Starting an online business in China can be a lucrative venture if you navigate the market effectively. And it’ll be so much easier to do business online compared to other business trade in China. With 1.4 billion population and growing middle class, China offers immense opportunities for overseas companies. No matter you’re running small business or big well-known business. There’s always a big profitable market waiting for you. The earlier you enter China, the easier it is to achieve success.
Why is China market important?
As for why is China market important. Here are the reasons you need to know.
- Large population of 1.4 billion
When it comes to China market, made-in-China goods is what comes in your mind first, right? Why made-in-China products is so cheap? That’s because China has a large population. Remember that “the Population is not only productivity but also consumption power”.
- Rapid Economic Growth
China has experienced a rapid economic growth over the past few decades, leading to a substantial increase among its citizens. As more people have money to spend, the demand for various products and services has surged. China is the second-richest country in the world with household wealth 121 trillion RMB (as of 2022). Almost every well-known international brands has entered China market. It all because China is the second-richest in the world with strong consuming power.
- Online shopping and online payment
The data from China Internet Network Information Center 2022 (CNNIC) shows that, China had 1 billion netizens, the user size of online shopping in China was 841 million and the user size of online payment in China had reached 904 million.
- Technical and logistics
With the rise of e-commerce giants like Alibaba and JD.com. China has witnessed a surge in demand for efficient e-commerce logistics. Chinese Companies invested in modern warehouse, automated sorting facilities. And China government ensure that last-mile delivery solutions to meet the remote rural areas‘ demand.
- High demand for foreign-brand products
Due to Chinese culture and shopping habits, Chinese customers are likely to buy foreign-brand products compared to Made-in-China goods. Especially the goods like luxury, body care, skin care, heath care, food and drinks.
If you don’t know your product are in high demand or not in China. You can contact me for more detailed searching and analyzing.
Dose China government welcome foreigners to do business in China?
Yes, China’s government does welcome foreigners to do business in China. In recent years, China has taken steps to ease regulations and create a more attractive environment for foreign investment. You can check the foreign investment law of China to get details. And China established several FREE TRADE ZONES in cities like Shanghai, Shenzhen, Guangzhou, Tianjin and so on. Offering preferential policies and streamlined administrative procedures to attract foreign investment and trade.
All the business need to be operated by China law. You will find that Chinese eCommerce platforms provides foreign-brand channel (global shop), which is for overseas companies selling foreign-brand products only. That said, that’s all because with the supporting of China government.
Obviously, China’s business environment definitely will be more better for foreigners.
Understanding the China market and business culture
China market is quite unique compared to western countries. Before you diving in, it’s crucial to comprehend the Chinese market’s unique characteristics and China business culture. It’s important to do market research to know if your product is welcomed in China. Analyzing your competitors’ price, marketing strategies, etc.
China Market research
Before you enter China market, to start online business in China. You need to research China market. Is your product category popular? on high demand? What’s your price range? What’s target audience? How much market share your niche can get? What’s your budget for online business in China? Do you want to do marketing on Chinese social media platforms? sort of things like that.
B2B or B2C business model
You want to sell your products or services to China directly or you want to get distributors to sell your products instead? You need to know that if your product/brand is well-known in the world. No matter distributor way or running a eCommerce store, both works for you.
If you have a small brand, nobody knows your brand. It will be extremely hard to find distributors in China. Because there are always alternative products in China. Why would they choose to sell a brand that nobody knows in China?
That said, Chinese distributors only sell the products are already popular or on high demand. And they won’t spend money to market your brand or products.
There are some Chinese eCommerce platforms providing B2B business model for overseas companies. They are Tmall, JD.COM, Douyin supermarket. Due to it requires Brand awareness, annual revenue reviewing. So it won’t be easy if you’re running a small business.
But if you do want to work with the distributors like Tmall, JD, Douyin eCommerce platforms, you can contact me. We are the verified partner with them, we can help you with that.
Chinese online eCommerce platforms selection
In recent years, with the rapid development of online business, there are several Chinese eCommerce platforms for you to choose from. And some Chinese eCommerce platforms launched “Global store” channel for foreigners to start online business in China. That’s a proof that foreign-brand products are in high demand, and foreigners to do online business is welcomed in China.
But what are the main online eCommerce platforms in China? How do I choose the right Chinese online eCommerce platform to do online business in China?
There are several online eCommerce platforms in China. And each one has their own target audience.
- Tmall (天猫)
Tmall owned by Alibaba Group. It fits all industries, all product category. Tmall has the largest customer users in China. It provides a global channel (called Tmall global 天猫国际), only allows overseas companies to sell foreign-brand products.
So, Tmall should always be your first option to start online business in China.
- JD.COM (京东)
JD.COM is the second largest Chinese eCommerce platform that fits for non-Chinese company to start online business in China. The JD Worldwide (京东国际) is the channel launched for selling foreign-brand products only.
JD provides the best customer service and logistics in China. If you use JD fulfillment that will improve customer satisfaction a lot.
- Douyin (抖音)- Chinese Tiktok
The short video sharing platform – Douyin is the most popular social media platform in China. And Douyin launched Douyin global (抖音全球购) for overseas companies to sell foreign-brand products.
That said, Douyin is not only just a social media platform but also an eCommerce platform. Which is easy to do social marketing and drive users to your Douyin shop directly.
- Xiaohongshu (RED) – 小红书
Xiaohongshu also called RED, is a fashion and style social media platform. And it gathered the most brand/product/service real reviewing. Chinese are really like to search for reviews on Xiaohongshu so that helps them decide to buy or not.
It launched Xiaohongshu global (小红书全球购), for overseas companies to sell products in China.
- WeChat Mini Program
If you want a self hosted eCommerce platform in China. WeChat Mini program is what you should consider.
Let say if you have ways to reach WeChat users and lead them to your eCommerce store on WeChat. Then you should consider use WeChat Mini Program to build an online shop.
It’s like Shopify, you need to design your own shop and features, even the coding. Self-hosted means you have more control of your own shop (Under the China local laws).
However, the Cons is you have to manage the traffic all by yourself. That means, you have to marketing your store on your own.
- Website eCommerce
The biggest search engine is Baidu. If you’re selling ebook, courses, online service (not physical product). You can consider running an online website.
But if you’re trying to sell physical products by website. I DO NOT recommend it. Because Chinese customers don’t shopping online like that. Unless you’re some well-known brands.
- Others
And others platform like Taobao.com, Pinduoduo, Meituan, Ctrip, etc. All depends on what are you going to sell to China, to Chinese online.
Before you decide the eCommerce platform, you can contact me so that I can help you properly.
Find a local partner in China
China is a quite unique market compared to west counties.
First of all, it only focuses on China users, that means, the platforms use Chinese language only. No matter store design, products title, listing description and customer service, you need to use Chinese language. So you do need someone speak Chinese fluently.
Second, the Chinese eCommerce platforms and Chinese customers shopping habits are quite different from others. There are some marketing and operations strategies that only Chinese knows, understand. So you need to and have to work with local Chinese partners.
