they are closer to the community and thus more “real.” KOLs are instrumental in building consumer loyalty, as many Chinese idolize them.
Finding the right KOL for your brand will be difficult, as they can be picky when choosing what brands they endorse as their reputation is at risk if they choose wrong. When trying to find a KOL, it is important to have a long-term vision for a KOL who can respect the values and image of your company. In addition, pricing can vary wildly, as each KOL will have its own methods of determining the costs for advertising on its account. Despite these challenges, you should persevere when finding a good KOL for your brand as it is one of the top methods for advertising.
What Are the Best Online Marketplace To Sell On in China?
Chinese consumers rarely shop outside of established e-commerce platforms as they already have a foundation of trust. Having a presence on these platforms will be your main avenue for selling online in China. Here is a summary of some of the biggest platforms for e-commerce.
Taobao is a consumer-to-consumer (C2C) platform from Alibaba that is open to everybody, making it one of the best entry options to sell in China. It features many types of products, such as clothing and furniture.
It has been improving its app and website to become more social, with live-streaming services, a KOL network, and a group chat function. However, as a business, you may prefer a business-to-consumer (B2C) platform instead, which is where the next platform comes in.
A spin-off of Taobao, Tmall is a B2C platform also owned by Alibaba. It is the largest e-commerce platform in China and is widely trusted by consumers. Being able to sell your products on a well-established platform like Tmall is the most ideal scenario as they already have CBEC systems in place with Tmall Global, however, there are costly barriers to entry.
Tmall has a reputation for high-quality, genuine products and good customer service, and it accomplishes this by limiting who can sell on the platform. It is invite-only, and getting selected can be difficult, especially if you are a smaller brand. If you are truly interested in selling on Tmall, reach out to them directly to bring your brand to their attention and get a chance to receive an invitation.
If you are selling high-end products, you may also want to look into Tmall’s platform for luxury brands, Luxury Pavilion.
Pinduoduo is the main competitor of Alimall’s platforms, with a large consumer base drawn in by its low prices. It started out in smaller Chinese cities where consumers wanted good deals because they have fewer resources. It includes its users in the promotion and buying process through social e-commerce and encourages users to coordinate group purchases with factories and suppliers.
This strategy has made it the second-largest e-commerce platform in China. It is a good option for selling online in China if you do not have extensive resources, as it has no commission fees, low requirements, low deposits, custom tools, and so on.
Sell in China with JD and JD Worldwide
JD.com is another popular e-commerce platform with CBEC offerings. It has a good reputation amongst Chinese consumers for its product quality assurance and efficient logistical systems for quick deliveries.
The app is akin to Tmall when it comes to reputation and reliability as well as entry process, requirements, and fees. JD has been growing steadily over the years and has a strong consumer base. As a matter of fact, JD’s GMV during 11.11 2021 was higher than the one of Tmall.
If JDcom was initially known for its electronics, it has now established itself as a powerhouse in every category of the FMCG industry and also offers services through a mini-program.
It has also worked on improving its offering of fresh products and groceries notably through a partnership with Sam’s Club and Costco as well as its own “hypermarket” selection.
Little Red Book, the app for lifestyle brands
Little Red Book, or RED, is a specialized platform for high-end cosmetics and fashion products. If you are a beauty or lifestyle brand, you will definitely want to establish a presence on RED. It is focused on user-generated content like KOL advertisements and reviews, which makes it a strong tool to advertise your brand and build a reputation.
NB: Although the little red book offers eCommerce features, we would not recommend it for brand new in the market.
What Products Sell Well in China?
To ensure your success in China, you must know what products will sell well in the market. Here is a list of the top 10 products you can sell in China.
Beauty, Skincare, and Makeup Products
Beauty products are the most popular products among Chinese shoppers. They account for over 30% of sales on Tmall Global, with skincare and color cosmetics being the highest sales in the category. Skincare products from Japan and South Korea are top choices especially.
Other favored products are beauty accessories like makeup brushes, and products made with natural ingredients that appeal to health-conscious consumers. An international brand can find a lot of success by selling beauty products in China.
Clothing and Shoes
Imported clothing and shoe brands are popular among Chinese consumers, especially the youth. They enjoy the variety of styles they can get from international brands, as well the quality of garments.
Jewelry is also a very desirable category as imported goods are seen as high-quality and high-value.
Fruits, vegetables, natural juices, and seafood are becoming very popular. Consumers are looking for products not commonly found in their market, like cranberry juice, and have growing concerns about the quality of seafood available in China.
Food supplements and vitamins are getting a lot of attention as Chinese consumers are becoming increasingly health-conscious.
As of 2020, China’s dietary supplements market amounts to 174.3 billion yuan which is almost double the amount seen in 2013
The country’s growing per capita GDP, shifting trend towards preventive healthcare and use of botanicals due to their medicinal benefits have all contributed in a major way to the demand for nutritional products.
Packaged Healthy Foods
The market for ready-to-eat meals is expected to grow 9% a year and was worth $140 million in 2021. If fresh products present too much of a logistics issue, you can also appeal to consumers with healthy foods that are easier to ship, such as dried fruit and whole grains.
The demographic of children and pregnant women are the largest consumer group for nuts, accounting for 3/4ths (75%) market share. The buyers are mostly in their twenties with 26-35-year-olds making up 56%. This young generation prefers shopping online which has already led to a huge increase over time as they did not grow up eating candy bars at gas station counters!
Wine brands have appeal in China as luxury imported products, especially if it is a brand that operates in a desirable region like California.
The fourth biggest consumer of wine worldwide is China, with $2.2 billion in sales a year; however, its consumption has been increasing rapidly over the last few years to nearly double that by 2022! The country can offer numerous opportunities for brands looking to expand their reach into an increasingly important market
Maternity & Baby Food
Baby food and other assorted baby and maternity accessories are a popular category on e-commerce platforms, as the convenience of online shopping is very important for a new mother. Healthy baby food, breastfeeding accessories, bottles, rattles, and playsets are among the products in this category.
Outdoor gear and specialized equipment for sports and workouts do not have a well-developed brand presence in China, so businesses specializing in these products have a good opportunity to lead the market.
While China is already a tech giant in its own right, consumers are still on the lookout for different kinds of imported gadgets, especially if your business has a unique offering.
How to sell in China, to conclude
In order to successfully sell online in China, you must fully understand the cultural differences that make the advertising and selling processes different from Western practices. Always keep in mind your target consumers, build a good brand reputation, choose the right e-commerce platform for your needs, and market products that you know will sell well in China.