E-commerce and digital payments are big in China. In 2016, China accounted for 40% of the global e-commerce and 70% of growth in domestic retail came from online channels. Increasing wealth and internet access combined with a shift in consumer behaviour from offline to online drive this high-speed growth that seems likely to continue. China alone provide 800 million internet users, equal to the entire population in Europe and twice that of the US. Their behaviour has been learned from, and has driven the development of, the e-commerce industry.
Several Swedish brands have already taken the step
For Swedish companies, this brings exciting possibilities within high demand product categories such as fashion, home electronics, baby products, health & beauty and food. Several well-known Swedish brands such Electrolux, Fjällräven and Semper, already have a strong online presence in China. Daniel Wellington started early to cooperate with Chinese Key Opinion Leaders and influencers, marketing their products in social media. Zound Industries set up a local go-to-market strategy together with their Chinese online partner to be able to drive online sales in a country where fake copies of their products were common well before their launch.
Understanding the market and the differences
The online set-up in China differ from that in the west. Sites such as Google and Facebook are blocked and replaced with local alternatives in a strong domestic eco system of digital services. Three major players Baidu, Alibaba and Tencent, are dominating search engines, e-commerce and social media platforms as well as many other digital service areas.
The main difference related to the different eco system is that consumer e-commerce is dominated by platforms rather than direct sales on company owned web shops. There are also behaviour related differences. Chinese consumers are more inclined to give, and trust, customer reviews. And a high level of customer service is needed to guide customers through different offers before the purchase.
“China requires — and deserves — a tailor-made strategy and locally adapted solutions”6 tips for how to succeed with online sales in China
Swedish companies striving to enter the Chinese market must adapt their online strategies. In our report, Digital China, you can read more about how to succeed with e-commerce in China, but here are six key points to consider:
1. Do your homework: Put time into understanding the online landscape. Find and evaluate your niche, get familiar with the main competitors and, most importantly, understand your Chinese customers.
2. Select business model: Compare different alternatives for platforms, logistics, stores and partner set-ups. The digital landscape complex and a well thought through business plan is needed to find the right business model.
3. Build a strong internal team: A local team, near customers and partners, is usually needed, but make sure to also utilize resources from headquarters. Flexibility and fast decisions are key and therefore close collaborations and short decision processes are a must.
4. Find the right partner: Make sure to create a good relationship with qualified partners who are willing to put time and effort into learning about your product and who will prioritise your company.
5. Localise approach: Create good content, tailor-made for the Chinese market, in Chinese. Make accessibility a priority and show your digitally savvy customer base, who often prefer mobile payment solutions, that you care.
6. Keep moving: Work closely with your partners, local team and platform representative so that you can adapt fast to changes such as overnight alteration of rules or new technology that catches on rapidly.
More than consumer e-commerce
Digital marketing and sales are becoming more and more common for B2B as well, and China is also highly advanced within areas such as big data, artificial intelligence and IoT. For Swedish companies who have a desire to be in the forefront of digitalisation, China requires — and deserves — a tailor-made strategy and locally adapted solutions.
The time to act is now
Swedish companies have good chances to be successful thanks to leading solutions of high quality — but the clock is ticking and competition is fierce. Now is the time to act to strengthen Swedish companies in China.
Reach out to us if you wish to know more on how to grow global sales on the largest e-commerce market of the world!
