10 Steps for Successful Ecommerce in China

According to iResearch data, in 2010 the annual turnover of Chinese online shopping market has reached to 461 billion Yuan, with an increase of 75.3% compared to that of 2009, while the number of users has increased to 148 million and netizen permeability goes to 32.9%.

China is such a fast growing market that no one can easily ignore it. Take Luxury as an example, Giorgio Armani is the first luxury brand run its B2C E-commerce in China. The followers include Dolce&Gabbana、Valentino、Emilio Pucci、and Marni. The CECRC estates that the market size of luxury E-commerce in China will reach 20 billion yuan in two years.

In fact, China is also the country where the U.S. Internet companies often failed. eBay and Yahoo arrived with high hopes for a market that failed to live up to their expectations. Some other Internet giants such as Facebook, Twitter, Google and Groupon have to pull out of China. However, E-commerce is the combination of traditional business and Internet servers. Actually, there is a rule of Chinese E-commerce to follow up. Before we go over the steps, let’s find out what major mistakes foreign companies made in China first.

1. Shipping from outside of China

Shopping cart system is widely used in official website. Customers can easily choose where they want ship to. However, if you want to directly shipping to China. The packages might be detained in custom. Clients have to pay the tariff at custom. In fact, the latest data from Beijing custom shows more than 200 clients reject to sign the international package everyday.

2. Use the Western shopping cart and payment method

Do you know how Chinese customers pay the bill online? Can they directly pay by credit card? What third part payment gateway do they use? Actually, the financial industry is protected by Chinese government. Most Chinese customers only have domestic bank account and third part payment account. Therefore, they cannot even place the order without an international credit card.

3. Lack of required license

ICP license is the required license to running E-commerce in China. The E-commerce website will be shut down by Chinese government without this license. We will introduce how to get this license as follow:

10 Steps for successful E-commerce in China

1. Market Research in Chinese

You need to change your Western mind before you start the business in China. Market Research will be the foundation of your Chinese business strategy. It is really risky to enter China market without first hand Chinese materials. You need to hire some native staff or a Chinese expert agency to support you to finish the marketing research.

2. Partners

It will be much easier to enter China if you find a right partner to cooperate. They can help you to work out the political and legal issue at the early stage when you plan to enter Chinese market. For example, the government related organization, such as Bay Area Council. Or the marketing access partners, such as Intralink.

3. Localization Strategy

Localization is perhaps where most foreign companies lose out in China. Localizing in China can even mean discarding a business practice model that has been successful in other Asian countries like Singapore and Japan. Top executives from home-base are not going to win a local fight.

4. Chinese Business License

You have two choices to get the Chinese Business License. One way is find a partner in China to become a joint venture company. Another way is to run your own branch office in China. Then following the government rule to apply the business license.

5. Domain Name

It is better to choose .cn, the Chinese domain name suffix, to guarantee your successful Ecommerce in China. Which means you choose to host servers in Mainland China; and comply with Chinese policy. You need to bring your business license and one Chinese citizen ID to apply the .cn domain name.

6. Web Hosting

There are two major providers of wire-line telecommunications services in Mainland China. One is China Telecom-mainly to areas in the south of China includes Shanghai and Guangzhou. Another is China Netcom-mainly to the north of China includes Beijing. You can either host your own Web site or hire a Web hosting company, such as HiChina, to host your site. No matter which host you use, you better to use multi-line servers.

7. Website Design

Culturally relevant design is crucial for the E-commerce in a foreign country. It includes identity development, user interface design, and user experience design. You need to find the balance between company culture and local culture.

8. Payment Method

Usually, there are three very popular payment methods in Chinese E-commerce. First of all is directly pay by credit card. But the customers needs to open the online bank server first. Second is third party payment. However, only domestic third party payment is allowed in Chinese E-commerce. And Alipay occupied half of the market so far. The third one is pay by delivery, which is still widely used in Chinese E-commerce.

9. ICP License

ICP, abbreviation for Internet Content Provider, is a license to permit China-based websites to operate in China. China-based Internet service providers are required to block the site if a license is not acquired within a grace period.

10. Promotion

Search engine optimization is always important. However, the search giant in China is Baidu rather than Google. Besides that, you have to remember that search in Chinese is different from search in English. Besides that, you can also choose an affiliate service, such as Alimama; Baidu PPC; and social media marketing.

If you need any more information about entering the China market. Please visit our website for more information.