Understanding the Chinese consumer and strategies for international retailers to succeed in China’s booming online shopping market.
ABOUT THIS RESEARCH REPORT
China is now the world’s largest online shopping market. Driven by rising levels of personal wealth and high Internet connectivity, Chinese consumers are on track to spend over US$1 trillion online in 2018. A notable trend is the strong preference of many Chinese online shoppers to buy from overseas brands and retailers through cross-border online shopping – known as haitao or CBEC (cross-border E-commerce). Simply, it involves a Chinese consumer placing an order online with an overseasbased online retailer, who ships the product from outside the Chinese.
Typically, overseas brands and retailers have sold cross-border into China through online marketplaces offered by China’s E-commerce giants, such as Alibaba and JD.com. While this is the best-known model, there is no “one size fits all” approach for brands and retailers. Increasingly, Chinese cross-border shoppers are looking beyond marketplaces, and are shopping on retailer or brand owner standalone direct-to-consumer (D2C) online stores, which offer them a greater level of personal engagement and a more authentic online shopping experience.
The complexities and challenges involved in selling into China mean the “one size fits all” approach is no longer appropriate to meet market demands. As a result, individual retailers and brand owners need to carefully determine which model is likely to work best for them.
In this white paper, we review how online shopping in China is evolving, and the attitudes of brands and retailers selling online into China. We analyse the alternative cross-border sales models available to brands and retailers, and indicate how the use of a marketplace may not always be the best solution for international companies in engaging with Chinese online buyers.
We undertook research with a sample of 1,000 individuals in China who regularly shop online cross-border (the Consumer Survey), as well as interviewing 100 international brand owners and retailers with revenue over 50 million USD per year, in Australia, New Zealand, the US, Canada, and the European Union (the Retailer Survey) to understand their strategies, expectations and experiences of online sales into China.
Respondents were drawn from a range of categories, including mum and baby, beauty, cosmetics and personal care, health and wellness, food and grocery, and fashion. The Appendix provides further details of the study samples.
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