China is currently the world’s largest e-commerce market. Last year online sales in China hit $1.149 trillion, an increase of 32% from $869 billion in 2016. In addition, Chinese consumers are increasingly finding their way to foreign online stores. The total cross-border online shopping expenses amounted to $ 17 billion last year. How did this growth come about and how can you benefit from this booming market as a non-Chinese online store?
How did the increase in online shopping in China come about?
Most of the online shoppers in China come from the big cities. However, the growth of the Chinese ecommerce market can be explained by the fact that more and more Chinese people living outside of China’s big cities shop online. Over the past year, the number of online purchases from these areas has increased by 39%, representing more than 17% of total web purchases. This is due, among other reasons, to an increase in purchasing power, but mainly due to logistical improvements1. Alibaba and JD.com have built their entire logistics network across China, linking low-lying cities and rural areas that were previously less accessible. This has ensured that retailers have easy access to a whole new market that is still in its infancy.
In addition to increasing purchasing power and logistical improvements, excellent customer service in China has also led to growth. This customer service facilitates online shopping for Chinese consumers and improves the customer experience.
How can a non-Chinese online store benefit?
In order to take advantage of the increasing online shopping behavior as a non-Chinese online store, a number of elements have to be taken into account.
First of all, the types of products demanded by Chinese consumers should be taken into account. The fastest growing internet sectors in China are sharing bicycles, food delivery services, taxi services and financial service providers. On the other hand, Chinese prefer to buy cosmetics, fashion, food, baby products and health products abroad. Account must also be taken of the image that product categories have in China. An example is the good image of baby milk powder from the Netherlands.
The payment methods
It is also important that you, as a foreign online store, offer the right payment methods for Chinese consumers. Chinese consumers use a lot of digital wallets and mobile payments. The ultimate payment method is a combination of Alipay and Union Pay, and if you run a mobile store (for example a WeChat store), add Tencent Finance to your payment method list too.
Know your customer
There are five types of Chinese consumers who shop online:
- The female Chinese consumer shops online the most and the most popular categories are clothing, skin products and baby items.
- The male Chinese consumer is mainly looking for a good price-quality ratio.
- Young Chinese mainly use social media when shopping online.
- The middle age Chinese consumer mainly buys clothing and household appliances. Unlike the young consumers, they do not use their mobile phone when shopping online, but use the web browser instead.
- The higher incomes often buy jewelry and furniture online.
 1421 Consulting (2017), What is Fueling the E-commerce Boom in China?
 Emerce (2018), Crossbordermarketing in China. Waar start je?
 Emerce (2017), E-commerce in China: kenmerken en betaalopties op een rij.