Why Chinese Consumers are Relying on Cross-Border e-commerce

25 March, 2019

For the majority of Chinese consumers, e-commerce is part of everyday life; they are familiar and comfortable with operating mobile devices and making online purchases, creating a high demand for innovation and service delivery. As the Chinese middle class continues to grow, an estimated 126.7 million shoppers are starting to look beyond home-grown online retailers in search of better quality and value.

According to the Global Consumer Insights Survey, China is the world’s biggest e-commerce market – sales reached USD 304 billion in 2018. The country was also identified as the second largest importer by the World Economic Forum, bringing in goods to the value of USD 1.842 billion. eMarketer states that 24% of all digital purchases in 2018 were cross-border transactions, and the trend is set to grow by 8% in 2019.

Cross-border e-commerce trends in China

Foreign goods are becoming more and more appealing to the increasingly conscientious Chinese consumer. In recent years, reports of counterfeit and sometimes dangerous products finding their way into households has led to a demand for reputable, trustworthy brands.

China is home to over 410 million millennials with considerable purchasing power. Fashion, beauty, cosmetics and baby products are among the most popular cross-border purchases for this consumer group. At the beginning of 2018, the cross-border online shopping market was expected to exceed USD 125 billion. Women reportedly spend 20% more on purchases from foreign vendors in comparison to purchases made by men. The availability of customer support and insightful website content in the Chinese language plays a huge role in the decision-making process for these female consumers.

Businesses looking to break into the Chinese market will have to tackle the language barrier in order to establish themselves as credible suppliers and meet the demands of these discerning prospects. Developing content and utilising popular social media platforms such as WeChat is key to getting a firm footing in the market.

How e-commerce is changing consumer trends in China

Although the majority of Chinese residents are concentrated in the country’s bustling cities, 577 million people live in rural regions which are often very remote. This presents many opportunities for businesses who are able to cater to these markets. China’s landscape is vast, and not all homes are easily accessible, but customers are welcoming of innovation. In a survey, 44% of Chinese participants stated that they would consider a drone delivery for low-value products.

Mobile devices facilitate 76% of all online purchases in China, making it critical for businesses to ensure that websites are optimised for mobile browsing and offer payment options via popular platforms such as Alipay and WeChat Pay.

Which countries get a vote of confidence from Chinese cross-border consumers?

Japan - 72%

South Korea - 60%

United States - 55%

Australia - 37%

France and Germany - 26%

United Kingdom - 23%

In an article published earlier this year, The New Yorker discussed the tactics that Chinese tech giants like JD.com and Alibaba are using to cultivate a new consumer base in the country’s vast rural outback. With government also supporting these plans by investing in large-scale infrastructure programs to make rural regions, along with third and fourth tier cities, more accessible, it’s not hard to believe reports that hint at a doubling of size in the retail market – by 2022, online retail is expected to reach USD 1.8 trillion according to data from Forrester.

Finding your niche in the Chinese market is by no means an easy task, you will have to develop strategies to make your products stand out in an already heavily saturated market by personalising your buyer’s journey (something the Chinese find very attractive) and using your online selling platforms to communicate effectively with potential customers. Differentiation, quality, service delivery, and customer support will be your most significant assets in a booming Chinese e-commerce market.