The 5 Ms of Selling Cross-Border Into China

I had the honor of introducing Alibaba Group’s Jimmy Tobyne’s keynote session on July 21 at our Growing Global conference, and was asked to take a few minutes to warm up the crowd with some related information.
And the first thing that came to my mind was the letter M. It seems like if you want to build your cross-border ecommerce strategy into China, it comes down to 5 M-words or phrases. In no particular order, they are:

Middle class

AZN economists say the middle class population in China has grown to more than a half a billion, and could reach 854 million by 2030. And 2030 per capita income is expected to grow threefold from what it is today. Clearly, the middle class is rapidly growing, as is its disposable income.

Mobile

PayPal notes that 68% of shoppers in China made a purchase via a smartphone in 2014. As iResearch points out, the soaring use of mobile internet, improved mobile shopping scenarios, and better mobile commerce platforms are all contributing to this surge.

Also, mobile payments are on the rise. Companies like Alibaba, with its Alipay mobile payment solution, are making payments by smartphone second nature for the Chinese consumer.

Merchandising

Chinese consumers want luxury goods, but they also want authenticity. This explains why U.S. merchants such as Coach and Kate Spade are finding greater growth in China than they are in their own backyards.

But Chinese customers are not just buying luxury products online from U.S. businesses. They also buy everyday staples like food, baby products, and cosmetics, and big ticket items like furniture and appliances.

Marketing

Well… we haven’t cracked that code yet. China is a hotspot for U.S.-based merchants, but Return Path says just 44% of emails sent by U.S. businesses to recipients in China actually reach the inbox.

Marketplaces

The Chinese consumer trusts and prefers buying on marketplaces, and does not have that same affinity to brand-owned sites. Alibaba’s Tmall is king of the marketplace scene in China, followed by JD.com. And Amazon? While it’s a powerhouse in the U.S., it has just a fraction of the Chinese wallet.

Tim Parry is Managing Editor of Multichannel Merchant.

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