E-commerce in China is for sure becoming literally a boom-phenomenon. It’s like the first fast crazy running we got towards East at the end of 90’s when everybody was looking at China as new economic power in the world.
And it must be so when we are facing with the biggest market in the world in terms of demand and wideness for online sales.
According with recent analysis we are going to overpass 600 millions of internet users until 2015 and around 150 millions of users in 2010 have been confirmed as already frequent buyers online; but more interesting to know, the number of buyers should grow till approximately 520 millions of users before the end of 2015: effectively an incredible result if we consider that in Europe according with Statista© we will be able to reach approximately 190 millions of buyers at least in the same period.
Usually when we think about e-commerce in China we could be stunk referring to complicated and un-protected system to develop online selling platforms. I think that problems concerning property rights and copycat’s risks should be pointed out as first element of the matters, but I would like to remind you that “the democracy of buying whatever you want” is one of most important perspectives followed strongly from 2010 by central Government and in general the legal system and also the awareness of consumers on buying original brands are bringing investors and developers to enjoy more safe and equilibrate environment.
Let’s check what kind of de-regulamentation nowadays represents a concrete step ahead for the development of the e-commerce environment in China
– 2010 with the shangzizi 2010 n 272 the online sales are accepted as regular and natural prosecution of usual commercial activity for foreign companies so also foreign investors are now allowed to make their products on sale online without any particular requirement as involvement of chinese co-investor and without any particular approval or distinctive business license issued by MOFCOM
– Then if you are not service provider for other operators but if you want to sell throughout your online platform your goods you don’t have to apply for specific ICP (internet content protocol) as it’s compulsory for providers that create online stores in name of third operators
The second point is very interesting and represent a boost for online businesses: if you are a foreign company with base in China you can immediately open your e-commerce service without any other specific approval or license.
I’m used to suggest to follow this way to my clients ‘cause it represents a great system to educate customers to approach specific brand or production enjoying in particular sharing opinion’s tools and crossing information through social networks. I really think that even if volume of sales are one of most important goals for an online-store, we have to remember that in China the access to information through browsers represent the first step to get well detailed info and in particular comments from other users.
Even if it seems more easy and quick try to being represented by third platforms like some services that T-Mall (owned by giant Alibaba) in particular when the company doesn’t present any legal entity registered on chinese market, we should remember that in this cases it’s more difficult to guarantee legal safety against fraudulent dynamics and payment is required oat of the times in foreign currency by exporters (due of absence of corporate- presence on chinese market) and it’s not always easy to pay for common users.
As researcher on marketing strategy for China I well recommend to place own brand or group of brands through e-commerce platform after registering own WOFE into chinese market , not only because it would be for real a concrete internationalization’s goal but also due to head for more well framed condition to boost own identity and at the same time to speed the realization of direct online store in safe and well guarantee condition without any specific additional business license.
as i’m used to say, chinese market follows specific P’s to ensure successful results on sales then
– Products: quality and distinctive features must be mediated with concrete perception of what chinese consumer is looking forward; and sometimes such elements cannot be put on focused so much through general e-commerce portal not directly managed by own management and partially created with third operators.
– Popularity: being online doesn’t mean only be sold on the web. The strategy of “word of mouth” needs to be boosted through social networks and specific promotion about brand and production that sometimes needs more intensive effort than general information summed up in general categories of multi brand online sales.
– Price : information without price it’s not so attractive for chinese customers. They need to feel they are enjoying special bargain (it doesn’t matter if we are talking about middle level products or luxury). In particular if we have something to sell that fits with medium target, the announce of special sales are really attractive among young customers, otherwise the placement of products with high price for luxury field should be successful among specific senior targets
– Passion: chinese people loves to join shengyi (business) on both sides, as sellers as long as clients; being present in the market make us more aware about chinese culture and market’s needs. I think that e-commerce can express for real such passion on doing business into chinese market as more as you can be aware about what does China represent not only as producer but also as commercial operator who choose to invest in China.
I think that chinese law’s system will proceed on more concrete and responsible way to protect property rights against copycat’s actions and government will do all the best to boost development for one of crucial factors for contemporary chinese economy like online businesses.
Un pensiero su “E-commerce in China: when platforms support to master the market”
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How e-commerce could improve direct investments to chinese market: benefit of registering WOFE to operate in online business in China. Our consulting firm is providing tailor made services for assets strategy in this field for european operators in joint-analysis with IT operators in Malta