Competition on Amazon is getting hotter. Thousands of products go live on the site every day, upping the ante for U.S. merchants looking to stand out, and a big chunk of the competition is coming from the other side of the globe.
Chinese sellers outnumber American ones
According to a Marketplace Pulse analysis published in January 2020, sellers from China have overtaken the number of sellers from the United States on the retail platform.
To break it down into specifics, 49% of the top Amazon.com sellers are currently based in China. Compare that to the 47% who are based in the United States. China has grown their top seller numbers from 38% to 49% in a year, and they currently hold 58% of the top 50,000 seller positions on Amazon as well as 58% of the top 100,000.
Why is China doing so well?
As one of the biggest direct-to-consumer sites in the world—not just the United States—Amazon has become the most efficient platform for China to reach American and European markets.
As reported by The Wall Street Journal, Amazon has “aggressively recruited Chinese manufacturers and merchants to sell to consumers outside of the country” over the past few years, and while Chinese merchants have had some issues on the site, such as counterfeit listings, they’ve been able to more easily move product internationally.
Amazon’s rules allow for international sellers to scoop up the Fulfilled By Amazon (FBA) designation that gives thousands of brands greater mobility on the site because they can disperse their inventory with Amazon’s help. Not only that, but goods from China are often sold at cheaper prices than goods from other parts of the globe, making it especially easy for them to compete in the online market.
Myths about Chinese sellers debunked
Stateside sellers can learn a lot about what converts by watching these Chinese sellers. The stereotype used to be that sellers from China had poor content, little to no imagery, and no reviews. This is not the case. Though some Chinese sellers are still learning, many have become sophisticated Amazon sellers.
A prime example is the Chinese seller Costzon. If you visit their seller page, you will find that most of their products have mobile optimized imagery, with product descriptions and dimensions, SEO optimized content in both title and bullet points, A+ content, and many reviews.
On top of this, you will find these Chinese sellers are spending their ad dollars where it gets the biggest bang for their buck, or Yuan in this case. These sellers primarily choose to utilize sponsored products ads to get to the top of prime search terms. Everything they do is aimed at maximizing their ROI. With little to no brand recognition, these sellers are compelled to innovate in order to sell their products to US consumers.
Because sellers like these do not need to worry about corporate style guides, brand-speak, and brand feel, they do whatever it takes to get their listings to convert to sales.
Although sellers from all nations can use black hat tactics, there are many white hat tactics that U.S. sellers can learn from their Chinese competition.
This list includes the above mentioned white hat tactics including:
Mobile optimized imagery
SEO enhanced titles and bullets
Steller A+ Content
Ask yourself, if these sellers can turn a profit with little to no branding, imagine how much better you would do when you combine these Amazon principles with your well established brands. At Pattern, we can help your brand do all of this and more.
What does that mean for U.S. sellers looking to compete?
Arthur Cheung, Pattern’s General Manager in China, says one thing sellers in the U.S. can do to compete is simply have great content and build their brand in such a way that customers can appreciate their value. This includes things like improving your seller performance, making your product page content look slick for buyers, and managing your reviews.
“Selling price is not the only consideration to buy product, but also the service, the quality, the brands, etcetera,” Cheung says.
Establishing your brand and signaling to customers that it’s trustworthy through your performance metrics goes a long way in helping you move more product.
Your ecommerce opportunity in China
While thousands of U.S. sellers are only selling in the United States, Cheung says they should think about selling and shipping their products globally to compete not only with China but with European markets and other markets across the globe.
China is the biggest market to watch, Cheung says.
“China customers are getting more rich now and there is a very high demand for nice quality product from international brands,” Cheung says.
Cheung says that cross-border ecommerce is growing very fast in China, and Chinese customers trust overseas products more, particularly things like food supplements, baby products, and cosmetics.
If Chinese sellers are pushing lots of international sales and finding success doing it, you as a U.S. merchant may be able to find the same success pushing sales into different territories outside of the U.S. where there are plenty of potential customers just as willing to purchase.
Amazon is still growing rapidly and small business ecommerce is thriving on the site, regardless of international competition. To stay ahead of the game, participating in best merchant practices and looking for ways to reach customers outside of your immediate circle are a great way to start.
Want to know more about selling product internationally or establishing your brand on Amazon? Contact one of our experts at Pattern at (888) 881-7576 or read more on the Pattern blog.