China logged a total of 782 million e-commerce online shoppers in 2020. Interestingly, this has led industry experts to forecast that this year, more than half of the country’s retail sales will come from e-commerce, up from 44.8% the previous year. That means that for the first time anywhere, a majority of retail sales for an entire country will transact online — a historic feat that China could accomplish this year.
This makes sense, considering as of January 2021 alone, China had 939.8 million internet users. Even before the pandemic, Chinese users were already adept at using the Internet to access various types of commodities which was also driven by the proliferation of mobile apps. But you might be wondering, what is it about China’s digital ecosystem that makes it such a hotbed for ecommerce.
1. Live stream shopping is second nature in China
Even before the pandemic happened, live streaming had evolved into a platform that sold various products across China’s many regions. It has become even more popular due to various local celebrities using live streaming platforms such as Taobao, Kuaishou, and Huajiao. Recently, the rise of Douyin (which is known as TikTok outside China) has also paved the way for this boom.
In line with these, influencers and celebrities (known in China as key opinion leaders [KOL]) are being directly contacted by manufacturers to market their products and services. In China, they typically receive an appearance fee plus a commission on products sold. Because of this, live streaming has evolved much further and is now moving beyond special shows controlled by a small group of celebrity influencers. Other platforms are now helping smaller homegrown live streamers to set up their own communities and grow from there. Live streaming shows have allowed everyday people to become overnight celebrities and even get signed by talent agencies to stream professionally.
2. There’s nothing wrong with the hard sell
Direct selling is acceptable in Chinese culture. In the West, sponsored content can be seen with skepticism among customers. Most sellers are required by law to be upfront about sponsored content or content that has been paid for by an advertiser. Meanwhile, in China, direct selling from an influencer to customers is an acceptable selling strategy. People take this to mean that the product must be of good quality because an influencer or celebrity has put their reputation at stake to sell the product.
Chinese customers are aware that partnerships are at the backbone of business transactions. So they would typically place more importance on who’s advertising a product and connecting that with the product itself rather than the fact that the product’s brand is paying the influencer to introduce it.
3. Busy, crowded website interfaces are the norm
Typical Chinese e-commerce sites are a smorgasbord of information and advertisements, and locals don’t mind that kind of layout. There’s no sleek minimalism that you see in popular Western websites. Overall, these websites try to embody the “one-stop-shop” principle. By having product images, prices, comparisons, advertisements, all available at a glance, it gives off the impression that customers can quickly find what they’re looking for here.
Another objective reason is the Chinese language itself. Chinese characters are denser and do not have more spaces in between as it is with the English alphabet. There are also no uppercase and lowercase letters in the Chinese language, so there’s no variety in size when looking at the text. So when the text is put together, they appear to be taking up too much space within a page.
Finally, Chinese websites tend to have many links and images, and animation to their copies. There are a few theories as to why their websites are composed of many links, but the most interesting seems to be that it helps hasten loading times since some regions in China may have slower internet speeds. By incorporating links, related pages can be easily opened as another window. In addition to these, animations and other graphics are attention-grabbers, so they are deemed as necessary by brands.
4. Group buying has become a powerful purchasing method
Group buying has become a method for Chinese consumers in which their unity in buying increases their bargaining power. Merchants can offer discounts for group purchases below retail prices. This model is pretty much acceptable to merchants because when it comes to acquiring customers, groups of buyers are organically formed. The community group buying model has high conversion as well as retention and the channels for acquiring traffic are more diversified. One of the best examples to showcase group buying is ecommerce giant Pinduoduo, whose rise is reflected at its soaring stock price.
In effect, this buying strategy has spurned platforms that actually help communities enable group buying. Shopping platforms are even targeting people based on their tier-city level, and certain age groups especially among females.
5. A seamless shopping experience is a must
When shopping online, everything is literally at the consumer’s fingertips — from product awareness to adding cart items until the actual purchase. Chinese ecommerce sites are also carefully strategized to enable this process. While the sites may appear busy to western viewers, customers find it very easy to get to the items they want to buy coupled with various discounts and promos. There are also multiple online payment options available for users in China to make the consumer experience more seamless, such as WeChat Pay, AliPay, etc.
The best example of this would be the WeChat app. It doesn’t simply provide a messaging feature but it's also a marketplace and a social media site all rolled into one. Users may initially be having a conversation with their friends or browsing through social media updates when they find something that interests them. And sales are closed by the app’s own payment platform.
So now you know Chinese customers a bit better and their unique market landscape. Time to put theory into practice. Test how consumers in China interact with your ecommerce website and optimize your pages to their expectations. Contact us if you want to test your website in China with real users or learn more about how to open your own ecommerce site in China.