10
Dec

A Ship In Harbor Is Safe, But That Is Not What Ships Are Built For

What were the first marketplaces you went to when you started as an online retailer? Probably the big ones like Amazon, eBay, Shopify, etc., right?

What about if you expanded overseas? You probably still focused on “known territories” like Amazon UK, Amazon Canada, or similar. (If you were really bold, you may have even ventured into Amazon Japan!)

But what about China? China can feel like a mysterious challenge where only a few dare to jump into the water. Only the big brands seem to find their way into the giant Chinese online marketplaces.

But China is super attractive to the small/medium online retailer. You just need to know the right path.

China has more than a few barriers to overcome before you can start to sell there, including customs regulations and certifications, import licensing, logistics solutions, local customer service teams, and so on. But don’t be discouraged! None of these are difficult to conquer, as long as you find the right local partner that can assist you and manage these obstacles.

Opportunities in China

Before we explore the Chinese market, let’s talk about the opportunities:

  • Total e-commerce numbers in China:
    • Q1, 2017: China online sales are more than double U.S. online sales!
    • Q1, 2017: Total online retail sales in China sum to 204.1 billion USD, vs. 98.1 billion USD in U.S.
  • Potential clients for overseas premium products:
    • 280 billion potential clients are looking for high quality premium products!
      This is the count of 2 upper class income in China (top 20% with highest income in China)
    • Overseas e-commerce orders processed by Shanghai customs reached 52.4 billion USD in Q1, 2017. This was almost double from Q1, 2016. And this is only looking at Shanghai customs!

China is known for its high customs tax on western goods, but did you know that there is a reduced customs tax process for online retailers specifically? You just need to partner with someone who knows these kinds of rules.

Current Chinese Online Retail: The Details
There are three main e-commerce players in China: Alibaba group with Taobao.com, Tmall.com, and Tmall’s main competitor, JD.com.
It is estimated  that these players alone hold around 80% of the online retail sales in China!

Other players in the market, YihaoDian, Amazon, Gome, Jumei, and VIP, hold around 10% of the sales (Amazon only holds about 1.5% of the market).

Who are the main buyers and what are they buying the most?
Young people are the most active in online shopping, with ages 20-39 comprising around 80% of buyers.
With this in mind, it’s not surprising that beauty and personal care are the rising star in online retail.

The main questions to keep in mind before entering the Chinese market:

  • Strategy – What platforms should you use to sell? What barrios your products have? Do you want to test the market first or fully invest for the best possible opportunity in China?
  • Branding – Your brand should be tailored for the Chinese audience.
  • Localization – You want to make sure you have the right products from your catalogue in the right package, colors, sizes, and senses. And you also must make sure your operation falls under local regulatory compliance.
  • Logistics – This includes details like import license, tax reduce zones, warehousing & fulfillment centers, and integration to the marketplaces.
  • Content – This can range from the translation of product information, to creating articles for the media, to photography of the items, to lifestyle & modeling that will feed the Chinese eye.
  • Marketplace store building – You will need to tailor your content to the store and integrate the store into your logistics.
  • Marketing, advertising, and PR – In China, the louder you speak, the more people will hear, so this includes everything from advertising inside the marketplace to social media advertising (like Renren.com).
  • Customer service – Your clients deserve premium customer service no matter where they are. This philosophy is no different in China.

 

FBASourcingChina is located in Shenzhen, China; and offering Amazon sellers a wide range of services, include: Sourcing, inspection, FBA prep services, air/ocean shipments, short/medium storage in L.A. and marketing services to help her client sell more and faster.

 

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If you enjoyed this content, consider joining us at PROSPER Show, March 13-14, 2018 at the Las Vegas Convention Center. 
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