The following is an article written by Will Gensburg of UPS.
With a population of roughly 1.3 billion people, China offers
unprecedented growth opportunities for retailers looking to conduct
business internationally.
China’s National Bureau of Statistics reported last month that
online retail sales in China grew 26 percent in 2016 to $752
billion. That’s more than 40 percent of all online sales around the
world.
The e-commerce experience in China is on a scale like no other.
From shopping on Alibaba’s Tmall.com storefronts to the immense
participation in mobile commerce, consumers in China have high
expectations from retailers when it comes to the online shopping
experience.
For retailers looking to break into this competitive
international market, here are some tips to win with online
shoppers in China and succeed in the world’s largest e-commerce
market.
Invest in the mobile shopping experience
According to research firm TNS Global, Chinese mobile users
spends roughly 30 minutes a day shopping on their phone. China
is also the world’s largest smartphone market, accounting for 30
percent of the global market. Retailers should make sure their
mobile experience is top-notch and localized for shoppers in
China.
The mobile checkout experience, in particular, is important. How
important is mobile? According to eMarketer, mobile sales are
projected to reach nearly $1.5 trillion globally by the end of
2019. China is driving a huge part of that growth, with mobile
sales accounting for nearly half of all of China’s e-commerce
sales.
Mobile payment apps, such as WeChat Pay and Alibaba’s
Alipay, are examples of the types of payment options consumers
want. These two payment options use data and analytics to
personalize the mobile shopping experience and are now the two
biggest players in the Chinese marketplace.
According to the UPS Global Pulse of the Online Shopper™ study,
73 percent of online shoppers in China say the most important
option when checking out online is having a variety of payment
options in addition to a credit card.
Understand duties, local taxes and the implications for
consumers and your business
According to the UPS study, consumers in China rank duties and
taxes as their second most important international shopping issue.
Miscalculating duties and taxes or simply not making them available
early enough in the checkout process can be detrimental to a
retailer’s success.
For online shoppers, not having a clear understanding of the
duties and taxes they are responsible for can be a reason for
picking one retailer over another.
In April 2016, as part of an effort to encourage Chinese
citizens to purchase goods domestically rather than
internationally, the Chinese government changed the tax rules,
making purchasing luxury goods overseas more expensive for
import.
For retailers, changes to tax rules can cause major roadblocks
in their e-commerce strategies. This makes is absolutely critical
to show currency conversions and total shipping costs, including
duties and taxes during checkout to reduce cart abandonment.
There are solutions available, like UPS i-parcel, which take the
complexity out of cross-border e-commerce, making it easier and
more flexible for retailers to localize the shopping
experience.
This technology provides all the information that consumers need
to make purchasing decisions up front – including localized duties
and taxes, shipping options, delivery times, and local currency and
payment options.
Win over loyalists by focusing on quality
Online shoppers in China rank product safety and quality as the
top reasons for buying goods from overseas sellers. In fact, 40
percent of Chinese luxury goods purchased in the first half of 2016
were made across borders, according to a report by ContactLab and
Exane BNP Paribas Research.
Retailers looking to win over shoppers in China should make
product quality a top priority, especially with the rise of China’s
more mature or “rational shopper” as dubbed by research firm
Nielsen.
These consumers, which make up 40 percent of urban online
shoppers in China, keep quality top of mind and will search high
and low while paying a premium for highly sought-after items.
Quality in the online shopping experience extends beyond the
products themselves. Chinese consumers expect retailers’ packaging,
delivery and shipping options to reflect the quality of the item
they are purchasing.
For retailers looking to do business in China, it’s important to
partner with a logistics provider that has the global shipping and
logistics expertise to deliver on heightened consumer
expectations.
Don’t be left behind
The biggest risk for retailers looking to grow through
international e-commerce is not targeting shoppers in China.
Success begins by partnering with an experienced logistics
provider that understands the expectations and behaviors of Chinese
consumers and can help deliver a shopping experience that converts
these consumers to your customers.
Will Gensburg is the Vice President and Managing Director of UPS
i-parcel.
Reprinted with permission of Longitudes, the UPS
blog devoted to the trends shaping the global economy.
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