E-commerce In China: 7 Key Areas To Get Right For Online Brand Success

Chinese e-commerce giant Alibaba laid claim to the world’s largest global IPO in 2014 serving as a timely reminder that China’s e-commerce market is projected to hit USD 540 billion by 2015. Not only that, but according to KPMG’s China 360 issue, China’s e-commerce market is forecasted to become the largest in the world topping those of the US, Britain, Japan, Germany, and France combined by 2020.

With this in mind, it’s no surprise that a growing group of luxury and niche retailers are now establishing their businesses online in China.

The Future of Luxury takes a look at e-commerce in China and discovers the 7 key factors brands really need to consider when creating an  e-commerce site ready for the Chinese market.

“in other countries, e-commerce is a way to shop, in China it is a lifestyle”. Jack Ma, founder of Alibaba

In general, certain truisms of design and development principles of the West also hold true in China: accessibility, usability, and customer engagement. However, comparable to the rest of the world, the roles of social media and mobile devices have become increasingly important for online sales with their impact is rated on a much higher level than in the West. In addition to different requirements due to language and user behaviour, cultural differences also play a significant role. This was highlighted by last years sales figures on Chinese Single’s Day, the 11th of November (11/11), where online sales saw more than triple the amount of ‘Cyber Monday’ in the US with over USD5.7 billion of revenue (KPMG).

Despite China’s e-commerce growth, success is certainly not a given. Businesses need to do their homework to understand the target market, and how best to influence and direct their online purchases.

Here we look at 7 key areas brands should consider carefully when entering the highly competitive world of Chinese e-commerce.

1. Technology

Any website with a commercial element must have a valid ICP (Internet Content Provider) License. It’s recommended to host the website within China’s great firewall, on a server in China or Hong Kong, to ensure accessibility and with more than 20% of China still using basic IE6 browsers, having an ‘inferior’ fallback capability built into development is crucial in reaching all audiences.

To achieve a professional functioning Chinese website not only does the content have to be in Mandarin, but also programming as well. From day one the wire framing, design, coding and content must be tailored to a Chinese user experience.

2. Authority

An innate awareness of ‘fake’ brands requires high attention to credentials and proving brand authority. The necessary level of trust can be gained by receiving an ‘official status’ through digital platforms and by providing strong and engaging content. It is also recommended to protect the brand with a trademark registration in China and to register a domain with a .cn suffix early to prevent being pirated by others.

3. Content

In general, Chinese Internet users are known for their hunger for information, which is why Chinese websites usually provide more online content and detailed product descriptions. One further content consideration is the influence of mobile e-commerce platforms. With internet connectivity available on all underground rail systems in China’s tier one cities (Shanghai, Beijing, Guangzhou and Shenzhen) it’s critical content should be mobile optimised for buying and browsing on the go. All content must comply with China’s content regulations online.

4. Design and UX

There are a few particular design and usability parameters to take into account for the market China. For example the search functionality is mostly abandoned within websites due to the slower typing speed in Mandarin and because words need to be put into context. It is much more effective therefore to provide a full site-map on the homepage to allow faster access to content on different pages.

As mentioned in relation to content, Chinese customers are accustomed to buying while on their journey to work, as there is connectivity on underground rail systems. With just over half of Internet users accessing the Internet via mobile phones, having a fully responsive and fluid website is necessary to ensure that consumers have the access they require across all platforms.

5. Search Engine Optimisation

To improve search engine performance in China, domains should be registered with a .cn suffix. China is dominated by one big search engine platform: Baidu, which has the lion’s share of search traffic in China. There are significant rivals, but the prime concern for all companies targeting Chinese markets is to effectively manage SEO and SEM on Baidu. Search engine marketing is heavily used on Baidu to increase prominence of websites, since SEO has its limitations in the Chinese language. Page naming and URL structures do not play a role when searching in Chinese, but it is recommended to include the English page description in case people are searching in English.

6. Social Media

China’s social media platforms have become an important additional driver or facilitator of e-commerce activity. These platforms, such as Tencent’s We Chat or Sina Weibo, China’s leading Twitter and Facebook equivalents (although they are used and operate very differently) have been rapidly growing. Social e-commerce is commonplace since We Chat has added payment functionality, allowing users to make purchases directly from the application. These trends are fostering an environment that makes mobile devices an increasingly crucial element in China’s e-commerce arena (KPMG).

The landscape as a whole is much more diversified than the Western equivalent, with many networks serving niche audiences of hundreds of thousands, and frequently millions, of users. Identification of target audiences and their choice of platform are necessary to engage the appropriate customer. Although the social environment is more relaxed than the more heavily regulated search and ICP industries, any content that is posted by official accounts may still be monitored and regulated by the Government and platform Regulators.

7. Target Audience

China’s on-line population is not only incredibly large; when it comes to consumer behaviour it is also highly diverse. In tier-1 cities such as Shanghai, many consumers are e-purchasing vacations, cars, or high-end personal care accessories, including cosmetics, handbags, and high-end fashion with greater transactional frequency than their counterparts in tier-2, tier-3, and tier-4 cities.

Although, the value and influence of Key Opinion Leaders (KOLs) is often in the centre of polarised discussions, KOLs undoubtedly are heavily rooted in the Chinese culture. Therefore, having the right champions backing a brand enables companies to reach the target audiences in a more effective way.