China Dujiangyan Gate

Over the last 30 years China has experienced unprecedented social, structural and economical change bringing huge opportunities for e-commerce merchants. With online retail sales in China hitting $589 billion in 2015, the country has overtaken the US and UK markets with their combined sales of $505.97 billion. Moreover, the Chinese market is expected to triple and approach $2 trillion by 2020, so it’s easy to understand the attraction of the market for growing UK small and medium-sized enterprises (SMEs).

Of course, much work and analysis is required by any businesses thinking seriously about entering China but on the assumption that it ticks the right boxes and a business strategy has been set, there are a number of e-commerce obstacles that need tackling before the open sign can be hung up. Here are some of the key points to work on, as well as some potentially valuable pointers.

  1. Chinese SEO
Having a website optimised for search engines such as Google, Yahoo and Bing is a tried and tested way to gain customers for online brands. However, in China, many of these search engines are not available, with Baidu being the leader of online search in China holding a market share of more than 80%. As with Google here in the UK, there are several best practices on how to improve search rankings on Baidu. Many are similar to those of Google, but there are some which are China specific, including having a multi-lingual website, regular relevant content in the correct language as well as setting out URLs specifically tailored for Baidu to recognise.
  1. Cross-border shopping
With an expected 36 million Chinese shoppers spending $167 billion on international purchases by 2018, the growing popularity of cross-border shopping makes China a rich source of interest for many businesses. Online shoppers are generally young in the Far East, with 84% of cross-border buyers aged between 24 and 36 years old – the majority of which being female (66%).

And while this demographic in China becomes more active, they are also earning more than the average person – more than double, in fact. Having an online shopping experience that matches their expectations is vital, especially as reports point to their online shopping habit only increasing further in the future.

  1. Online payment
With the dramatically increasing number of cross-border and online shoppers in China, optimising your site accordingly and using Chinese online payment methods are vital steps towards online success. If you don’t offer the right local payment options, the shoppers might look but they won’t buy.

China is dominated by two online payment methods - Alipay and Tenpay - with a 49.6% and 19.5% respectively. By offering Alipay or Tenpay as a payment method as Checkout.com does, both domestic and cross-border e-commerce merchants are able to accept payments from a combined force of 500 million Chinese consumers. Alipay provides an impressive majority of this number with 300 million members and an overwhelming 80 million daily transactions.

Similar to Alipay, Tenpay offers a cross-border solution, allowing companies to take payments from 200 million Chinese customers. These two payment methods are currently dominating the Chinese online market and are crucial to offer to online customers within the e-commerce sector.

  1. Optimise for mobile
Online retail sales via mobile devices amounted to more than $334 billion in 2015, making up 50% of the total e-commerce sales. Even more importantly, m-commerce numbers are predicted to rapidly increase over the next five years, reaching a total of $1.4 trillion by 2019. With the large number of mobile phone users, combined with online shoppers increasingly choosing to buy from their mobile phones in China, it is crucial to have a mobile optimised website and a mobile strategy, depending on the sector you operate.

The $2 trillion market on offer thanks to a middle-class that is quickly growing bigger and more affluent isn’t finished just yet. The Economist recently predicted that by 2020, the Chinese e-commerce market would be bigger than the existing markets in America, Britain, Japan, Germany and France combined.

The difference between success and failure in China has a number of factors behind it, but what is without doubt is that getting it right online will have a profound effect.

By Guillaume Pousaz, founder of Checkout.com