China is the fastest growing e-commerce market in the world and there is no sign that this will change. E-commerce in China is constantly being improved for both consumers and sellers. Internet giants, using the latest technologies, have created the best e-commerce platforms in China. Thanks to their efforts, sales platforms, i.e. marketplaces, are constantly developed with new functionalities and innovative business models. All this to simplify the buying and selling process, increasing profits for companies and making shopping more pleasant for consumers. Therefore, China is a great material to follow ecommerce trends!
– The leaders of the ecommerce industry in China include Taobao, WeChat and JD.com.
– Ecommerce trends are currently mainly cooperation with influencers, live shopping and selection of products after scans or photos.
– Digital wallets and group purchases are also gaining popularity.
E-commerce leaders in China and their key tools
In recent years, many solutions in the e-commerce world have been refined to adapt to the demanding and changing needs of consumers. Chinese online commerce relies heavily on marketplaces and social media shopping, and the leaders of e-commerce are Alibaba, JD.com and WeChat. Let’s take a look at one of the most popular Chinese e-commerce sites and learn about the solutions they propose.
E-commerce leaders in China:
Alibaba and Taobao Group
The Alibaba group dominates the Chinese e-commerce market. It consists of two of the most famous platforms – Alibaba.com and Aliexpress. Their popularity is due to the fact that they sell abroad. Alibaba operates in the B2B model and Aliexpress B2C.
The other services included in the group are platforms targeted at Chinese users. One of them is Taobao.com – the largest Chinese online store, operating on the basis of C2C. This platform allows small businesses and entrepreneurs to display and sell a wide range of products, from toys and clothing to electronics and cars. Launched in 2003, the site operates on a similar basis to American eBay. Goods can be sold at a fixed or negotiated price or at auction.
There are several tools on the Taobao platform designed to help brands reach more consumers and aid marketing efforts. All these tools have different functions, but one goal – to facilitate the sales process:
Image search: The option available on Taobao allows you to quickly search for a product based on its image. All you need to do is upload a photo and the portal will search for graphically similar articles.
Weitao – Social Media Integration: A social platform built into Taobao that serves better communication between sellers and consumers. Brands and influencers use Weitao to publish content, engage consumers, and consequently to acquire customers and increase sales. Consumers, on the other hand, use Weitao to stay up to date on news, read product reviews and connect with brands.
With this option, consumers, when they see something they like, can go directly from viewing the product to shopping. This eliminates any additional steps that could distract the potential customer from completing the transaction.
Taobao Live – Live Dealer Streaming: E-commerce live streaming is a selling method where streamers introduce products and viewers can make purchases in real time. The possibility of more dynamic, interactive sales based on real-time feedback is of great interest to consumers, and in recent months has broken records of popularity among sellers. Brands and companies that have suffered from pandemic restrictions are increasingly choosing Taobao Live to resume operations and reach as many audiences as possible.
WeChat is Tencent’s multi-functional social media, messaging, payment, and shopping application. It is the Chinese equivalent of Facebook, Instagram, Twitter, WhatsApp and many more. Everything in one place.
The e-commerce option was introduced to the application, which was initially intended as a messenger. Thanks to the introduction of the WeChat Store and WeChat Pay functionality, it has become a trading platform. Wechat Pay allows you to make online and offline payments using QR codes. What’s more, the functionalities of the application are constantly developed thanks to mini-programs.
Mini-programs are smaller applications inside one application. Below are the possibilities they provide:
Scan-and-go purchases: Shoppers can use a mini-program to scan products and make payments without waiting in line. There is also a possibility of home delivery.
Multi-Channel Selling: The Uniqlo mini-program allows buyers to place an order online and ship their purchases to the store. The goods are ready for collection within an hour.
Group purchases: Companies offer discounts to the entire group when there is a certain number of people willing to shop. It works like this: a community leader promotes the product at a discounted price in his network to the WeChat group. If enough people make a purchase, each buyer will get the product at a discounted price.
Sales with influencers: Influencers, also known as key opinion leaders, promote products on their profiles and lead buyers directly to a specific product page. The entire purchase – sale transaction takes place inside the application. Influencers have various tools at their disposal to create promotional content as part of WeChat KOL:
– WeChat Article – an option with which you can create content that includes text, photos, videos,
– WeChat Channel – a video channel for content creators, brands, companies and individuals to reach audiences beyond their circle of friends / followers,
– WeChat Live streaming – tools to easily implement live broadcasts.
Self-service stores: An unmanned brick-and-mortar store owner uses WeChat to allow buyers to enter the store, exit their purchases, and receive a bill through their WeChat account. The EasyGo mini-program provides a QR code that shoppers scan to enter the store. Payment is made via WeChat Pay.
JD.com is the second largest e-commerce platform in China. It offers millions of different products that fall into categories such as cosmetics, fresh food, clothing and electronics. JD.com allows retailers to open virtual storefronts, but unlike Taobao.com, JD.com has its own warehouses and can be sold directly to end customers. Thus, JD.com works more like a traditional online store, similar to Amazon. JD uses three basic models:
JD.com Direct Sales: JD fulfills orders and is responsible for issues such as international logistics, customs, warehousing, product page design, marketing and after-sales services.
JD.com Marketpalce: Seller completes orders. He deals with customer service, marketing, and generally – sales. However, it can use JD.com’s international logistics services, i.e. it does not have to deal with customs issues, warehousing and delivery to customers.
Worldwide Sales: JD Worldwide is a cross-border ecommerce platform. It offers international traders the opportunity to enter the Chinese market by providing shipping and warehousing solutions. JD Worldwide is open to brands, retailers who are legally registered outside of China and sell products sourced from outside of China.
E-commerce trends in the Chinese market
When it comes to innovation in the e-commerce world, China is definitely the trendsetter. Over the years, e-commerce in China has evolved a lot in response to the needs of customers and sellers. The above-described solutions and functionalities are a response to ecommerce trends, although it is difficult to say unequivocally whether they were always the result or maybe the cause. Here is a list of the ecommerce trends we are seeing in China.
To increase brand sales, companies engage influencers, i.e. key opinion leaders (KOL). These are paid collaborations aimed at promoting a given product. KOL is an expert whose opinion is valued in a specific industry. These are people who are trusted and respected in a given environment, have authority through long-term building relationships with recipients. When choosing a KOL to cooperate with a given brand, whether the product fits the content created and promoted by a given author. Everything depends on the product they want to sell. KOLs can be models, movie stars, singers, fashion icons, etc. Not every famous personage or celebrity can be a KOL.
Due to the fact that Chinese e-commerce responds quickly to changing consumer preferences, another type of influencer is more and more often used to build brand awareness and increase interest in the product, namely KOC (key opinion consumer). It is a customer who has reached for a given product himself and shares his honest opinion about it. Chinese internet users are more and more often influenced by the choices of ordinary users, trusting that their reviews have not been paid for.
In a culture so heavily involved in mobile, the great interest in digital electronic payment does not come as a surprise. Such a solution is offered, for example, by Tencent (WeChat Pay) and the Alibaba group (Alipay). Digital wallets are a complete payment method that makes it very easy to pay using your smartphone. You can pay on the website, in the application, as well as in a stationary store. Users keep funds in their mobile digital wallets. Based on these funds, a QR code is generated, which you can pay by scanning it in stores. This trend has integrated online systems with everyday offline shopping.
Trade in the cross-border model
Cross-border online commerce is a relatively new type of sales channel that was introduced to make it easier for foreign brands to enter the Chinese market. In the cross-border model, goods are sold online on platforms intended for foreign companies (e.g. the already mentioned JD Worldwide). Listing your products on such a platform is the fastest way to test the prognosis of a given product on the Chinese market. The fact that you can sell the products directly to the final consumer is also a big advantage. Sellers and consumers making transactions in this model can count on special conditions when it comes to customs, sanitary issues and the necessary certificates.
Shopping via social media (social e-commerce)
The country’s largest e-commerce platforms are heavily integrated with the most popular social networks, offering innovative services such as mini-programs and live trading.
Social e-commerce is a response to an overly saturated market, increased competition and rising costs of acquiring consumers. Undoubtedly, the rise of a new class of consumers – affluent, discerning and mobile millennials – helped accelerate the e-commerce revolution. Since this demographic dislikes traditional advertising, marketers had to come up with alternative ways to engage and build strong relationships with their customers. Millennials are educated and innovative young people who like to be pampered. Due to the need for entertainment and immediate satisfaction, they choose social media shopping.
Innovative technologies have also improved the overall shopping experience, making the process more convenient, positive and fast. Hence the popularity of live streaming, cooperation with KOLs, group purchases or flash sales (sales consisting of a short-term discount on a given product).
Integration of online and offline channels
Customers add offline products to their online wish list, compare products online, then watch them live, make final purchasing decisions in front of a desktop computer, pick up online orders in stationary, scan QR codes in stores, use self-service checkouts. Based on these consumer behaviors, we see online and offline channels becoming increasingly integrated, creating new hybrid purchasing models. The O2O trend has been present in Chinese for several years and continues to grow in strength.
The term O2O (Online-to-Offline) basically refers to anything in the online world that attracts customers to physical stores or makes them buy products and services that have traditionally been sold offline. While e-commerce in China has huge benefits, O2O companies can still compete by focusing on reaching the right consumers who are willing to go to the store to test the product or save delivery time when purchasing the product.
QR codes play an important role in integrating online and offline channels, which, in addition to being a payment method, can be easily shared online or printed on marketing materials such as posters, packaging, banners, and then scanned with any smartphone . QR codes may link to websites, social media accounts or any other suitable online channel.