Introduction to China e-commerce

What is size of the e-commerce market in China?

As a percentage e-commerce now accounts for an estimated 8% of consumer goods spending in China. The mainland China e-Commerce market is estimated to reach around 2 trillion RMB, or 300 Billion $USD in 2013.

Do I need a locally registered company to sell online in China?

A: On the internetyou can sell online to everyone in the world, no matter where you are based. However, Chinese do prefer to go online shopping on their local, well known e-commerce platforms like Taobao, Tmall, and 360buy. Seeking and purchasing from a local platform clearly shows that the goods are “close by.”

And yes, in order to get onto these “big 3” platforms yes you do require a local China office or registered distribution partner whom can represent the business.

Who are the major players in e-commerce in China?

The major players are Taobao/TMall, 360Buy and Tencent. Combined they have 2/3rd market share of online spending in China.

Jack Ma, Founder of Alibaba, Taobao and Tmall is “the richest man in China.” Taobao recently hit 3 Billion $USD in turnover on a single day.

The group had an annual turnover of 160 Billion $USD in sales in 2012.

What are Chinese purchasing online?

Chinese are spending on clothing/fashion, luxury items, books, stock market info and share trading, holidays and travel related services. Health products, from reliable brand suppliers are also popular.

Who uses e-commerce?

Chinese are now the-most comfortable online purchasers on earth.

Clothing and gifts are the most common products bought online. Both B2C and B2B business is conducted online.

It depends what product or service one is seeking to which website they go to buy the product.

If for a cheap, FMCG product then they would most likely go to Taobao and make a purchase based on price, and, nearest region/or location for ease of delivery.

If it is a branded, quality and mid priced product then they will likely use TMall, which is similar to Taobao but restricted to registered and licensed companies and brands.

If they are seeking a luxury or imported product or service, then they are likely to prefer the official brand website and or web store itself.

90% of Chinese will search and review a product online before choosing to buy.

What store should I choose for my product?

It’s all about the quality of goods and price you are selling at.

Taobao and TMall both offer relatively easy ad affordable ways to get started but there are some limits to what kind of store you can build on their platforms. Their strength is in their wide popularity, range of products and rates of high return users.

For those wanting to have a great “brand look and feel” web store then we advise building your own. Having your own platform means you can design and style and track, and use CRM sales tools as you wish.

What do you advise?

For international brands actually we advise having both a localized TMall and your own international e-commerce solution. For platforms we would recommend Magento or Druple as current good platforms for your China e-shop.

What payment systems do they prefer?

Chinese prefer to pay Cash on Delivery. Even for items such as furniture or airline tickets COD payment is quite common.

Using a 3rd party such as AliPay or PayPal is also popular, as are direct online bank wires. Payment by Credit Card is not as popular as with western nations.

How to get started? Much paperwork required?

Having a registered China office, or, a local partner is essential for setting up sales platforms on “the Big 3.”

Worth checking with your web master if your e-shop is already Chinese text enabled, if yes it can be just a matter of translating content and you are ready to open online.

What’s my competition like?

The online China market is competitive. One must consider regional brand and CRM marketing, long term SEO and product targets and, if you can afford it, engaging in active SEM (paid traffic marketing).

Also, there are special China localized software “traffic cookies” worth adding that track shopper behavior and can assist drive online sales.

Can you give us some examples by industry?

Snapshot examples March 20, 2013 of some good China e-commerce platforms/websites and related Cost Per Click / “CPC” on Baidu.

1. WINEs:

URL: yesmywine.com

Business Name: “Yes My Wines”

Estimated traffic last 3 months: 798,870 monthly

Estimated sales last 3 months: 3000-4000 orders daily

"Members" as of March 1 2013: 5.2M by end of June, 2012

Baidu CPC for Key Word “RED WINE”: ¥RMB 4.0/ $AUD 0.61

2. LUXURY GOODS

URL: omegawatches.cn

Business Name: OMEGA

Estimated traffic last 3 months: 28,320 monthly

Estimated sales last 3 months: EU$500M in 2011

“Members” as of March 2013: n/a

Baidu CPC for: “SWISS WATCH”:¥RMB 16.5 / $AUD 2.54

3. TRAVEL

URL: uzai.com

Business Name: uzai (travel)

Estimated traffic last 3 months: 565,350 monthly

Estimated sales last 3 months: US$560M in 2012

"Members" as of March 1 2013: n/a

Baidu CPC for: “FLIGHT TICKET”: ¥RMB 4.0/ $AUD 0.47

4. CLOTHING

URL: VANCL.cn

Business Name: VANCL

Estimated traffic last 3 months: 2.32M monthly

Estimated sales last 12 months: US$1.05B in 2012

Baidu CPC for: “WOMEN’S CLOTHES ”: ¥RMB 4.0/ $AUD 0.61

5. ELECTRONICS

URL: cnsuning.com

Business Name: SUNNING

Estimated traffic last 3 months: 107K monthly

Estimated sales last 12 months: US$2.9B in 2012

"Members" as of March 1 2013: 80M in 2012

March 20 Baidu CPC for: “MOBILE PHONE”: ¥RMB 4.0/ $AUD 0.87

Read more:

http://www.chinainternetwatch.com/1927/overview-of-top-7-online-retailers-in-china/#ixzz2O8NFkDvb

China PPC

 

MORE NOTES

• Tmall.com: 100 million registered users and total transactions is reaching 200 billion yuan (USD$32 billion

• 360buy.com: 40 million registered users and total transactions is reaching 60 billion yuan (USD9.62 billion),which may turn to 100 billion yuan (USD16.03 billion) in 2013

• Suning Appliance: 10 million registered users. E-commercial revenue account for approximately 13.2% of its total revenue.

• Gome Appliance: 1 million registered users. and the whole sale is reaching 47 billion yuan (USD53 billion) in 2012.E-commercial revenue account for approximately 0.1%

• Tencent e-commerce: 240 million registered users, and the whole sale is reaching 17.1 billion yuan (USD2.74 billion),this year may turn to 30 billion yuan (USD4.81 billion) in 2013

• Walmart: 24 million registered users. and the whole sale is reaching 43 billion yuan (USD6.89 billion) in 2012.E-commercial revenue account for approximately 2.4%

• Carrefour: 24 million registered users.E-commercial revenue account for approximately 9.51%

China PPC

 



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