Partner Article

A guide to selling in China

Trading in China is no longer the preserve of large corporations; a growing number of small and medium-sized businesses (SMEs) are developing international trade strategies with a view to selling to China’s 1.35 billion inhabitants.

And it’s not just the sheer number of consumers in China which makes the nation so appealing to businesses. China’s booming middle class means there is money to be spent and there are still gaps in the market which can be filled by overseas traders.

However, the real draw of China lies in the fact that its ecommerce sector is colossal, with retail experts predicting it could become the biggest online shopping market in the world this year. According to Taobao, China’s most popular consumer shopping site, more than 242 million Chinese residents shop online - six times the number of British online shoppers. The average Chinese shopper spends around $1,054 (£695) a year and makes some 8.4 purchases a month.

This huge online audience makes it easy for SMEs to target Chinese consumers without ever having to leave the UK.

How to make the move into China

China is becoming increasingly demystified to Western companies, and business owners are realising that the same basic business principles apply when trading in China as in the rest of the world.

That said, there are a number of things UK-based businesses can bear in mind to help make their move into the Chinese market successful.

- Develop a long term plan: If you rush into selling to China without giving it enough thought, the chances are you will lose out to the thousands of other SMEs trying to make their own impact on the nation. Think about the whole buying process, including how goods will be delivered, as logistics can be complicated in China.

- Get the right legal advice: China has a notoriously difficult legal and administrative framework, meaning companies wanting to trade in the nation should seek professional help to navigate it. The EU SME Centre can help provide advice regarding issues such as ICP Licensing and Variable Investment Entities.

- Don’t worry about the language barrier: If you’re not fluent in Mandarin, don’t panic, the chances are that most of the businesses you deal with in China will have someone who speaks at least conversational English.

- Choose the right payment method: The most common payment method for online goods in China is through a third party platform such as Alipay – an affiliate of Alibaba Group - which allows consumers to feel secure when making a purchase online, especially from a seller in another country. Payment platforms are also relatively straightforward to apply for and install on your website.

- Make use of resources: Selling via one of China’s existing selling platforms can help companies reach consumers without having the headache of setting up their own ecommerce site in China. Alibaba Group’s Tmall is the largest of such sites, with 54% of the market share.

- Don’t forget about marketing: There are a huge number of online shoppers in China, but there are also a large number of retailers hoping to target them, so marketing is a must. Many companies are trying to build an online presence before they even start selling and others are making use of sites such as Weibo – the Chinese equivalent of Twitter.

- Localise your offering: There is a huge geographical spread in China and vast diversity amongst the population, so it could be useful to tweak online strategies, product selection and pricing according to location, where possible.

- Develop partnerships: For a thorough understanding of the Chinese market and behaviour of shoppers, it is advisable to establish some local partnerships and get some valuable insight.

This was posted in Bdaily's Members' News section by Alibaba.com .