Business Opportunities for Overseas E-Commerce Business in China

More Chinese people have gained internet access

Recently, the internet infrastructure in China was improved greatly. The internet penetration rate in China is 52.2 %, according to Internet Live Stats, which means that there are more than 700 million internet users in the country. This is twice as much as the total population of the U.S. Every 1 in 5 of the world’s internet users are from China.

The cross-border ecommerce market in China is vast and developing

Benefiting from the improved infrastructure, favorable government policies, and increasing needs for higher quality goods and services, inbound ecommerce industry in China has developed quickly. In 2015, the inbound retail ecommerce trade volume was 248 billion RMB, a 92 % increase from the previous year. It is forecasted that by 2020, 1500 billion RMB will be achieved, with a 43 % average yearly growth rate. The number of Chinese consumers who purchase through cross-border ecommerce websites will increase from 18 million in 2013 to 36 million in 2018. The number of consumers will increase 21 % every year.

Chinese customers with strong purchasing power are eager to buy overseas products

The target consumers are mainly middle class or above, with education levels of Bachelor’s degrees and above, and a higher income. They live in first or second line cities. Ninety per cent of them are between the ages of 20 and 40, and 57 % are female. More than 50 % users will purchase at least thrice a year, and they pay more attention to product quality, brand identity, and price performance.

The trend was initiated by new mothers who needed to buy baby-care products and people who had overseas life experience.  Nowadays, people from all walks of life have started shopping from cross-border websites and are buying a variety of products. Besides the most popular categories for Chinese customers – such as apparels, shoes, bags, baby care and cosmetics, other product categories – such as pets, tools, electronics, gardening, furniture and watches, have gained more demand.  

Entering China is alluring and easy for overseas ecommerce businesses

Seeing such a big market with a tremendous market growth rate, numerous overseas websites have already started directly selling to China. Luxury goods websites such as Farfetch and Shopbop have seen China as one of the most important markets for them. Another reason is that the cost of entering this market is much lower than before. Companies can use search ads to promote the original English website in China and test the market. With Baidu, the most widely used search engine in China, more than 95 % of internet users in China can be covered. More market input decisions can be made after the market is proven to be profitable.