Tackling China—the World's Most Lucrative Ecommerce Market

China is an ecommerce goldmine—as of June 2022, over one billion people had access to the internet in China, with over half of those one billion people active on its most popular channels. That being said, China is also intimidating for brands considering international expansion outside the U.S.

In a webinar hosted by Pattern, a certified trade partner in China, our experts explain the fundamentals of the Chinese market and what brands should know when expanding their brand to China. ‍

Why Should Brands Expand to China?

The level of growth occurring across China’s ecommerce channels is exciting. The area’s Gross Market Value (GMV) in 2022 was $2,779 billion, which is the highest in the world, and offers lower friction and barriers to entry than in other areas. Alibaba, which encompasses Tmall, Tmall Global, and Taobao, is dominating the Chinese marketplace, accounting for 58.2% of online sales. The GMV of Alibaba is greater than Amazon’s and other global marketplaces, providing massive potential for brands entering into the Chinese ecommerce market.

Things to Know About Prior to Launching in China

China’s approach to customer service and distribution differ from the U.S., and those distinctions are important to keep in mind as you consider if expansion is right for your business. “You’ve got to understand the culture is different and they might have a different paradigm when they’re dealing with you,” said Chris Vincent, Chief International Officer at Pattern.

1. Understand the Chinese Concept of Face

According to Vincent, one of the most important things to keep in mind as your brand considers China is the idea of face. “It’s almost like dignity and prestige wrapped up into one thing,” Vincent said. “Face really can stop people from giving you an honest answer about things if they think that it will diminish their face or make them lose face.” Maintaining face is particularly important to keep in mind when building business relationships and partnerships within China. It can also impact your growth in the market.

2. Optimize Customer Service

Brands in China are expected to offer stellar customer service. Most customer service in China is carried out via live chat, in fact, 80-95% of all transactions for your brand will touch customer service in one form or another. Chinese shoppers are very careful about what they purchase–they need to know they can trust the businesses they’re buying from. To give them reassurance, Chinese consumers need as much information as they can get before making a purchase. Here’s a few things customers expect to see on product listings:

• 360 Images
• Product Videos
• Informative Live Streams

3. Know the Sales Holidays in China

Similar to Amazon Prime and Black Friday, sales holidays in China drive billions in revenue and can lead to lots of growth for brands who do them right. JD’s 618 festival, a sale occurring on June 18th, and Single’s Day, China’s version of Prime Day, are great examples of major market holidays. In fact, for some brands, one hour during Single’s Day drives more revenue than all of Black Friday (24 hours) sales, showing the value in that market.

4. Make Your Product Stand Out

There are many ways your brand can stand out in China–such as using capabilities like live streaming and customer interaction through microblogging. Tmall has the ability to reward customers based on their engagement with brands, and that engagement can help you stand out. Providing marketing through local influencers who can spread the word about your product and increase its face value is one way to increase engagement.

Find the Right Trade Partner For Expanding to China

Whether you’re a brand looking to expand into Asia, or you already trade in China and are looking for a partner to help you succeed—Pattern can help. Expanding successfully into China requires a team with skills in areas such as analytics specialist, trading, social media strategy, project management, and channel optimization, just to name a few. As a certified trade partner, Pattern has all the resources, skills, and local experts necessary to win in focused sales regions throughout Asia. Thinking of expanding your brand to China? Contact us.