Cross-border commerce is a great way to break into the Chinese market, as millennials increasingly look abroad for quality products. But it’s not enough to flaunt the foreignness of your brand – you’ll need to engage with customers on a personal level.
Cross-border eCommerce is a growing phenomenon in China. In 2016, over $85 billion was spent on cross-border purchases in China (source: eMarketer), and it is predicted that by 2020, it will make up 15% of China’s total eCommerce (source: World Economic Forum). However, transitioning into the Chinese market requires careful consideration and planning. China’s online shoppers are not the same as their counterparts in the West, so if you want to win them over, it’s important to know who they are and what they want.
THE MILLENNIAL CHINESE SHOPPERS
70% of online Chinese shoppers are under 35 years old (source: East West Bank). They are highly educated (nearly 9/10 hold a Bachelor’s degree), with many having studied abroad. This gives them a more international and technologically focused outlook than their parents and grandparents, as well as a pre-existing awareness of overseas brands and standards.
Unhindered by student loans or housing expenses and financially well-off, Chinese millennials are able to spend their money online. This trend is expected to continue, as millennials’ income is predicted to grow by $3 trillion in the next decade (source: Forbes).
The growth of zhai (homebody) culture has channeled this disposable income toward online spending. As more and more millennials spend their leisure time at home, they are increasingly capitalizing on high-speed internet and mobile access to have products delivered to their homes. In coming years, more people will, therefore, expand their online shopping habits from clothes and food to include financial services and home appliances.
While Chinese millennials are ready and capable to shop your products online, they’re very choosy about what they spend their money on. If you want their trust, you’ll have to meet these three requirements.
1) The Foreign Factor
Chinese shoppers have developed distrust for domestic products due to safety incidents, counterfeit goods and low regulation levels. That’s why their growing awareness of foreign brands and products has caused them to look overseas for quality. Make your product information easily accessible and known in order to capitalize on your foreign quality. 90% of Chinese shoppers do their research before buying a product (source: World Economic Forum), so if you’re claiming superior quality because of your product’s foreignness, you’d better have the stats to back it up.
2) Boutique Brands
Ten years ago, simply slapping a “Made in the USA” label on your product might have been enough to get you a sale. Not anymore. Shoppers identify with brands that fit their personalities. They want to buy things that will help them stand out from the crowd.
There is a growing focus on brands’ history and values. If you want to connect with shoppers, you’ll need to embrace your heritage, selling your story in a personal, authentic way. Videos, interactive content and even virtual reality can all be used to encourage shoppers to invest in your brand vision and values. Moreover, companies that tap into Chinese millennials’ desire to travel and experience new cultures will rise to the top in years to come.
Customer service is also extremely important to shoppers. They want personal, direct communication with companies at any time and the opportunity to build real relationships with sellers. Therefore, it’s important to make yourself available. Platforms like Aliwangwang, Qzone and WeChat let customers contact you directly, which adds a valuable, personal touch.
Chinese shoppers value word-of-mouth endorsements because of the personal engagement. Analyzing your followers’ social media profiles can help you identify which celebrities to recruit for maximum impact. Look out especially for online celebrities whose brand authenticity and integrity has gained them large followings.
If you prefer more personal endorsements, WeChat allows users to share vouchers with their friends, while Qzone allows users to share interesting blogs with their friends. If your customers are engaged and invested, you can turn them into effective marketers and brand ambassadors.
3) The Technological Revolution
The majority of China’s internet users skipped PCs and went straight for smartphones. 95.1% use the internet on their phones (source: We Are Social). That’s why you’ll need to make your content mobile-friendly if you want to engage with your shoppers.
This doesn’t just mean optimizing your website for smartphones. It also means leveraging social media, which has become hugely popular in China. In fact, many shoppers skip search engines and head straight to online marketplaces to find their products. That’s why it’s key to open virtual shopfronts and be active on social media platforms like WeChat to connect with your customers.
The logistics of buying overseas products is difficult and thus a big turn-off for Chinese shoppers. 19.3% say they don’t buy overseas products because they are afraid of online payment safety (source: Azoya Group). WeChat allows users to pay for products directly on the app, which overseas companies can use to their advantage. By integrating a payment option into your social media, you could alleviate fears and build your customers’ confidence in the safety of your brand.
As technology has continually sped things up, Chinese shoppers want to be able to order online from overseas vendors with no extra cost or delay. They expect overseas sellers to match Chinese carriers in delivering within a week, so to succeed in China, you’ll need to make sure you have the operational capacity to meet their expectations.
With so many Chinese shoppers looking overseas, Beijing is making every effort to boost domestic consumption. Earlier this year, ‘China Brand Day’ was launched on May 10. The pressure on international brands to differentiate will only continue to intensify.
On the bright side, Chinese millennials continue to seek high brand value and spend big when they find it. Investing now to build a distinguished brand image with a focus on social engagement to lock in repeat business will set you apart in the market and continually strengthen your brand over time. Get in touch to learn how we can help you get started.