Get a foothold in the world’s largest e-commerce marketplace

Get a foothold in the world’s largest e-commerce marketplace

Key points

Research commissioned by Royal Mail shows the average online shopper in China buys ten items per quarter. Three in four participants in our latest study claim to have increased their rate of online shopping. 

 

Already the world’s largest online market, ecommerce in China is experiencing exceptional year-on-year growth. In fact, by 2020, it is expected to be bigger than those of the US, Japan, Germany, the UK and France combined.

So, with soaring confidence among Chinese online shoppers, a potential market of over 1.3 billion people and a real appreciation of high-quality British products, UK retailers should be looking to take full advantage of this opportunity.

The average online shopper in China buys ten items per quarter

- Royal Mail, Delivery Matters

The Chinese market

According to our research, Chinese shoppers spend an average of £123 per month online. With growing internet penetration, rising middle class incomes, a desire for social status products and higher local prices, this is only set to grow.

The most popular online purchases for Chinese consumers are clothes (61%), food and drink (51%), footwear (44%) and toiletries (36%). The numbers buying these are all significantly above the international market. 

Chinese shoppers spend an average of £123 per month online

Chinese shoppers are much less likely to abandon their carts than the international average. Only 25% frequently leave without buying once something’s in their cart – compared to 38% internationally. The main reason for abandonment is because the shopper has found a better offer elsewhere. Online marketplaces are becoming increasingly successful as they build shoppers’ trust levels. They do this through only allowing sellers who own the brand products or are official distributors.

In China 86% of shoppers use online marketplaces. But whereas eBay and Amazon dominate the UK market, in China the leading platforms are all home grown. Tmall is the most popular marketplace, with 78% of online shoppers saying they’ve bought there. It’s followed by Jong Dong (70%) and Alibaba Taobao (58%).

86% of Chinese shoppers use online marketplaces

UK retailers can take advantage of these marketplaces as a quick, easy way to get products in front of millions of Chinese consumers without facing the challenges of cultural differences, translation or set up costs. In fact, Royal Mail has a storefront on Tmall which UK retailers can use for this very purpose. Find out more here.

The Chinese market and UK brands

UK retailers are particularly well placed to take advantage of this huge and growing market. Chinese consumers see UK products as genuine and good quality. Our research shows 55% of shoppers bought items from the UK in the three months prior to the survey. This is a lot higher than the international average and has grown significantly since 2015.

76% trust items bought from UK websites to be genuine

Trust and value play a big role in this love of British goods, with 76% trusting items bought from UK websites to be genuine and 83% saying they find UK items to be cheaper than local ones. 40% also think UK items are better quality.

Clothing (39%) is the most popular item for Chinese consumers to buy from UK websites. It’s followed by accessories like handbags (32%), toiletries and makeup (32%), footwear (23%) and CDS, DVDS and computer games (12%).

Go local to increase sales

Despite the desire for UK goods, there are still significant barriers to buying British. Firstly, you need to be visible to Chinese consumers. 44% find UK goods through search engines, while 30% discover them through advertising. Another 30% of Chinese consumers come across British products on social media. That makes advertising, both traditional and through social media, key to breaking the market.

38% of Chinese shoppers would avoid UK products if the website is not translated

Once they’ve found your website, there are still barriers to overcome. One of the biggest of these is the language. A significant 38% of Chinese shoppers say they would avoid UK products if the website is not translated.

Just as with language, getting local with currency is also important - 36% would like to pay in Renminbi rather than sterling.

Key steps to increasing sales in the Chinese market: 

  • Prioritise Search Engine Optimisation
  • Invest in local advertising, including through social media
  • Make sure your website is translated to increase sales
  • Use an online marketplace like Tmall to get around set up costs and cultural differences
  • Allow payment in the local currency

Get mobile to capture sales

Broadband still isn’t widely available in China, so capturing the mobile market is vital to increase sales. Mobiles are the main device for online shopping in the country, with 79% of Chinese shoppers making a purchase on their smartphone. So any website wanting to capture a slice of the market must be optimised for mobile users.

79% of Chinese shoppers make purchases on their smartphone

Key steps to increasing sales in the Chinese market: 

  • Optimise websites for mobile
  • Invest in mobile advertising

Increase trust through delivery and returns

With the size of the country and its distance from the UK, Chinese consumers are realistic about delivery times when buying from British websites. In fact, 32% expect to wait up to seven days for delivery, while another 27% expect a ten day wait.

90% say they’d shop online more if there were a wider range of delivery options

However, online shoppers in China are still demanding when it comes to delivery. With 90% saying they’d shop online more if there were a wider range of delivery options, it pays to give consumers a choice. 

According to the report, Chinese shoppers are cost conscious. 88% say they search for websites that offer free delivery. Delivery costs are also a factor in buying from the UK, with 39% avoiding buying British due to international delivery being too expensive.

Trust can also be earned through offering tracked delivery services. In fact, 34% of Chinese consumers want full tracking on items they buy from the UK.

30% of those who have purchased from a UK website have returned something

A good returns experience is important for increasing future sales. Return rates in China are generally high; this is no different for items bought from the UK. In fact, 30% of those who have purchased from a UK website have returned something and 91% of Chinese consumers would like to be able to return items for free.

Therefore it’s important to have a clear and easy to find returns policy on your website. 92% of Chinese consumers said they’d be more likely to shop with a retailer if this is the case.

Key steps to increasing sales in the Chinese market: 

  • Offer a range of delivery options
  • Offer fully tracked delivery
  • Have a clear and easy to find returns policy
  • Consider free returns as a way to build repeat business

In summary

The Chinese online market is a great opportunity for UK retailers. With some adaptations to the local culture, the use of an online marketplace and a flexible attitude to deliveries and returns, websites can take advantage of the desire for British products and incredible growth in the market.

The research was independently conducted by Trinity McQueen between 30 April and 13 May 2017 and based on a representative sample of 1,500 online shoppers in China, who have purchased items (other than groceries) on the internet in the last three months prior to the survey.

Royal Mail facilitates the delivery of parcels and letters in the UK and overseas.

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