China can be your next great market—if you’re ready for it. The first step toward success is understanding the Chinese customer experience. It’s not enough to speak Mandarin anymore. Chinese ecommerce shoppers expect a lot. You can deliver the right experience if you base your China strategy on key criteria for this demographic:
- Localize your website
- Focus on mobile
- Know your product and market for cross-border ecommerce
- Provide transparency on your taxes, fees, and pricing
If you master the art of the Chinese customer experience, you’ll be a long way toward cross-border success in China. Here’s how to get started.
1. Localize your business
Retail success in China requires a partner who knows the territory. This is often a blindspot for retailers who look across the globe and see nothing but dollar signs in a growing consumer market. The money is there, but only for retailers who understand that the average Chinese shopper needs to be understood, first and foremost.
This means playing by their rules. They need to read their preferred language, pay with their currency, use their preferred payment methods, etc. No matter how successful your brand has been in other parts of the world, your success in China relies on building trust and connections in the country. Non-Chinese retailers will fail if they go into this market with a mindset based on “this is the way we’ve always done things.”
The Land of 800 Billionaires: Finding Cross-Border Commerce Success in China
For your ecommerce business, we recommend taking an approach that suits the consumer. Consider one of three paths:
- Allow Chinese consumers to come to your domestic website to shop, and enlist Chinese cross-border ecommerce experts to help with shipping, duties, taxes, and delivery
- Open a store on one of the big Chinese marketplaces, like Alibaba’s Tmall or JD.com, which can manage marketing, logistics, and other back-end work of selling online
- Launch a website in China while working with Chinese partners to build the front-end and back-end commerce infrastructure to serve Chinese consumers
Also understand that no matter how prepared you are, your China expansion is bound to hit some snags. Frustration, disappointingly slow progress, and a rapidly changing environment in terms of consumer behavior and government regulation are common pain points for cross-border ecommerce sellers in China. Don’t be surprised by these issues, and do your best to build flexibility into your business to help weather any upcoming storms.
2. Focus on mobile
Of all the key success factors for ecommerce in China, the mobile customer experience should be the easiest for outside cultures to embrace. Mobile is a huge part of our everyday shopping around the world, from browsing a virtual storefront to paying for our purchases to researching upcoming buys through influencers or other forms of mobile marketing. But like anything when it comes to China, their mobile customer experience looks a lot different.
China went from a cash economy to a mobile-first, cashless society very quickly. By 2020, 74 percent of Chinese ecommerce will be conducted on mobile devices, compared to 46 percent in the U.S. and 45 percent in the UK, according to the Boston Consulting Group and Business Insider respectively.
One of the main ways China’s mobile ecommerce experience differs from a typical American experience is product categories for payments. In China, consumers rely on digital wallets like Alipay and WeChat Pay for even the smallest purchases, including tipping buskers on the street. It’s common to pay for anything via mobile, from food to luxury automobiles. Try buying a car with an app in the U.S.
China also stands out for the multipurpose nature of their mobile apps. WeChat—a platform that rolls the ideas of Twitter, Snapchat, YouTube, Facebook, PayPal, calling features, and texting all into one—is an emerging powerhouse as a sales channel. eMarketer says 34.6 percent of Chinese consumers spent four or more hours a day on WeChat in 2016, up from 17.2 percent the previous year, and has 902 million daily users. It’s owned by social and gaming giant Tencent. Nothing close to this exists in the U.S. or EU, and any social platforms that have attempted this kind of integration are only scratching the surface of ecommerce potential.
Ecommerce retailers entering China need to embrace the differences in the mobile customer experience to expect any chance at success.
3. Know your product and market for cross-border ecommerce
Appearances matter to Chinese consumers. They look to celebrities for product endorsements and rely on social media in their buying decisions. This might lead to a conclusion that it’s all style and no substance in Chinese ecommerce. That couldn’t be further from the truth.
High quality and authenticity are two of the most important factors that drive Chinese cross-border consumer behavior. According to a Frost & Sullivan Consumer Survey, almost 70% of Chinese consumers shop cross-border because they put quality first. About 45% list authenticity of the products as their top concern.
They will turn to retailers outside of China to find goods and deals they can’t get at home. This makes your positioning even more crucial. If you can’t promise a high level of quality in your goods or if you sell in popular categories like fashion (almost 25% of cross-border purchases in China) or beauty and cosmetics (20%) and expect to compete against well-established luxury brands like Gucci, you might as well pack it in. This market is not calibrated for those goods.
4. Provide transparency on your taxes, fees, and pricing
As we stated above, authenticity is a main success factor for selling in China. Beyond the quality of goods you sell, you must also be authentic in your customer service—especially on your taxes, fees, and pricing.
Ideally, your website should reflect all the costs of your products. Sending goods to China and leaving the payment of taxes and any required duties to customers is a recipe for a bad customer experience, which never ends well.
Remember that your competition isn’t solely another retailer that sells in your category. Your competition is also an entirely different set of rules and norms that dictate Chinese buying culture. Chinese shoppers may be open to cross-border shopping, but they are quicker to dismiss a retailer that proves they know nothing about serving their expected customer experience. One bad move where you fail to disclose import taxes or high shipping fees for an international purchase can sink your chances at breaking into this lucrative market.
Ecommerce success in China is possible—Our ebook shows you how
Any new market is a tough nut to crack. China poses unique challenges for ecommerce success. You can make headway into your China expansion with the above tips plus more insights in our ebook featuring data that demonstrates how China’s ecommerce culture is unlike anything you’ve seen before.
“The Land of 800 Billionaires: Finding Cross-Border Commerce Success in China” can help you tailor your ecommerce business to the growing Chinese consumer market with advice and perspectives on how to win in China by playing by China’s rules.
Download the book today and start on your path to cross-border ecommerce success in China.
photo by iStock