The Chinese market attracts thousands of enterprises and companies from around the world every day. It is one of the most promising markets in the world. China has a population of nearly 1.4 billion. The improvement of people’s living standards has boosted consumption growth and purchasing power. At the same time, the development of various new technology related industries and China’s digital process have greatly promoted the success of China’s most profitable industry: e-commerce.

Whether you are a small enterprise or a large company, you may be interested in developing e-commerce in China and learning about relevant solutions. Here we will introduce you to the basic knowledge of China’s e-commerce platform, and provide you with some tips and suggestions on how to successfully enter the Chinese market with foreign brands.

In 2021, Taobao still accounted for 52% of China’s retail e-commerce market, followed by jd.com and pinduoduo, with market shares of about 16% and 12%. The rest of the market is occupied by Tiktok, Kwai, etc. Among all types of marketing channels, the return on investment of digital marketing (in China) is still the highest, reaching 19%. Online advertising investment, together with online and offline advertising operations, will continue to have more impact on consumers.

However, China’s retail e-commerce market has gradually saturated, and China’s e-commerce platform has gradually improved

In 2021, Gmv of integrated e-commerce accounted for more than 80%, still occupying the first position. In recent years, live broadcast e-commerce has made great achievements with a strong growth momentum, ranking second, and Gmv accounts for 14%.

Since 2018, China’s live broadcast e-commerce industry has become a hot spot. In 2019, the strong traffic and liquidity of  KOLs further catalysed the rapid development of live broadcast e-commerce. The outbreak of the epidemic in 2020 stimulated the vitality of the live broadcast e-commerce industry. It is estimated that the scale of China’s live broadcast e-commerce market will further increase in 2022.

Since 2019, China’s online retail sales have continued to grow. Affected by the epidemic, online sales grew by more than 10% in 2021, and online retail sales exceeded 12trillion yuan. From January to April 2022, the online retail sales have reached 3.87 trillion yuan, a year-on-year increase of 3.3%.

After the emergence of the concept of “new retail”, it has always been a hot topic for manufacturers and retailers. This concept emphasizes the integration of online and offline retail elements, including products, services, etc. As China’s largest e-commerce platform, Alibaba has invested US $2.9 billion in China’s largest offline retail group. HEMA supermarket also began to develop offline.

After the epidemic swept the world in 2020, Guochao products gradually entered the market. In 2021, the sales volume of domestic brands of Tiktok e-commerce increased by 667% year-on-year, and domestic brands accounted for 80% of the brands with a turnover of more than 100 million yuan. People’s growing sense of national and ethnic identity has also increased their support for domestic brands and commodities, providing a good social environment for Guochao.  2022 will be the golden period for the rise and development of domestic products.

Consumer service and quality control management are the two pain points of social e-commerce, and they are also issues of great concern to consumers. At present, many e-commerce providers lack services, so they are unable to retain consumers and achieve sustainable development. In order to solve these problems, more social e-commerce market participants tend to establish professional consumer service teams and quality control management teams to enhance their competitiveness and improve consumer loyalty.

Since 2022, the increasingly complex and severe economic development environment in China has brought certain challenges to the production and operation of foreign-funded enterprises in China. Despite the complex situation at home and abroad, China’s safe and stable social and economic environment, good macroeconomic fundamentals, perfect industrial chain and supply chain system, and rapid development of industrial upgrading and domestic market scale have become the basic conditions for the long-term development of foreign enterprises in China.The following four points are for foreign enterprises entering the Chinese market.

The possession of ICP license is a top priority.

Before opening e-commerce business, enterprises must apply to relevant Chinese departments for ICP license. At present, according to relevant laws and regulations, pure foreign-funded enterprises are not allowed to apply for ICP license. If foreign-funded enterprises want to enter the e-commerce market, they can cooperate with domestic domestic enterprises.

Import and export rights are very important

The full name of import and export right refers to the right to independently operate import and export. Import and export right refers to the qualification of import and export enterprises to carry out import and export business. Applying for the import and export right requires a complicated approval process. After obtaining various certificates, it means that the company has the right to self operate import and export. Only enterprises with import and export rights can independently engage in import and export business according to law.

Network culture business license is indispensable

“Network culture business license” is the relevant qualification certificate that must be obtained for the operation of Internet cultural products and Internet cultural activities. Operational Internet cultural activities refer to the theme activities that aim to make profits, obtain rights and interests according to Internet customer charging standards or network technology, advertising, name sponsorship, etc., and display Internet cultural products and service items.

No slack in brand protection

Apply for a trademark before the enterprise does business to protect its own brand. Prevent others from maliciously using the brand for publicity, and avoid their own unconscious infringement. Enterprises can operate and protect intellectual property rights from the aspects of trademarks, copyrights, patents, etc.

1、 Fees for settling in the e-commerce platform

Most e-commerce platforms need to charge a certain entry fee or deposit, which ranges from several hundred yuan to more than 100000 yuan. For example, the entry fee of Taobao is from 1000 yuan, which varies greatly according to the charging standards of different industries. In addition, the seller also needs to pay advertising fees, data analysis software, etc. according to the needs of the seller. In addition, e-commerce platforms such as tmall, Alibaba, jd.com and vipshop also charge different fees. Sellers can choose the appropriate platform according to their products, and they are greedy for cheap or blindly follow the trend.

2、 Category of products sold by the seller

Small and medium-sized sellers can choose the appropriate platform according to the importance of the platform to their products. JD mainly focuses on electrical appliances, while xiaohongshu mainly focuses on cosmetics; Taobao is a market type store with a wide variety of individual sellers; Tmall covers everything and basically has everything. The merchants who have settled in tmall have a relatively high reputation and relatively guaranteed quality; Pinduoduo focuses on group buying, with uneven quality.

3、 Understand the promotion cost of the platform

In addition to the entry fee, if the seller wants to improve product sales, the platform promotion fee is also a big expense. At present, e-commerce platform transactions are very fierce. If you do not promote them, your store may be rarely visited. E-commerce platforms generally adopt the search bidding ranking method, because businesses do not know the bids of peer businesses. If the ranking of their stores drops, only by increasing the bidding will their ranking in the search engine be improved.

4、 Store reputation

No matter what business you do, reputation is a point that everyone values very much. Therefore, when choosing e-commerce platforms, sellers should choose platforms that value integrity. Even if we can get some customers in a short time through advertising, but the product quality or service can not keep up, we will not win loyal customers and it is difficult to maintain a good sales volume for a long time. Therefore, the seller must pay attention to its reputation and integrity.

5、 Positioning of platform

For sellers, they should choose e-commerce platforms with obvious differentiated positioning, and make more comparisons before settling in the platform. It is believed that under the trend of increasingly mature online shopping, settling in an e-commerce platform suitable for them will gain more business value.

There are many e-commerce platforms in China. Some are specific to certain industries, and some are more suitable for smaller or larger companies. So, how should enterprises choose the most suitable Chinese e-commerce platform for their industry?

Let’s take a look at some of the most popular e-commerce platforms in China and understand their characteristics.

JD.COM

Founded in 1998, jd.com is China’s largest enterprise to consumer online retailer and one of Alibaba’s largest competitors. It is a B2C online retailer, providing about 400000 new products, including mobile phones, home appliances, clothing, electronic products, books, etc. Jd.com is a self-supporting e-commerce enterprise in China. Its founder, liuqiangdong, serves as the chairman of the board of directors and CEO of jd.com group. It has JD mall, JD finance, JD smart, o2o and overseas business divisions. In 2013, it officially obtained the virtual operator license. In may2014, it was officially listed on the Nasdaq Stock Exchange. In july2015, JD was listed in the Nasdaq 100 index and the Nasdaq 100 average weighted index.

As of 2021, JD. Com has more than 470million active customers and is the second largest e-commerce platform in China. Jdcom’s initial business model was to buy and resell brands. Later, it evolved into a business registration and responsible for its own sales.

On August 3, 2017, the 2017 “top 100 Chinese Internet enterprises” list was released, and JD ranked fourth

In 2021, JD ranked 59th among the Fortune Global 500

Douyin E-commerce

The development trend of FMCG in 2021 continued to the beginning of 2022. Under the influence of the uncertainty caused by the epidemic, consumers became more cautious and price sensitive, and turbulence will become the new normal. E-commerce has become the only channel to maintain growth in 2021, and the growth rate has dropped to 15% from about 30% in previous years. E-commerce platforms are also gradually differentiated. Among them, the live e-commerce platforms represented by Tiktok and Kwai and pinduoduo are winning the favor of more and more consumers.

Tiktok e-commerce is committed to becoming the preferred platform for users to discover and obtain high-quality goods at high prices. Many Tiktok creators provide users with a more personalized, vivid and efficient consumption experience through short video / live broadcast and other rich content forms. At the same time, Tiktok e-commerce has actively introduced high-quality partners to provide multiple options for businesses to realize.

Compared with traditional e-commerce, the business model of Tiktok content e-commerce has different “user content commodity service” links. To fully tap the value of Tiktok platform, it is necessary to match the business logic of Tiktok content e-commerce. The core foundation of this new business model is: good content + good goods + good services.

Tmall

Tmall is a new B2C (business to consumer) created by Mayun on Taobao. It integrates thousands of brands and manufacturers to provide one-stop solutions for businesses and consumers. Tmall is also China’s e-commerce leader, occupying most of the market share.

Founded in 2008, tmall is subordinate to the famous Alibaba Group (a Chinese technology giant founded by Jack Ma). It is a subsidiary of Taobao, an e-commerce website, and the largest e-commerce platform in China. Due to the strict standards in terms of quality and popularity, tmall stands out from its competitors. In fact, tmall’s customer experience comes first.

Tmall can seize most of China’s e-commerce market share, become the most popular e-commerce platform in China, and become the best online portal for local and international retailers, because it increases the entire advertising ecosystem according to the wishes of merchants.

In short, tmall is a good online channel to reach Chinese customers because it enjoys their trust. However, due to the entry requirements and high costs, it is most suitable for high-end and niche international brands

Tmall B2D has implemented a new B2D strategy (business to developers) to solve the distribution problems in China. By gathering all the dealers, we can help them establish contact with the brand, directly connect the dealers with the brand, and avoid any intermediate contact. This solution is considered to be a new revolution in distribution in China.

TaoBao

Founded by Alibaba Group in may2003, Taobao is a large online retail and business district in the Asia Pacific region. Taobao is a consumer to consumer e-commerce platform that allows individuals, retailers and wholesalers to list freely and sell almost everything directly to buyers, from clothing to furniture, from beauty makeup to cars.

Taobao is one of the earliest e-commerce platforms in China, and is still one of the leaders in mobile device traffic. It has almost become a product search engine for Chinese consumers. Many innovations come from Taobao before being adopted by other platforms. For example, in 2014, Taobao took the lead in becoming China’s first e-commerce platform using the concept of social e-commerce through its integrated social media wechat

Taobao is a popular online shopping and retail platform in China, with nearly 500million registered users and more than 60million regular visitors every day. At the same time, the number of online goods every day has exceeded 800million, with an average of 48000 goods sold per minute. With the expansion of the scale of Taobao and the increase in the number of users, Taobao has also changed from a single C2C online market to a comprehensive retail business circle including C2C, group purchase, distribution, auction and other e-commerce modes. It has become one of the worldwide e-commerce trading platforms.

Pinduoduo

Pinduoduo is the mainstream e-commerce application product of mobile Internet in China. A third-party social e-commerce platform focusing on c2m group shopping was established in september2015. Users can buy high-quality goods at a lower price by initiating group shopping with friends, family, neighbors, etc.

Pinduoduo is the third largest online sales platform in China. Unlike Alibaba and jd.com, which also provide e-commerce platforms, it introduces a social approach to e-commerce. It catches the customer’s psychology of pursuing low price and puts forward the concept of team purchase discount. Users share product information on social media and form their own teams to buy products at a lower price, but they must complete the puzzle before the transaction deadline. This interactive shopping experience and relatively low prices have made pinduoduo a great success in China. Its sales revenue ranks second only to Alibaba and jd.com, and far exceeds other e-commerce platforms.

In the summer of 2019, pinduoduo beat jd.com to become the second largest e-commerce platform after tmall. By the end of 2020, the number of active buyers for many years has reached 788.4 million, becoming the largest e-commerce platform in China

Xiaohongshu

In June, 2013, Xiaohongshu was established in Shanghai and is one of the most popular social media platforms for high-end and luxury brands and shoppers in China. Different from other e-commerce platforms, xiaohongshu started from the community. Through the sharing of text, pictures and video notes, users recorded the positive energy and good life of young people in this era.

Most online communities are virtual communities. Users consume content online and the experience ends online. Xiaohongshu is called a “real community” because users must go back to real life to consume whether they see food or travel destinations in xiaohongshu in order to complete this experience.

Xiaohongshu is currently the most trusted social e-commerce platform, and its main market and target audience are consumers looking for fashion and luxury goods. This means that women, mothers and people interested in the beauty industry are the most concentrated demographic data on the application. These users are also often young and rich, which makes them very valuable in terms of conversion rates.

The power of social influence, KOL and word-of-mouth marketing is the key to Xiaohongshu’s amazing success and rapid growth. Users on the platform are highly interactive and participatory.

B2C E-commerce marketing in China?

Domatters will help you in one-stop. From store set up to campaign set up. We will help to manage your business license, Chinese ID, Chinese Phone,etc.

Increase sales and improve your e-commerce marketing in China via such as Web Tmall, Web taobao, Web JD, phone Wechat, TikTok, live streaming, internet celebrity,etc.

Or you have option to set up your own E-commerce store by wordpress or opencart. Then do marketing via China marketing channels on line.

Would you consider transferring your product to your store? Please don’t worry! We are ready to help with your list.

Our services include:

1. Product content optimization if required

2. Commercials Video production

3. set up accounts and run campaign

4. virtual office and logistics service.

More service we provided: SEO, link building, translation, China video production, please feel free to contact us.