How to Start Your eCommerce Business in China

China has become the leading emerging market for many Western brands and retailers. For many businesses, the growing spending power of high-income consumers and the middle class in China has become a compelling growth engine. For luxury brands, China is already a huge growth market, and many Western companies have had a brand presence in China for many years, albeit often with counterfeit products and even whole counterfeit stores. But as the economy grows in China and consumer thirst for foreign brands increases, companies will be compelled to consider an online direct-to-consumer presence due in-part to the following factors:

  • The scope of the Chinese market is immense. Not only is China one of the largest in the world by area, it already had more than 171 cities with more than 1 million inhabitants as of the country’s last census, which has likely increased markedly in the last 10 years. While launching physical stores in core markets such as Beijing, Shanghai, Chengdu, Guangzhou, and Shenzhen may be feasible, reaching even just the top-tier cities is extremely challenging operationally, particularly for a Western brand or retailer. eCommerce presents an important way to reach consumers across the entire country while complementing any decision to invest in core physical retail operations.
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Understanding China: The Opportunities And Challenges

China represents a huge opportunity for most organizations — the nation has a population of 1.35 billion people, consumer spend has gone up progressively in the past few years, and Forrester expects 268 million Chinese consumers to buy online by 2014. And, we are committed to providing our clients with the data and analysis required to be successful in the country. In fact, as part of our Technographics product, we have been investigating the impact of technology on consumer behavior in the Asia Pacific region since 2006.1

Recently, I collaborated with my colleague Sam Yanling Jaddou on a report called “Understanding China: The Opportunities And Challenges” that will help marketing and strategy professionals understand the uniqueness of the Chinese market, as well as key consumer trends.

Some highlights from the report, which is based on a survey of more than 3,600 metropolitan Chinese consumers2:

  • Chinese consumers are very receptive to new trends. They not only show high interest in new technologies like cloud services, Internet-connected TV, and tablets, but the uptake of these devices is already higher in China than in the US and Europe. However, because of their relative high price, new technologies are mainly bought by high-income Chinese.
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