Gi2C Guide: Online Shopping in China

Gi2C-Guide--Online-Shopping-in-China

E-commerce is one of the fastest developing industries in the world with China dominating the field of growth. According to research provided by Forbes, virtual marketplace sales are growing 25% annually and will continue to expand three times more quickly than other avenues of retail. China is the world leader in online purchasing and boasts one of the most extensive markets for mobile commerce. The e-commerce retail market in China is estimated to be around $440 billion with two main companies dominating the online field: JD.com Inc. and Alibaba Group.

One of the main reasons for the impressive growth in online retail is the effective infrastructure in place for the swift delivery of items. As stable modes of travel develop along with government programs encouraging the purchase of smartphones, e-commerce is turning into a reliable form of shopping. This is especially the case in rural areas. In 2014, there was a 41% increase of rural online shoppers equating to 77 million as opposed to a 17% urban online shopper growth. Many online retailers are now specifically targeting rural areas to maximize sales by developing local distribution centers. This is especially appealing to rural consumers since efficient online purchasing allows them to order items straight to their homes (or to drop off centers nearby) rather than needing to drive to far out city centers.

People can buy everything from furniture to alcohol online. However, the main industries dominating China’s e-commerce landscape are cosmetics, electronics, and apparel, with groceries rising as one of the fastest growing fields. While internet shopping as a whole is on the rise, China is most noted for a growing base of consumers who use their smartphones to buy goods. With such a robust population of mobile phone users, around 675 million unique accounts, many companies are turning to developing effective mobile apps for shopping. Around 80% of the Chinese online shoppers purchased goods using their smartphones and 20% use smartphones for shopping each week.

Considerations that Chinese online shoppers keep in mind are price, quality, authenticity, and reviews. For electronics, consumers are most drawn to the lowest cost of an item, regardless of company. In terms of apparel and cosmetics, quality and authenticity are two of the major concerns for purchasing. Around 80% of Chinese consumers leave reviews for products purchased and over 50% consult reviews prior to purchasing. Chinese consumers are most concerned with written reviews and feedback by fellow consumers rather than generic star ratings or company advertisements. Successful companies are able to attract customers to their site, provide quality goods to encourage purchase, and then support customers who leave reviews.

There are a range of different e-commerce companies in China. Some operate using an Amazon.com type of approach with direct sales. Others promote a marketplace like Ebay.com where products are sold by individuals and other retailers.

Here are some of the top e-commerce companies in China:

  1. Alibaba Group – This company is the massive umbrella corporation for major online stores such as Taobao.com, Tmall.com, juhuasuan.com, AliExpress, and Alibaba.com, among others.
  1. JD.com Inc. – This is one of the other major e-commerce juggernauts in China. You can pretty much find everything from electronics to apparel and more on JD.com.
  1. Dangdang – One of the most successful e-commerce companies in China. Headquartered in Beijing, it is especially known for its book sales.
  1. Yihaodian – An e-commerce food company that was recently completely acquired by Walmart.
  1. Jiuxian – Online wine and beer seller that is based in Beijing.

When shopping online in China, always ensure that the company is reputable and has effective methods for dealing with lost shipments and missing products. Even with such a large current consumer base, there is plenty of room for growth in the online shopping market in China.

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Gi2C has been an internship provider in China since 2008 and has become a leader in the internship industry. Gi2C’s goal is to help students and young professionals not only safely get into China without falling prey to any scams but also to help them understand China and Chinese business culture. Gi2C provides tailor-made opportunities for interns to work for a variety companies in multiple industries based in China. For more information, visit their website: www.gi2c.org

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