E-Commerce in China
Selling online to China: a guide for Australian businesses
China is the largest e-commerce market in the world and is larger than Europe and the United States’ ecommerce markets combined. (Source: J.P. Morgan (2020), 2020 E-commerce Payments Trends Report: China, accessed 15 Jun 2020)
Shopping online is a part of daily life for millions of Chinese consumers who are actively seeking out new products to try.
- Cross-border e-commerce –you don’t need to establish a legal entity in China
- Livestreaming for e-commerce – millions of shoppers buy during livestreams
- Mobile device use is on the rise – most shoppers use their phones for online purchases
- New categories a such as alcohol, fast moving consumer goods and fashion are entering the e-commerce market
Tips from our specialists
Understand your customers
Personalised customer service is an important part of e-commerce in China. Chinese customers often contact sellers to ask questions before making a purchase decision. As a result, one-on-one conversations using chat boxes between the buyer and the brand’s customer service are common.
Response time and quality are important. Customers will rate the store after purchase. Poor ratings can damage the reputation of a brand. This makes customer service a critical aspect of success.
Think beyond the established markets
The number of households with an annual disposable income of between A$28,000 – 60,000 in tier 3 and 4 cities have grown 38% from 2010 to 2018 (compound annual growth rate). (Source: McKinsey & Company (2019), China Consumer Investigation Report 2020, accessed 16 Jun— Chinese language only)
Cities that are on the edge of becoming tier 1 and 2 include: Chengdu, Hangzhou and Chongqing. These have begun to be viewed as ‘new tier 1 cities’.
Young consumers living in lower-tier cities generally have lower living costs and a higher willingness to spend on consumer goods. Brands are reaching further into lower-tier cities where physical stores are not located. New e-commerce and logistics infrastructure has helped this transition.
The merging of social media and commerce accelerated when the pandemic forced shoppers to stay home.
Livestreaming allows brands to create a closer connection with their consumers. In-app purchases are now possible generating immediate sales. There are now in excess of 617 million livestreaming fans in China. Almost 400 million have purchased goods during livestreaming sessions. (Cyberspace Administration of China (2021), Statistical Report on the Status of China’s Internet Development (Feb 2021), accessed 16 Jun — Chinese language only)
Livestreaming presents a strong opportunity for Australian brands in:
- health supplements
- food and beverages
- digital games and entertainment
- beauty and skincare.
Register your intellectual property
China is a ‘first to file’ jurisdiction for intellectual property (IP). You should register your IP to protect your brands and designs as early as possible.
A trade mark registration protects your brand and will generally cost around A$800-$1,500 per class. You should also be aware of Chinese versions of your brand and other relevant Chinese language IP which may require similar registration.
Information and guides on China’s IP system can be found on IP Australia’s website.
Regulations on imports
China’s e-commerce regulations continually change to keep pace with the rapidly evolving market. Key areas to stay across are:
- product registration
- service providers for online store operation
- marketing tools and agencies.
China’s e-commerce calendar
You need to plan well to get the most out of China’s e-commerce events. Preparations for sales events begin several months ahead.
China’s e-commerce calendar is dominated by ‘shopping holidays’.
The two biggest days are:
- 18 June known as ‘6.18’
- 11 November known as ‘Single’s Day’ or ‘11.11’.
At Singles Day 2020:
- Alibaba’s TMALL platform had over A$100 billion in sales
- Australia was the fourth-most popular source country for imported goods sold
- 360 new brands reached first place in their sub-categories. This was up from the 11 brands during TMALL’s 2019 Singles Day. (Source: CBNData(2021), 2020 Brand Review (Jan 2021), accessed 16 Jun — Chinese language only)
||Size of sale
||All platforms (created by Tmall)
||A$104 billion (Tmall 2020)
(created by JD.com)
|A$56 billion (JD.com 2020)
|Chinese New Year
||January or February
||A$188.7 billion (all online platforms 2021)
|International Women’s Day
|Chinese Valentine’s Day
You can find the latest news and trends in our China e-commerce insights:
How Austrade can help
Our specialists in China can help you with advice on:
- e-commerce market entry models
- how Chinese e-commerce is different from the rest of the world
- e-commerce operations in China
- the various business models in Chinese e-commerce
Contact us online or phone 13 28 78