After the United States of America, China has the largest national economy in the world, and it is the world’s manufacturing superpower, accounting for 28.7 percent of global manufacturing output in 2019. Moreover, it is the fastest-growing consumer market in the world, with a younger generation who loves shopping online. All that makes it a uniquely appealing target market for e-commerce businesses.
Some Basic Facts about China
China is located in eastern Asia and is approximately the same size as the United States, with an area of about 9.5 million km². However, its population is nearly four times as large as the population of the US, with 1.4 billion inhabitants. The People’s Republic of China is ruled by an authoritarian regime, and is made up of 22 provinces, 5 autonomous regions and 4 municipalities (directly administered cities).
The cultural, economic, and communications center of the country is the capital, Beijing, which has a population of about 18.9 million. Shanghai boasts a population of 21.9 million and is China’s main industrial city; Hong Kong is the leading commercial center and port. Approximately 60% of China’s population live in metropolitan areas.
China’s gross domestic product (GDP) was 17.46 trillion U.S. dollars in 2021, with the per-capita GDP reaching 12,359 U.S. dollars. The country’s Prosperity Index reached 61.49 (which is quite low for a developed nation). However, this is partly due to the distinct divide in the distribution of wealth in China. The coastal regions are far more prosperous than the more rural interior areas — an issue that the government is working to address.
Language and Localization
Modern Standard Chinese is the official language of the People’s Republic of China, and it has the largest number of native speakers compared to the other dialects and varieties of Chinese. Standard Chinese is based on a dialect of Mandarine. Around 70% of the Chinese population (around 900 Million people) speak Standard Chinese to some degree, although not all of them speak it fluently.
The other important variant of Chinese is Cantonese, which is the official language of Hong Kong and Macau and is spoken by around 60 million people. A huge number of other dialects are also spoken throughout the country. In the eastern regions of China, Wu Chinese is spoken by around 80 million people, while Fuzhou is spoken primarily in the Fujian province by around 10 million people. Tibetan and Mongolian are additional dialects spoken in their respective regions. English is also one of the official languages in Hong Kong
It is interesting to note that most Chinese speakers can read Modern Standard Chinese even if they speak another dialect. The written characters are generally the same, but the pronunciation is completely different. However, particularly for Cantonese speakers, it requires extra effort, and there are differences in vocabulary for many common words. To offer your e-commerce customers the best experience, it would be advisable to have your website translated into both Mandarine and Cantonese.
In general, there is a mandate that product information be translated into Chinese for all goods and products sold in China. Even if that weren’t the case, though, it would be advisable, because most residents of China speak little, if any English. Besides that, Chinese translations open up all of East Asia as a target market, as there are many Chinese speakers to be found in Singapore, Indonesia, Malaysia, Vietnam and the Philippines. It’s also important to remember to list prices and unit measurements according to local conventions!
Internet usage trends
According to Statista, 73% of all Chinese people use the internet — around 1 billion people. Almost all of them use mobile devices to surf online, while only around half use a desktop computer. Over 70% of Chinese internet users live in major cities.
Google and Google Chrome are the most popular search engine and browser, with a market share of about 50%. Safari and Firefox are the other most popular browsers.
Social media is popular in China, but Facebook, YouTube and Twitter are blocked by the authoritarian regime. Consequently, China has other social media channels like the messaging service WeChat, the video platform Douyin (known as TikTok in the rest of the world) and a microblogging service called Sina Weibo, which is similar to Twitter. Around 1 billion Chinese people use social networks.
Trends in purchasing behavior
According to Statista, China has the largest digital buyer population in the world, with over 842 million people in 2021. E-commerce revenue in China is expected to grow to 1.553,3 billion U.S. dollars in 2025.
Generational differences can be seen between the shopping habits of older Chinese residents, who were raised under a communist regime, and younger residents who have grown up in the modern era. Adults between 19 and 35 years old are most likely to make online purchases and to spend money on entertainment and electronic products. They are also more likely to use social networks to rate products, make recommendations and set trends.
It’s worth noting here that Chinese consumers have different expectations for online shops than European and US consumers. The product descriptions are often very detailed and include more pictures and videos than western shops, and the websites are structured in a way that can feel almost chaotic to foreigners. If you decide to expand to China, your e-commerce shop should definitely be adapted to suit the local market.
China’s favorite ecommerce websites and services
There are a number of different online marketplaces that can help foreign companies begin selling to the Chinese target market. The number one e-commerce site in China is Taobao, which is owned by the Alibaba group. It was launched in 2003 and is now the eighth-most visited website in the world. However, to sell on Taobao, businesses must have a registered business in China, which can be a lengthy process.
The second most-popular online marketplace is Tmall (and Tmall Global), which offers a more upscale selection of products than Taobao. It is also easier for foreign companies to sell with, as businesses do not need to be registered in China to sell products on Tmall. It is Taobao’s partner site and is also part of the Alibaba group.
More than half of all online transactions in China are paid for with Alipay, which is also part of the Alibaba group. Alipay doesn’t book the payment until the product is delivered, which gives Chinese shoppers a sense of security. Tenpay, which offers a service much like PayPal, is also popular.
Important notes about import and customs regulations
China differentiates between prohibited, restricted and permitted products. Permitted products generally do not require a license to import them, although there are exceptions. Because China is developing and internationalizing so quickly, the rules for importation and customs change frequently, and they often differ from the international standards. Imports into the People’s Republic of China have different regulations than Hong Kong, Macau or Taiwan, which regulate their own imports and customs.
There are a lot of arguments for expanding your e-commerce business into China. The size of the population and its economy — coupled with nearly universal internet coverage and consumers who are eager to buy products online — make it an appealing target market. But there are also factors that make expanding to China difficult. The language barrier, of course, can be conquered with translation and localization, but the local differences in website structure and marketing preferences must also be attended to. On top of that, local import and customs regulations vary significantly from the European rules, and may change frequently. The most significant factor, though, is that the Chinese e-commerce market is already well-saturated with strong domestic brands that dominate the market. The “home team” advantage is significant, in this case, as domestic brands not only know the local culture and market but also produce their products locally, which saves transport and import costs.