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ONLINE SELLING AND MARKETING IN CHINA

2014-09-01

Online selling and marketing is booming in China these years.

Many companies ask or should ask themselves if they can afford to miss out on this opportunity. “Nothing is easy in China but everything is possible” is a saying these years high-lighting the vast number of visible and invisible hurdles to pass and massive potentials in China, if you do it right.

In the next 3 newsletters, Magnusson describes and examines and provides valuable legal tips and practical marketing tricks on Chinese

1. E-commerce and marketing,

2. M-marketing and social media marketing,

3. Selling Online – how to get started.

This newsletter provides a brief overview of the main facts on China’s current online selling and marketing situation which will be further described in the next newsletters. The newsletters can be read one by one.

The Numbers’ Game: China’s digital transformation

E-commerce:

Today China has, according to McKinsey Global Institute July 2014:

• 1,300 million citizens

• 632 million internet users

• 700 million smart phones

• 300 billion USD value in e-commerce in 2013

• 543 billion USD e-commerce value in 2015

• 60% of all internet users use social networks

• In 2013 China surpassed US as world’s largest digital retail market

Sales on Singles Day in China in 2013:

• USD 6 billion in sales in just 24 hours

The Big 4:

Just as the Google, Facebook, eBay and Amazon are the Big 4 in the West, China has its own

privately-owned Big 4:

• Baidu, “China’s Google”, founded in 2000, 80% market share

• Alibaba, founded in 1999, with B2B and market-leader B2C market platforms

• Tencent, instant messaging, such as QQ

• Sina’s twitter-like micro-blogging with 56% market share.

Alibaba IPO:

Alibaba, the Chinese online platform, is larger than eBay and Amazon combined and is expected out-grow WallMart as the World’s largest retailer.In 2016!

The contemplated Alibaba IPO will be one of the largest US IPO’s ever and most analysts expect Alibaba to raise USD 20 billion on the deal.

Alipay, Alibaba’s online payment solution, has:

• 50% market share

• 25,000 transactions each minute

• USD 3.3 billion worth of transactions each day.

Mobile commerce:

On Singles Day 2013, 21% of Alibaba’s sales were M-commerce, up from 5% in 2012!

M-commerce is also very much driven by Apps and in-Apps-sales, in particular WeChat.

Social Media:

The social media App WeChat has more than 500 million users and has developed from microblogging to games, taxi ordering etc.

WeChat has the potential to become a mobile and social commerce platform with integrated e-wallet and location based services, and much more.

75% of China’s internet users browse the internet through their smart phone.

Online consumer protection:

China’s consumers’ main concern relates to product safety and quality and China’s legal framework does not address several consumer concerns related to e-commerce. Today consumers may:

• Return goods within 7 days from receipt without reason

• Money-back in case of return of goods

• Consumers can seek compensation from seller or sales platform

• Consent needed to market services online or through sms.

• Heavier penalties may be imposed.

On China: Don’t boil an ocean

China is a very big country and few foreign companies can get a significant market share all over China in a foreseeable time period.

But being “big” in just a part or region of China is, for many companies, given the size and number of consumers more than enough.

And selling online is doable but requires hard work and persistency to succeed.

 

Related People:  Alexander Schultz, Nikolaj Juhl Hansen, Wenpeng Niu

Related Service Areas:  China GroupTechnology

Related Countries:  Denmark, Sweden

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