What U.S. Companies Need to Know About China’s Booming E-Commerce Market
China‘s e-commerce market is on the rise — and it’s not all due to the growth of Alibaba. At a forum this week in New York, Chinese e-commerce platform Vip.com shared its growth projections of U.S. goods on its site as well as insights into the behavior of Chinese consumers — and tips for businesses looking to break into the country.
“The economic power of the Chinese middle class and its demand for authentic branded goods, coupled with the explosion of our e-commerce opportunities in China, has set the stage for dramatic growth for U.S. companies in Chinese consumer sales,” Hillary Wang, head of global buying for the e-commerce platform, said in press material distributed at the event.
Among key trends in Chinese consumer behavior: Women are managing family wallets (“Vip.com’s online shopping platform is dominated by female buyers, with 80 percent of purchases being made by women,” noted Wang,) and the population is especially social media-savvy (the press material pointed out that the country boasts more than 700 million internet users.)
Speakers at the conference also suggested that when marketing in China, celebrity engagement is a smart move for businesses. It was suggested that Chinese consumers are positively influenced by this — and, as one speaker advised, it may be best for organizations to tap Chinese brand ambassadors to best “localize” their offerings.
Wang stressed that the creation of a full experience for Chinese shoppers is critical. “In China, retail is all about storytelling,” she said.
Vip.com also used the event as an opportunity to share information about their platform, and to market their offering to U.S. brands.
A spokesman for the firm explained that “Vip.com’s business case for U.S. brands is built on the growing Chinese consumer market, fueled by young, social media-conscious customers” in addition to features like the country’s “burgeoning middle class.”
The spokesman confirmed that the company “forecasts tripling its current sales of U.S. goods into China from $2.2 billion in 2017 to over $6 billion by 2020.”
The e-commerce platform appears committed to growth of late — in fact, the owners of social media platform giant WeChat recently locked down an equity stake in its parent company. The move, according to the spokesman, “[will enable Vip.com to] provide brands access to potentially one billion active users monthly.”
Prior to the event, Wang told FN that she feels there was enormous opportunity for U.S. brands in China.
“We are at an unprecedented point in time when a growing marketplace of Chinese consumers are both interested in quality U.S. brands and the technology to purchase them via e-commerce,” she said. “We also believe that U.S. brands have not begun to scratch the surface of opportunities to position themselves and their products optimally with these consumers.”
The head of global buying explained that with the platform’s online shopper base of over 300 million Chinese consumers, she hopes the event will help U.S.-based teams learn about the “benefits of accessing the expanding Chinese consumer audience.”