China has often been included in many fashion retailers’ global market expansion plan. The players do not stop at retailers. Online shops like ASOS, net-a-porter, yoox and Amazon are making lots of effort in establishing their presence in China.
Obviously, China population does contribute to this huge market. Taobao is presently the largest e-commerce player in China. It has over 39% of China online retail market with over 50’000 online transactions per minute[1]. It is not surprising to see overseas brands wanting a share of this market.
What does it take to establish e-shop in China? Here are some basics you need to know:
Let’s start with the obvious. Your site should be in Chinese, which means you need some Chinese expert who is in this field to get it set up. You best bit would be someone in China as they already know market requirements and norms.
Another question is where you should host your site. You should consider hosting it in China, if you wish to handle local transaction and runs your site with reasonable speed. To set up an e-shop in China or any website, you need to get approval from the government. Not to worry, this is only a small part that is manageable, but it would take 3 months to get it ready.
Besides an inviting site with good products and attractive pricing, don’t forget your customer service and logistic. Chinese consumers take time to find out details about the product before their purchase. It is very common to receive lots of queries from buyers. A customer service line is an assurance to your customers, you will need that.
Though credit cards are very common in China, many e-shoppers prefer paying through Alipay. There are other services available, but you will not go wrong with this. Online transaction in China is pretty well controlled and taxable. Leave that to your local accountant to manage it.
Delivery lead time for online shopping is average 2-5 days in China. Consumers buy less from overseas site due to high freight cost and long delivery lead-time in addition to payment preference. Unless it is an essential product like milk powder, not many are willing to pay through unknown resources. Tips : If your products are made in China, consider Hong Kong as your storage and delivery point. You will find it more manageable in freight cost, delivery and taxation.
All that are mentioned here, we went through them and cost us investment dollars and time. Not that we have the infrastructure set up, we do not stop there. As China e-commerce marketing is growing, more competitions pour in. Without promotion, we are unable to reach our target customers. After several tests, we resort to social media marketing. This, we find is the best way to connect to our customers and have a sustainable growth.
Our China site now hosts over thousand of selected local suppliers on Taobao retail platform. It is time for overseas retailers to move in. You no longer need to go through the pain we went through. Start selling into China by simply having a good storyline, right pricing and making your goods available. Sounds too good to be true? Yes, it is that fast to set up your China e-shop. If you wish to know more, please send us an e-mail with your questions.
Sarah MM Chiang, founder of Red Line Ltd in Hong Kong and China, China Retail sarahmm@a-redline.com
