China is the world’s second largest economy, and the appetite of the market continued to grow in the last few years. It is projected China eCommerce market will reach 1.6 trillion U.S dollar in 2019.

There is also a noticeable tendency that more and more Chinese consumers would buy directly from overseas eCommerce websites and this trend has created a whole cross-border eCommerce ecosystem. Cross-border eCommerce offers a comparatively accessible entry strategy compared with traditional market entry strategy, however, it also brings unique challenges and pitfalls along the journey.

Our partner TMO (Technology for Mobile and Online) Group, an eCommerce service provider, offering cutting-edge solutions on eCommerce, O2O, mobile and cloud value-added services, recently published a comprehensive eCommerce market localisation guide thoroughly explaining on how to localise for the eCommerce business for China.

It is a handbook for business owners, c-level executives, marketers and eCommerce specialists covering an extensive series of business topics, industry insights, latest available market data and hands-on insider information. It provides a complete overview and strategic direction in starting your eCommerce b usiness in China.

We were invited to review the report and we have gathered some useful insights in this article to share the learning with our audiences.

eCommerce Market Localisation Guide Review

The Chinese Ecommerce Ecosystem

The report thoroughly explains the eCommerce ecosystem in China, which can be divided into three B2C and one B2B section. The report primarily focuses on B2C eCommerce and illustrates the differences in each option.

eCommerce Market Localisation Guide

Brand eCommerce site, third-party marketplace and WeChat store are the 3 key approaches that brands could consider when entering the market.

The report also highlights the top players brands should be aware of in the B2C market. Tmall and JD.com dominate over 80% of the local market.

Legislative Framework

Legislative matters are complicated, however, often overlooked by other resources when it comes to the local online guides. The highlight of this report is the dedicated legislative framework component, which explicates the legislation requirements with respect to electric contracting and legal information/documents you must provide when trade in China.

Legal Entity

Whether a foreign business should have a local entity in China is debatable. The report provides a hands-on analysis to help business understand whether it is necessary to obtain a local entity.

Customs and VAT

From March 24th, 2016 consumers who purchase goods through cross-border eCommerce must pay import taxes including tariffs, VAT and consumption tax. The table included in the report offers a clear overview of the local taxes.

Online Sales Models

It takes much more than mere translation to succeed in the market, brands must think carefully about the channels they should adopt for the growth as part of the localisation plan.

The report summaries three channels that businesses can consider when establishing their online sales models.  They are:

  • Stand- alone brand ecommerce website
  • Third-party Marketplaces
  • WeChat store

WeChat store is the unique channel specific to the China market, requires a deep understanding of the local social media platform. The unique usage of WeChat Pay and H5 are essential to the success.

Entry Strategy

The report also suggests that the marketers should analyse products, company business model, budget and regulations 4 dimensions to outline the most suitable entry strategy.

It recommends Fast and O rganic growth two strategies to meet different budget and growth requirements.

Payment Methods

Although international credit cards are widely used internationally, the report points out that it would be beneficial to included Chinese local payment such as Alipay, Union Pay and WeChat pay to break the trade barrier.

To read the full report, please visit TMO Group website to download the report. D ownload URL: https://www.tmogroup.asia/resources.

If you are interested in purchasing the full report from TMO group, quote our exclusive discount code ‘CNMARKETCORP0801‘ and enjoy a 5% discount.

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