Despite only 38% of the country’s total population shopping online, China has become the largest eCommerce market worldwide.
In fact, thanks to its growing middle class and rapidly increasing consumer spending, online retail is set to hit $1.8 trillion by 2022, making it a market worth setting your sites on.
But what exactly is there to know about selling in China? And which are the best Chinese marketplaces to sell on?
Throughout this article, we’ve listed some of the top online marketplaces available to international retailers, as well as some of the key considerations for establishing a presence in this market.
Let's start with the fact that Alibaba is the world's largest eCommerce company, with 601 million active users.
Unlike many of the other Chinese eCommerce sites listed below, Alibaba is in fact a wholesale trade site, used by online retailers across the globe to purchase stock.
With this in mind, if you’re a wholesaler wanting to reach an international market, you may want to consider selling on Alibaba.
But what are the fees?
In short, it will depend on your membership package, of which you have four options. These range from Alibaba's free plan, right through to their premium plan.
While you can learn more about each plan here, there are a few things worth noting. Firstly, all three paid plans are known as Gold Supplier Membership Packages and come with authentication and verification of your brand.
Where they differ, however, is in the exposure your listings will receive, the number of products you are able to list, whether or not you have a customized website and the level of customer service you have access to.
Now back to the costs.
For the Basic Package you’re looking at an annual fee of £1,399, for the Standard Package £2,999 and for the Premium Package, $5,999.
You will also incur a payment processing fee, the price of which will depend on your payment method and varies from a flat $15 fee to a percentage of the sale.
That’s not all though.
There will also be a 1-2% service fee for orders that exceed $5,000.
Alibaba-owned Taobao is one of China’s largest eCommerce platforms, with more than ten million sellers.
But how does Taobao differ from Alibaba itself?
Unlike Alibaba’s business-to-business wholesale focus, Taobao is focused on selling cheap goods, directly to consumers.
Now when it comes to selling on Taobao from an overseas market, it can’t be ignored that it’s no easy feat.
In fact, to sell on Taobao you will need to register a company in China or do so through a Chinese partner. Keep in mind that this does not include setting up a post box company or using a virtual office.
So, while it’s not impossible, it is perhaps better suited to companies that have already built up a presence in the country. If, however, you’re only just testing the waters and looking to sell into China cross-border, you’ll probably want to consider the likes of Tmall Global.
Tmall Global is another Alibaba-owned Chinese marketplace, but unlike Taobao, focuses on selling mid to higher-end goods.
That’s not the only difference though.
Tmall Global specifically caters for international sellers looking to reach the Chinese eCommerce market.
Subsequently, it offers relatively easy entry into this market, enabling you to sell in China without a Chinese business license or physical presence.
The site does, however, operate a strict acceptance process and brands can expect to wait 4-8 months for approval.
Once accepted though, sellers incur three separate fees; a refundable deposit which can range anywhere between $8,000-25,000, an annual service fee of $5,000-10,000 (product dependent) and a 2-5% commission on each sale.
Like Tmall Global, JD Worldwide is amongst China’s largest eCommerce sites and is a popular choice for international merchants as you aren’t required to have a legal entity or bank account in the country.
So, what is there to know about selling on JD Worldwide?
Firstly, as a retailer on the site you will have the choice to sell through their reseller model or their traditional marketplace model.
More specifically, with the reseller option, JD Worldwide will purchase your inventory from you and resell it to their consumers.
Alternatively, you can list the products yourself and incur a 2-10% commission on each transaction, as well as a $1,000 annual membership fee.
Kaola.com is yet another marketplace making waves in the Chinese eCommerce market and therefore one worth noting.
What’s more, Kaola is predominantly focused on cross-border eCommerce, with global sellers spanning Japan, South Korea, Europe, US, Australia and New Zealand.
There are in fact a number of advantages to sell on Kaola.com, including (but not limited to) lower entry requirements than other Chinese marketplaces, a wide product offering and fast payment processing.
When it comes to fees, sellers incur a commission of 2-10% per sale (product dependent) and a $1,000 annual fee.
Before anything else, it’s worth noting that unlike many of Amazon’s other international sites, retailers can only sell on Amazon.cn by invitation.
You should also keep in mind that if you already sell on another Amazon marketplace and have a proven seller record, the process of getting started will be faster and easier.
So, what else is there to know about selling on Amazon China?
To start with, thanks to its strict verification process, the site has become popular for its high-quality and authentic international brands.
There are, however, some product restrictions.
As an example, cosmetics that may be classified as medication in the US are prohibited for sale on Amazon China. This includes items such as soaps, cleansers and lotions that are marketed as treating acne, eczema or rosacea cannot be sold.
Now when it comes to Amazon.cn fees, as with any of their sites, sellers will incur a commission fee ranging from 4-15%.
Where Amazon China’s fees differ, however, is that they have introduced a minimum sales commission for each product category, starting from 3.9 Yuan, up to 91 Yuan.
While China offers some great opportunities for international expansion, as with any market there are cultural differences and consumer expectations that should be acknowledged and adhered to.
When it comes to delivery, it can’t be ignored that online shoppers in China have extremely high expectations.
In fact, according to a Royal Mail study, 90% of Chinese consumers want a range of delivery options, 89% state the importance of having a specified delivery date, 88% actively look for retailers that offer free delivery and 76% would even like to be offered same-day delivery.
Failing to meet delivery expectations also puts your business at risk, with 58% stating that a poor delivery service would put them off from purchasing from that retailer again in the future.
It's not all bad news though.
For those of you selling from the UK, delivery expectations are slightly more relaxed, with only 3% expecting their orders to arrive within 1-3 days and the majority (32%) expecting 6-7 days.
But how can you ensure you’re meeting the higher expectations?
Well, one way is through the use of an international fulfillment service.
By outsourcing the warehousing and fulfillment of the products you're selling in China, you not only benefit from having your stock held closer to the end-consumer, but some services will even handle customer service for this market which is often a huge barrier for selling into China.
If you’re a UK retailer, the good news is that British products are seen to be of exceptional quality amongst Chinese shoppers.
So much so that more than one in two consumers have bought items from the UK in the last three months, a statistic that is higher than the international average. Five times higher, in fact.
Better prices, greater trust that the item isn’t counterfeit, and more product availability are amongst the top reasons for this.
Interestingly, when it comes to the most popular product categories for foreign purchases, technology leads the way, followed by fashion, sportswear and food & beverage.
International beauty brands have also become a huge hit amongst Chinese shoppers, with South Korea, Japan, France, US and UK amongst the top markets exporting the highest dollar value worth of beauty cosmetics and skincare products to China.
That’s not all though.
Jewelry, health supplements, baby formula and homeware are also sought-after products from global brands, so if you sell these it's certainly worth researching the market to anticipate product demand.
One way to differentiate yourself when selling into China is by taking advantage of the country's holidays and other retail opportunities.
Golden Week, for example, occurs on the first week of October and is a nationwide celebration that often sees Chinese consumers buying gifts, making it a holiday that you can capitalize on as a retailer.
As an example, you may want to create specific promotions or even offer loyalty schemes. It's worth keeping in mind that best-selling products during this time include jewelry, homeware and vehicles.
Similarly, Singles Day and Chinese New Year are other popular shopping days in China worth considering as part of your international marketing strategy.
So, there we have it.
The top online marketplaces in China and some key things to know about selling to Chinese shoppers.
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