China online market is very competitive. Yes – very competitive.
If you are thinking about importing foreign products through China online channels, questions, thoughts and worries may easily arise: Why go there? Will my products be accepted there? What kind of limitations are there for imports? Red sea – don’t even bother! There are way too many barriers to enter the market and so on…
So should you even bother?
We believe – YES! Absolutely. There is a ”Once in a life time opportunity”.
Lets start by first looking at the market size and economy:
The 2014 online retailing value was between 550-600 Billion €. Imported products represent about 10% of the total market. From 2013 to 2014 the annual growth of imported goods through online businesses increased by 50-60%. Online B2C sales are expected to reach around 53 % of the total market as early as 2017.
Underlying development continues to be healthy. The country has more than €17.2 trillion in bank deposits, growing by up to €2 trillion a year. This means that the purchasing power is there.
So how about in the long run; a recent forecast has stated that in 2050 China’s GDB will represent approximately half of the global GDB!
So – the market is attractive. And there is a huge demand for affordable, high-quality trusted western brands and products. A short walk along the streets of China will immediately make this evident.
Now lets look at the market from another perspective; there are seismic changes happening in China:
- Urbanization. China’s mass migration is currently under way and is single handedly the largest in human history; 300M citizens have already relocated to cities and 350M more are on the way. By 2030 China will have over 1 billion people living in urban areas. This is roughly equivalent to moving the entire population of Europe.
- Rapid growth of the middle class. China’s economy has more than quadrupled in just the last 10 years; this has lifted over 400M people out of poverty between 1993 and 2013. An additional 200M people will enter the growing middle class by the year 2026 joining the 300M who have done so in the past 30 years. This means that by 2030 China will have over 700 million middle class citizens.
We strongly believe that this market and economy outlook along with the rapid immense changes happening in China are an unparalleled opportunity.
Online mobile pastimes have shifted; from gaming to shopping.
How to capture your share of the market and penetrate? Innovation never ends but just speeds up. We believe there are many ways to do all of this however it needs a systematic, feet on the ground approach as well as respect to the local cultural and the appropriate local way to introduce your product to the targeted consumer.
A large budget may or may not help but we believe in quality, not quantity.
In our forthcoming posts we will be sharing even more tips such as: what are the essential must do things before starting, how to grow in the Chinese online market and how to make your product a hit.
Sources: AliResearch; A.T. Kearney analysis, IMF, McKinsey, Jefferies, Wikipedia.
This article was first published 23h November 2015 in Pulse