e-Commerce: your way into new overseas markets

 

Are you looking for new markets for your business?  Then you need to look into e-Commerce.

e-Commerce represents an opportunity both for consumers and for businesses:

  • Consumers get access to a world of goods and services, including some that may have previously been unavailable or prohibitively expensive in their location. 
  • Businesses can use e-Commerce to address new overseas markets that had previously been too expensive or difficult.

Within just a few years e-Commerce has changed the face of international trade in certain sectors – fashion, fast moving consumer goods (FMCG) and consumer electronics being notable examples.  In China it has also changed the face of online marketing for some product types that are not typically bought online (e.g. industrial equipment and vehicles). 

Domestic versus cross-border versus own-site

Most online purchases in China are made through domestic 3rd-party sites such as TMall, 1688.com (Alibaba) and JD.com, though there are many others, some of which are focused on specific product categories (e.g. Jumei.com for cosmetics).  Non-Chinese companies can sell through such domestic sites provided they have in-China business registration or representation, and arrangements for warehousing and fulfilment.

The largest Chinese ecommerce companies now also offer cross-border services for foreign sellers (e.g. TMall - TMall Global).  These allow Chinese customers to place direct orders on foreign sellers, which are then fulfilled directly from outside of China using international parcel services. 

It is also possible for Chinese customers to buy your products from your own website (based in the UK, say), though of course it is essential to consider how such traffic will be drawn to your site, whether the site will make sense to them, and whether payment can take place using preferred methods such as Alipay and Unionpay.

With so many options, it’s essential that you understand the strengths, weaknesses, benefits and costs associated with each, and make the right choices at the outset.  That’s what Chamber International’s ecommerce service is for – just click here to find out more.

Reach fast-growing markets

Global e-Commerce accounted for a staggering USD1.67 trillion of retail sales in 2015.[1] 

The percentage of retail that takes place online varies widely from country to country – 13.5% in China compared to 2.5% in Italy, for example [2].  Similarly wide variations can be found between different demographics, or geographically across large, diverse markets such as China and India. However, the trend everywhere is that online sales are growing year on year, and increasing as a percentage of total retail. e-Commerce is a rapidly growing market.

The fact that e-Commerce penetration varies so widely across the world is an opportunity too. With an expected 33 percent of the global market in 2015 and over 37 percent in 2018, the Asia Pacific region is becoming the leader of the e-commerce industry. In fact, China, due to its unprecedented economic boom, is not only driving the region’s leadership, but is also set to outdo the United States as the single country with the largest e-commerce market in the world [3]. In 2016, more than half of online retail sales are made by consumers in "3rd and 4th tier cities" in China, where incomes are rising fastest, and e-Commerce use is growing fastest too.[4]

Many British SMEs have found that e-Commerce has opened up new markets for them – read one success story here.

 

We can provide training and advice tailored for your business, to help you understand China and develop long-term business friendships there. Contact us for more details.

 

[1] http://www.retailresearch.org/onlineretailing.php

[2] http://www.retailresearch.org/onlineretailing.php, 2015 figures.  McKinsey & Co How Savvy, Social Shoppers are Transforming e-Commerce, 2016, p2

[3] https://www.statista.com/topics/2454/e-commerce-in-india/

[4] McKinsey & Co How Savvy, Social Shoppers are Transforming e-Commerce, 2016, p4

More on how you can access e-Commerce opportunities