Why China E-commerce Goes So Fast?
All of us are very well aware of the magnitude of the Chinese online market and, although it is currently the largest Ecommerce market in the world, it is also the most changeable one.
From 2 Open, we want to enable your approach to China giving you some practical guidelines about the current state of Ecommerce in China.
Understanding what is happening in China needs time and a constant willingness to learn: sometimes its fast evolution makes it hard to follow the new trends, other times foreigners just find an incomplete analysis.
According to the analysis report done by Data Center of China Internet -from now on DCCI-, China has currently taken the first place as the greatest E-commerce country in the world, while the online shopping penetration rate of China is in the second place after United States.
The result of China E-commerce indicates the Chinese economic keystone in recent years, also their development trend of commerce in the future.
As a result, in 2 Open we strongly believe there are more opportunities in the future for E-commerce development.
There are a range of factors we should take into consideration in our approach to the country:
E-commerce market is booming, due to the existence of multiple factors which stimulate the development
In 2015 in China, penetration rate of online shopping reached to 56%. This means there is a huge space to further development comparing with the most-developed countries, and a great opportunity to companies coming to China.
Although there are many factors which are promoting the trend, the main reasons can be summarized in a set of main points:
- Population: Until June 2015, China has 668 million netizens, 594 million mobile phone users and 374 million online shoppers. This leads us to a great size of online shoppers and a strong demand in domestic market.
- Policy: China and its Government have adapted many strategies and measures to promote the E-commerce development. It is a fact that the confluence of two forces have achieved incredible results in recent times.
- Technology: The mature E-commerce relating technologies facilitates the promotion of various industries, especially those related to the Big Data, Internet security, Online payment and Mobile technology. A niche market that is worthy.
- Enterprise: Internet companies have finally joined and distribute to the whole industry, so the result has been that most of the traditional E-commerce companies are transforming to the New Model. Thanks to it, the industry chains of BAT (Baidu, Alibaba, Tencent) cover a large area in China and it is expected to keep growing in future.
- Ecological Integration: The whole industry is getting into a mixture between online and offline industry. Take a look to Alibabas example: they have relied on the industry chain of E-commerce to integrate video, games, travel, finance and other fields into a complete unity. That is the future!
- Basic Infrastructure: Internet infrastructure develops rapidly, especially the Mobile Internet. But also 4G is changing the scene: in the end of July 2015, China 4G accumulated more than 250 million users and 4G base stations were over 1.53 million, of which the construction of TD-LTE base stations were over 1 million. Nowadays, 4G smart phone has already accounted for 82.7% of the domestic smartphone market and seems there is still a gap to fill.
Accommodating to the human-oriented strategy, the E-commerce marketing gets a standout result
With the diversification of E-commerce, the elements influence on the marketing result also became complicated, thus the marketing KPIs should be clear for the marketing themes and goals.
E-commerce marketing has changed from past into a new model of advertising, which is accommodated to the Internet users.
The Model of procedural purchase facilitates the result of advertising, optimizing the convention, and achieves 3 times of ROI:
- The user is the focus: Advertisement position of E-commerce marketing is transforming into human-oriented.
- Procedural purchase is pushing E-commerce marketing into OTG (On-The-Go) model.
Rapid growth of mobile terminal and Big Data brings more commercial values
Now in China Ecommerce market, users, marketing and advertisement investors are in favor of mobile terminal. With the development of mobile technology, the traditional business was greatly impacted.
¿The result? Big Data sharing connects user, product and service together; each data channel communicate with others can release a higher-value data stream.
Vigorously develop of the “festival event”
In recent years, the festival promotion has become an important way of arresting customers. Since November 2011, it has already turned into a battle for the Chinese leading E-commerce companies.
But also the advantage of big data sharing and innovated technology did a tremendous support in the precise marketing and advertisement.
Take Tmall as an example: in 2015, the turnover of Tmall reached ¥57.1 billion just in one day. A huge amount that can still increase.
The tremendous transformation that China lives, cannot be understood without experiencing it by firsthand.
From 2 Open, we have a global perspective and the expertise any company thinking on coming to China needs to develop its business in the country.
If you are looking to take advantage of Chinese Ecommerce, we will be happy to help you.
This article has been edited by Paula Vicuña, from 2 Open
Is Latin America a Strategic Spot for the Chinese market?
Over the last fifteen years, Chinese Government has experienced an increasing attention on the possibilities that Latin American market can provide to them.
This article seeks to shed light on the current situation between both regions, and their future possibilities.
According to Chinese policy, in recent years the country has developed a new global strategy: Africa, Latin America and the Caribbean have become as key-players on its rise to the international scene.
Since 2000, China has settle its action on bilateral free trade agreements and loan commitments. Despite its evolution, the role assumed by China is yet far from a real partnership with Central and South America.
In future, commerce and investment will be the basis for establishing a lasting partnership and a socio-economic development in manufacturing, labor, services and financial support.
Which are the main factors that define their relationship?
The relationship is based on three basic purposes:
- Political Relations:
China has currently become a permanent observer in the Organization of American States and a member of the Inter-American Development Bank. The country also participates actively in the Economic Commission for Latin America and the Caribbean.
In addition, China has signed free trade agreements and institutional arrangements with some of the regional countries.
- Economic Relations:
China plays a leading role in the future economic scene in the region. Latin America exports to China are raw materials, such as minerals, ores, oil seed, meat, cooper and soybeans.
Economic Relations are mostly conducted by Chinese Public Sector: Trade, Investment and Financing enhance the mutual cooperation and the collaboration is constantly increasing.
The Chinese investment effort has been particularly strong in two important fields: Energy and Infrastructure.
- Cultural Relations:
Chinese cultural expansion is closely linked of their latest conception of International Relations based on pragmatism and soft power.
In recent years, many Confucius Institutes have started their activity in Latin America, but also Spanish language has experimented a huge growth in China: educational and cultural exchanges are on the rise.
Is there ROOM ENOUGH for a common trade based on high value-added?
Latin America suffers from a scarce innovative effort, while China struggles to turn its economic system into an innovation model, highly rooted in the high value-added.
ICT-based services, Information technology and also Ecommerce are expected to grow in Latin America. The Global trends in Crossborder Ecommerce will be a challenge to the international integration of Latin America and a great opportunity for MSMEs.
Are you already familiarized with Crossborder Ecommerce and B2B, B2C, C2C, B2G and C2B Models? In search of an Ecommerce Consultancy Agency?
From 2 Open we can help you develop your business and to boost your company into International Sales.
How to use Tencent Penguin Intelligence in your approach to the Chinese market?
Are you looking for the latest news of Tech innovation in China?
The goal of this article is to shed some lights of why Penguin Intelligence is a work-tool to keep in mind on your approach to China.
Penguin Intelligence is the official data platform from Tencent Technology
Tencent Research Organization works such as a professional organization which publishes in-depth reports about the Chinese mobile ecosystem.
Penguin Intelligence performs research and advocacy concerning hot-topics. It also studies markets, trends and best emerging practices.
Their work is founded on a rigorous thorough understanding of every Industry Focus, Sector Dynamics, Case Studies, Data Analysis and Macro environment.
Penguin Intelligence is constantly optimizing the analytical model
Penguin Intelligence is your best choice if you want to figure out what is happening in Chinese Internet Industry. Unfortunately, their business analysis and reports are only available in Chinese for the moment.
Penguin Intelligence also counts with three original sub-columns:
- Penguin Investigation
- Penguin Analysis
- Penguin Portfolio
In addition, Penguin Intelligence includes an Open Platform, which is a huge cohesion of all wisdom from China technological business.
What will you find in Penguin Intelligence?
As we have mention above, Penguin Intelligence contains a full variety of reports, infographics and data.
There are more than thirty valuable Business research reports, hundreds of in-depth analysis reports that have been already published and the Platform keeps growing every day.
The influence of these reports / studies has touched up multiple areas of Internet and traditional industries.
Due to its importance, Penguin Intelligence currently enjoys high reputation and credibility in Governments and Enterprises.
To illustrate the kind of searches which can be done, from 2 OPEN we have compiled a brief list of some of the most striking examples that you can find on the Platform:
- In-depth reports and fresh data about Tencent ecosystem; WeChat public accounts: What type of articles get the most attention from readers?
- Many infographics and graphs about mobile ecosystem in China; iPhoneS sales in China
- Data about digital marketing customer behavior; Do customers prefer hongbao or discounts?
Relying on Tencent, Penguin Intelligence contains a large user base and massive data advantage of products in multiple fields:
- Social networking application: WeChat (Most-used application in China)
- Social networking service: Qzone, Tencent microblog, Tencent Video
- Instant messengers: QQ, QQ International
- Online payment system: TenPay (which is similar to Paypal)
- Cloud storage service: Tencent Weiyun
- Own search engine: Soso.com
- Media player: QQ player, QQ Music, KuGou Music, KuWo Music
- C2C auction site: paipai.com (now merged with JD.com)
The huge scale of Tencent Data is the cornerstone of Penguin Intelligence ability to mine and analyze data, and serving professional market insights and industry reports.
Do you want to discover a little more of Penguin Intelligence?
As a Digital Marketing and Sales Agency, from 2 OPEN we often suggest you to contact us for a deeper understanding of all knowledge Penguin hosts.
Do not forget to subscribe to our Newsletter to receive some special information about China!
This article has been edited by Paula Vicuña from 2 Open.
How to take advantage of the latest E Commerce revolution? U-Commerce trend
Nowadays, we all are very well aware of the importance of Ecommerce on current business.
E-Commerce has been a great revolution for companies and customers, helping the exchange of goods and services without geographical barriers via Internet.
With most of famous brands selling via e-Commerce and the development of B2B, B2C and C2C markets, the last revolution has come to stay: the Mobile Commerce or better known, M-Commerce.
But, What do we mean when we talk about M-Commerce?
The increase of the usage of smartphones and tablets and the growth of its capabilities, lead to a higher percentage of the population using technological devices to purchase their goods or services. According to the increase of the demand and in order to take advantage of this new trend, Companies have already identified the need to adapt their ways of selling to the portable devices.
China, the biggest consumer via E-Commerce country and a technologically advanced market, is a good example to put into consideration: the Retail and C2C ecommerce sales have grown from the 9% to the 55.5% since 2013.
This information show us that nowadays, most of the C2C Chinese customers prefer to use the mobile device than their PCs or laptops.
Omnichannel Marketing, What´s its purpose?
At the same time, to E-Commerce has joined a new feature: the existence of the multichannel approach to sales, or “Omnichannel”.
This channel is looking for the continuous shopping experience of each customer. The aim of the Omnichannel Marketing is offering a continuous experience to the user, independent from the device or channel chosen.
In practice, this leads to a complete integration between phones, tablets and computers and it requires the combination of an anthropological and technological strategy in approaching the users in a smarter way.
From the combination of all this, arises the U-Commerce concept.
What is U-Commerce or Ubiquitous Commerce?
If we simplify, we would say that we are talking about U-Commerce when E-Commerce is based in the customer experience.
The user must be in the center of all Companies’ strategies. Those Companies using U-Commerce must be able to provide personalized service to their clients from the information they get from mobile devices and PC-s.
The keys are: customizing and navigation experience created in cooperation with the User.
How is this possible?
It is obvious that the technological development is responsible for this change and makes necessary to pay attention to the internal customer databases.
Companies must try to find out common interests between potential clients who visit their EShops, considering each potential customer as unique and with their own preferences and priorities.
Efforts should be directed to avoid high rates of leads who finally give up navigating in the last purchasing phase, and reach around 60-70%.
This is the crucial reason for companies to invest their efforts and resources in understanding the customers and their behavior: to boost sales.
A lack of privacy: How companies use data?
U-Commerce uses personal information in order to provide a personalized service. A big number of customers feel disrespectful that a company can get their personal information and manage it as they want. Therefore, we must emphasize the benefits that the data can bring to the user and treat delicately the data we are able to collect.
Times are changing and the number of E-Commerce consumers is increasing exponentially and also the M-Commerce is growing very fast.
It’s important to face it and consider user’s needs, their preferences and desires. So companies must rechange strategies and adapt to the new eCommerce “revolution”.
Are you thinking about improving the user experience and exploit the advantages that the use of Online Marketing gives us?
Come to us, We are expecting you!
This article has been edited by Paula Vicuña, from 2 OPEN.
Tencent and JD Launch Targeted Brand Advertising on WeChat
From the association of Tencent –owner of the biggest social platforms in China- and JD.com –the leading online direct sales company in the country-, has emerged a new conception of Marketing and Brand Advertising.
In 2016 in Beijing, both released a plan based on Ecommerce marketing service called “J&T Plan”.
The new policy was aimed to provide a tool to accurate a better portrait of the potential user, and improve the interaction with the consumer.
As a result, users data has become extremely valuable for any company:
Knowledge is power, more than ever.
What are their main Goals?
The aspiration of Tencent and JD.com partnership has been to provide a pleasant and high quality service to their users.
To reach its purpose, they have focused on three main objectives to strength its business on mobile and Internet, such as:
- Mobile access points
- Traffic support
- Ecommerce activities
Their desire to turn the user into the protagonist of the new Marketing, has launched a new approach based on three main ideas:
- Multi-dimensional user insight
- Effectiveness analysis
- Precision target audience
What do they want in Return?
Not only a commitment to the future and an advantage over its competitors, their relationship also give them some specific advantages:
JD.com obtains a stake in Yixun, PaiPai C2C marketplace businesses, logistics personnel and assets and QQ Wanggou B2C.
On the other hand, Tencent will offer level one access points in Weixin and Mobile QQ and support from other key platforms to JD.com.
In order to provide a better online shopping experience, they will also work together on providing solutions to online payment services and an overall digital marketing solutions.
If you are thinking on improving your company services, before starting a Business and Marketing Plan you should take in consideration some basic recomendations:
Build a well-aimed portrait of the users, improve brand experience with the client, and enhance technological tools to achieve it, have become the three key factors to consider on any approach to potential customers, and the best guarantee for the future of your company.
From 2 OPEN we have conformed a team capable of responding to new challenges and specialized on Business Intelligence. We can help you to deal with the new Marketing and Ecommerce trends.
Come with us. Together we will reach your company goals.
This article was edited by Paula Vicuña from 2 OPEN.
How to optimize traffic within 1688.COM to obtain leads?
Interested in the B2B market? This article is for those currently interested in launching a B2B ecommerce initiative!
Following our instruction of How to Sell B2B Online in China, from 2 OPEN we will guide you on the most famous Chinese B2B platform –1688.COM, to obtain leads for your company, giving you the basic information to learn how to deal with traffic.
In order to develop your sales in a business-to-business, it is important to analyze which actions can be done to improve your company results.
From 2 Open, we have listed for you some of the key-factors to make it easier your landing on B2B. With our help, your company will take a huge advantage of this big chance on Chinese market!
WHAT IS 1688.COM?
Alibaba is currently the biggest Chinese eCommerce company. It dominates the Chinese online marketing in various aspects and includes on its services: online transactions, payments, promotion, service and communication.
In order to focus on B2B market, Alibaba created a portal for domestic B2B trade in China, 1688.COM. In 2013, 1688.COM launched a direct channel that is responsible for $30 million in daily transaction value.
After 14 years development, now Alibaba leads B2B into the full digitalization in China and it is responsible of the great revolution B2B has experienced in China.
HOW TO USE 1688.COM?
As the domestic B2B portal in China, 1688.COM has millions of vendors but does not support English version for foreign users.
In order to improve your position and make you easier, from 2 OPEN we will give you the specific information of acquiring traffic within 1688.COM.
To provide an accurate sketch for you and due to its importance, we have chosen Solostocks as the example below:
- First, Go to the homepage of 1688.COM:
- Second, Create Solostocks’s online shop in 1688.COM
After the registration, you can access it with Solostocks.1688.com.
- Third, Optimization:
When the online shop settles down, we can optimize the traffic through strategies within Solostocks.1688.com. The internal optimization of the online shop could bring your company more traffics and leads.
From 2 OPEN, we suggest you six strategies to apply to leads generation, such as:
- Product release:
In proper way, product release can fulfill the product category and increase Page View (PV).
Product quantity is not the key point for B2B selling but is the product category, title and description. Remember the more detailed the information is, the more opportunities for searching there will be.
- Shop decoration:
Shop decoration is aiming to provide a good visibility to viewers: useful information in organization will fully convey to viewers and improve the CTR also display structure has to be recognizable and practical.
Key modules include logo, navigation, introduction, display, share/favorite, communication etc.
- Text content:
Text content includes all the product descriptions and introductions.
It is crucial to pay attention to Key-words combination: they will be the best SEO to boost traffics: the more key words are recorded, more exposures there will be.
Refined and targeted content can also lift the ranking and improve the user experience.
- Tool assistance:
Tool assistance from 1688.COM’s back office can facilitate Solostocks.1688.com promotion. It contains various functions to assist the system management, which provides a better performance in internal optimization.
Tools for managing product, KPI, finance, transaction and marketing would optimize the operation.
Here we explain you three detailed functions which we consider especially important:
By the way, there are a plenty other tools provided by 1688.COM that you can find. You just need to discover them all and find the one which better suits you!
- Secondary platform:
The secondary platform of 1688.COM is called baike.1688.com. It is professional and dedicated to provide customers the solutions and commercial knowledge in business by means of questions and answers to solve business problems.
In this business platform, users can get connections and share their experiences. Do not forget to:
– Use proper key words to find out the related questions
– Answer professionally to promote Solostocks.1688.com
– Enhance the account activity and develop the business
- Paid service:
Paid service in 1688.COM can effectively promote the brand and product in bidding ranking.
The most popular ways of SEM in 1688.COM are WXB (pay-per-click) and Diamond Booth (slideshow on the homepage). Both of them strongly facilitate the brand and product promotion in direct way.
Actually, 1688.COM provides various means for sellers to promote its sales. Here we summarize some main tips to implement the internal optimization in a comprehensive way to obtain the best results!
- Information sufficiency
Make sure the sufficient and high quality information can be provided to browsers.
- Effective transmission
Transfer the product or brand information in all directions to browsers accurately and immediately.
- Qualified images
High definition pictures can highlight the brand quality also beatify the online shop.
- Customer service
Keep the effective communication and CRM during the whole sales process.
- Ranking optimization
Paid service can provide the better performance in brand exposure by bidding ranking.
If you are interesting in doing B2B in China through a more native approach, 1688.COM would be the most effective and direct way to help you face to the Chinese customers.
Still interested?
Keep checking our blog and contact us if you have any questions. 2 OPEN will happily assist you!
This article was edited by Paula Vicuña.
How to Sell on Wechat?
Interested on learning how to sell on Wechat? Keep reading!
On 20 April 2015, China Press and Publication Academy launched their first report based on Wechat platform. With over 600 million potential customers, the Report showed the great potential Wechat has for Brands to reach new audiences in Chinese market.
WeChat is one of the most important Social Media platforms in China. Set out as a communication tool, its newest strategy has been launching the most successful mobile eCommerce platform nowadays.
For foreign companies willing to sell in China, take advantage of the benefits of using Wechat gives them the chance to enjoy its simple access to products by an easy way to pay, and also get advanced information of their customers. Its latest movements have become the app in a crucial tool to increase the consumer communication with brands and users engagement.
In order to continue adding value to our customers and launch a profitable business in China, we encourage you to go deeper on Wechat to take advantage of every opportunity that pops up in China environment.
What are the specific requirements to introduce a company on Wechat?
First, Create your Wechat Official Account:
Due to legal regulations, bear in mind that only Registered Companies in China are allowed to create their own Brand pages. Do not forget that in 2 OPEN we are authorized to apply for it!
Some are the steps you should be aware to create the account
- Fill the basic information to feature your products and services. After receiving an Email activation, configure your account.
- Choose the most suitable account type from the two options provide for the public interaction, specified in the list below:
Sell on Wechat
- Once you are successfully registered, Wechat gives your company the chance to get more benefits and some interesting advantages to add value to your shop, like:
- Exclusive identifier
- Practical port
- Customized menu
- Account authenticity and security
Sell on Wechat
Second, Third platform registration:
Although Wechat has its own shop, set one up via a third party platform can provide many interesting features, like:
- It is free and easy to add new items
- Gives the One-click sharing
- Contributes to faster transactions and better security on them
- Download a Mobile Ecommerce platform app according to your demands: To illustrate the post and due to the great importance of Weidan in China (微店), we will focus on it. Baked by Tencent, Weidan is based on social relationships with no centralized entry-point. It gives you the chance to post your products information across a wide variety of Social Media platforms with an ultra-streamlined registration and administration processes which make it easier to sell your services and products.
- You can create a new account or logo in your Wechat official account.
- Input your phone number to bond with the account, and the app will send a code to your phone to pass the SMS verification.
- Use the red-button to fully use the app
- Bind with your Bank-card to paying and collecting operations
- To set up your products, click on “My Products” and upload your product.
- Add pictures and fill the description, price and requirements of your products or services.
Third, Link Weidian with your Wechat Official Account:
From the back office, go to Customize Menu to edit the content in structure.
Sell on Wechat
Fourth, The final presentation to your Wechat account:
- Click the Bottom Menu (only in case you enjoy a verified account!)
Sell on Wechat
- To get into the shop, you do reply the message. In latest version, when users enter the official account, an automatic message will present the options to follow the instruction to transfer into the Shop page.
And…done!
From the team we hope these tips will help you to understand further the latest trends in Chinese market.
At 2 Open we have the experience and knowledge to develop your business in China and become your guide to launch your business in Asia.
Still speculating about how to grow your business in China?
Get in touch with us!
This article was edited by Paula Vicuña from 2 Open.
How to Sell B2B Online in China
Last week we were in an event in Valencia organized by our partner, the Valencia Chamber of Commerce, in which we shared our knowledge about the B2B online business development in China in front of a full auditorium.
We were glad to share the “stage” with 2 of our best clients:
– Amvos Consulting: leading digital marketing agency in Europe and South America
– SoloStocks: best B2B online platform in Spain currently present in over 12 countries in Europe and South America
And that is what we talked about:
– WHICH ARE THE MAIN ONLINE B2B PLATFORMS IN CHINA?
As we can see in the top image chart, the clear winner in the B2B Chinese market is Alibaba with its domestic platform 1688.com which absorbs 37.78% of the market share as per April 2016, followed far behind by Global Sources (5.45%), HC360 (3.92%), Made-in-China (2.23%) and DHGate (1.77%).
– Alibaba.com/1688.com: Alibaba.com is the leading platform for cross-border wholesale trade, serving millions of buyers and suppliers around the globe and 1688.com is the main B2B marketplace for domestic China trade among small and medium enterprises.
– Global Sources: It is a leading B2B media company and a primary facilitator of trade with Greater China. More than 1 million international buyers, including 95 of the world’s top 100 retailers, use these services to obtain product and company information to help them source more profitably from overseas supply markets and generate sales leads and win orders from buyers in more than 240 countries and territories.
– HC360: is the third most important domestic B2B e-commerce operator in the People’s Republic of China. With its professional information services and advanced internet technologies, it has established a reliable demand and supply platform for SMEs, and has been providing them with complete business solutions over the past 22 year.
– Made-in-China: was developed and is operated by Focus Technology Co., Ltd. Focus Technology, is a world leading B2B portal, specializing in bridging the gap between global buyers and quality Chinese suppliers.
Since China’s policy of reform and economic openness, the B2B traditional model unlocked unprecedented levels of growth and development. With the Internet booming and the transition of trade models taking place, most industries have enrolled in the online B2B revolution to develop their brand. For this reason, hundreds and hundreds of new B2B platforms are born trying to differentiate from each other and creating that way an unparalleled war. And we see new attempts to get to the top of this pyramid, day in and day out, as they all want to get a piece of the huge cake.
– BUT, WITH SO MANY OPTIONS… HOW CAN I CHOOSE THE RIGHT PLATFORM?
We list for you the key factors that should be taken into account in order to select the best platform for your brand to sell your products in a business-to-business model in China:
– Establishments costs: Lower implementation costs through simple installation and integration and unproblematic expansion options. The vast majority of wholesale online trading platforms in China are “free” to use. You can create your own shop and list your products. That way you have your own B2B storefront in China; but how will your products get noticed within the others? All these places provide different visibility packages. Call it gold member, golden supplier or whatever other name you can imagine; the important thing here is to compare these packages and what is exactly what they offer.
– Volume: What is the number of suppliers and competitors? What is the traffic volume generated in the platform? In this area, 1688.com is the clear winner from both sides. Anyway, there are also other vertical platforms that might be worth checking.
– Chinese partner: In order to create a shop and list your products in any Chinese domestic B2B platform, you will need to go hand in hand with a Chinese partner as you cannot use your foreign business licence to sell products within greater China. Here it appears the classic dilemma: Chinese partners are usually very opaque and don’t like to share any kind of information. 2 Open, as a Chinese and Spanish company, can be the right Chinese partner with modern European-style management and creates a totally transparent relationship with its customers. We want to succeed with you and not the other way around.
– Promotional tools: It is important to analyze which actions can be done in order to get more traffic to your shop. The most of them offer performance marketing actions in a CPC or CPM model, both for keyword optimization and display actions. The prices are usually high and a study should be done to assure that the ROI is the right one.
1688.com Homepage
In 2 Open, we usually recommend to do a market research that can lead us to take the best informed decisions: channel/s, range of prices, target audience, marketing budget and promotional efforts, potential return of investment, etc.
In another post we will show you how to optimize traffic within 1688.com to obtain more leads, so keep checking our blog and contact us if you have any questions. 2 Open can help you succeed in the Chinese B2B online world!
Do other e-commerce platforms stand a chance against Tmall?
All of us are very well aware of the magnitude of the Chinese online market and, although it is currently the largest e-commerce market in the world, most of the market share is owned by the Chinese e-commerce giant Alibaba. Nevertheless, there are some other companies that also want their piece of the pie and with their vertical e-commerce platforms they are starting to put up a fight. This article will focus mainly on those vertical platforms that constitute an important part of the diverse Chinese e-commerce environment.
In the 4th quarter of 2015 China’s online transactions surpassed 644.38 billion RMB, the pie chart shown bellow contains the market share of the top ten Chinese e-commerce platforms:
Before we continue, we first have to clarify the concept of vertical e-commerce. In this context, vertical refers vendors that offer goods and/or services that are specific to an industry or customers with specific needs. A vertical e-commerce platforms could be a independent brand or a specified category within a wide range of products such as clothes, 3C (computer, communication, and consumer electronics) products, cosmetics, etc.
If you already have a basic understanding of the Chinese e-commerce market, then you are probably familiar with JD.com. Currently the second e-commerce platforms in China after Tmall (owned by Alibaba Group), JD.com started as a 3C products vertical B2C website. Now, let us take a look at the market share of 3C products in China B2C online market:
Although Tmall is still on the first spot, the difference in market share of JD.com is considerably higher than with regular products. Tmall and JD.com combined own more than 80% of the Chinese 3C products market. Suning, on the 3rd spot, and Gome, on the 4th, both also started specializing in 3C products, however, nowadays they have also diversified their range of products. At the end, it seems that there are no actual vertical platforms anymore.
To study the online market, we cannot miss the biggest category, clothes. In the 4th quarter of 2015, the total transaction of clothes is 235.57 billion Yuan, market share is shown below:
In this case, Tmall is leading with an absolute advantage of almost 3/4 of the market share. In this category, JD has 8.7% of the market share, VIP.com has 6%, and surprisingly others do not even have 1% individually, so from the big picture the vertical market for clothes is not active enough.
Another category that has had such a rapid growth we cannot ignore is the maternal and children products. Shown below is a pie chart containing China’s maternal and children products market share figures of major competitors in the last quarter of 2015:
The most noticeable difference in comparison with other categories is the porcentage own by other platforms that adds up to almost 20 %. Although Mia, Beibei, Babytree and others are in that 20% it is still a big figure. In this category Tmall and JD.com own less than 70 % of the Chinese clothing market, so we can say, to some extend, that there is still space for vertical players.
The next category is books and, even though the books total transaction was just 5.31 billion Yuan, the market share gives us a slice hope of competing with general platforms, in this case Dangdang is leading with 43.8%, and Tmall is only on the 3rd spot, just after JD.com.
Finally, we cannot say all vertical online platforms are dead in China just because most of the categories are gloomy, there are still some worth a try, and you just need to know enough about the current situation. If you don’t, luckily you saw this article, and you know 2open can always help you to find the right channels. So don’t hesitate, contact us now!
All in all, even though Tmall dominates in the Chinese market, there is still space for other platforms to flourish. Vertical e-commerce platforms seem to be the wisest option, specify in a certain category, gather information about the current situation in the Chinese market, and carry out your business plan. If you need further information about the market, would like to help you find the right channels, or want us to set up your business in China, do not hesitate in contacting us. Our group of specialists will happily assist you.
This article was edited by Andres Arroyo Olson from 2 Open.
References.
All products data from
http://www.analysys.cn/yjgd/17684.shtml
3C data from
http://www.analysys.cn/yjgd/17676.shtml
Clothes data from
http://www.analysys.cn/yjgd/17678.shtml
Children products data from：
http://www.analysys.cn/yjgd/17680.shtml
Books data from:
Insights on ZARA in the Chinese digital market
Since first arriving to Shanghai in 2006, ZARA has had incredible achievements in the volatile Chinese fashion industry. Etam and Ochirly used to be considered as the “King and Queen” in this sector with the vast majority of the market share, however ZARA’s arrival crashed down this obsolete structure. In 2014, ZARA reached the top fashion brands in China, earning twice the revenue of Etam.
-Zara’s first Chinese store at Nanjing West Street in Shanghai.
In the same year, ZARA opened its official flagship store on T-mall. This is not the first step ZARA takes towards the Chinese digital market, in 2012, ZARA set up its own online shopping website “The ZARA China” and also published an m-shop application“ZARA”.
-ZARA China carries on with clear style.
-ZARA’s mobile application for IOS.
Despite all of this, the big brand’s official website is often tasteless, sort of similar to the one from Dell. Dell’s official Chinese website actually used to be the largest e-commerce platform, however, nowadays it has become a more passive marketplace. Apple is also a good example to illustrate this, its official e-shop is beautifully decorated, nevertheless, Chinese users rarely to buy any products on it.
The main reason for this is because e-commerce not only involves the build up of a simple website. It requires collaboration throughout the supply chain, especially the logistics, and of course, the follow-up services.
For many international brands, including ZARA, the option of building up the infrastructure to cover the broad Chinese market is perhaps not as profitable. Thus, it is essential, and more appealing, to cooperate with the third-party platform like T-mall.
-The frontpage of ZARA on T-mall
Why did ZARA choose T-mall?
Many people thought the main reason was that ZARA wanted to catch up with the “11.11” festival on T-mall, which is the Chinese version of Black Friday. However, based on the opinions of many insiders, the market and the decrease on revenue in 2013 forced ZARA to set a foot on e-commerce.
-In 2013, its growth rate of net profit was less than 1%, which was its worst performance in the past five years.
-For the first quarter of 2014, its revenue increased by 4.3%, but net profit fell -7.3%. In contrast, in the past three years, it has maintained double-digit growth in net profit. When the results were published, Citigroup cut its TSP down from 130 to 120 euros.
-In May 2014, the monthly sales reached 60 million yuan, and consequently in June, the headquarter announced the plan to cooperate with T-mall, saying the shop would officially be settled soon.
-As for 2015, the growth rate on revenue increased 20%, and the market performed positively.
We can safely determine now the main reasons why a big company like ZARA entered the Chinese e-commerce scene. They can be summarized as the following:
- E-commerce is a leading trend of buying behaviour in China and the amount of people buying things online is rapidly increasing.
- This is a good way to promote ZARA itself on second and third tier cities, as it seldom makes advertisements.
- The Chinese e-commerce contributes to the highest growing rate of GDP in the world.
- The business model of T-mall and its fellow platforms just fits the needs of ZARA – Small amount but multiplicity.
All in all, e-commerce seems to be the way to go in China and who else to help you than 2 Open. Our goal is to understand our clients business needs in order to provide the best possible services. If you have any questions or require any information about our services, please do not hesitate in contacting us, our group of specialists will happily assist you.
This article was edited by Andres Arroyo Olson from 2 Open.