The market is also far from mature with online shopping continuing to rise significantly. 49% of the Chinese population made at least one online purchase in 2013 - the global average is 40%, this is set to rise by 71% by 2017. On Singles' Day 2014 (a day traditionally used to celebrate being single which was adopted by Alibaba in 2009 as an online shopping sale) sales in excess of $9 billion were reported. This further illustrates the buying power as well as the appetite of the Chinese consumer.
Due to product safety incidents and less than stringent government supervision, Chinese consumers have strayed away from domestic products and actively seek out foreign brands.
The growth figures combined with the fact Chinese consumers are hungry for Western brand quality and status, highlights the significant opportunities which exist there.
However, such opportunities rarely come without their challenges and China is no different. Not only are the sales opportunity huge, as is the geographical size. Covering an area twice the size of Western Europe how retailers actually 'deliver' to Chinese consumers is a mammoth consideration.
In addition China has very specific requirements, traditionally businesses have required a Chinese business license in order to trade and a local warehouse to fulfil the orders. And whilst there is significant appetite for Western brands localisation is vital. Consideration also needs to be given to developing a local language website, which has 'assisted sales' support integrated within it.
Tmall an online shopping platform, is the most accessible point of entry for retailers into China. A bit like eBay on steroids Tmall represents over 90 per cent of the marketplace market share housing over 70,000 international brands in 50,000 stores. Every minute on Tmall there are over 48,000 transactions.
"Alibaba has seen transactions on its e-commerce platforms top that of Amazon and eBay combined, its also expecting to overtake Walmart in 2016 as the world's biggest retail firm." Bain & Co Consulting
In order for online retailers to 'deliver' in China and take advantage of the significant opportunities that exist there, localisation and a thorough understanding of the market requirements and nuances is vital. Anyone thinking of embarking on such a venture without a well informed and well connected partner is likely to fail. wnDirect's wnOnline service helps retailers set up a Tmall store within a few months, and manages all customs clearance and fulfilment.
Those willing to work in partnership and take the time and effort to understand the market can look forward to a share of a market that was able to generate sales in excess of $9 billion in a single day (Singles' Day 2014).
wnOnline is a unique eCommerce offering which will enable retailers from the UK, Europe and the US to have an online presence in China.
- It enables retailers to be 'online' in a short lead time (60-90 days), with low risk and low cost.
- wnDirect will operate as your business partner acting as the Chinese legal entity, managing the Chinese CMS, providing Chinese customer services, managing the local country marketing campaigns and monitoring the inventory interface
Stuart Hill CEO of wnDirect said:
"We believe that wnOnline represents a very powerful solution that will enable more and more brands to access the Chinese market. There is no doubt it offers significant opportunity but the risks and the challenges retailers have to overcome have turned many retailers off. Retail brands can take advantage of our investment and research which means they can bring their products to a potential market of over 1.4bn consumers now for relatively little investment. We believe this is going to have quite an impact with retailers."