Every European or US company that has high-quality products and clear brands, should have a go at entering the Chinese e-commerce arena. The potential of e-commerce in China is immense and still growing at high pace, says Jacco Bouw, CEO and founder of email marketing specialist Webpower.
Bouw addressed an audience of Club China members at the recently held KLM Open pro golf tournament in Zandvoort, The Netherlands. Founded in 1999, Webpower has 250 employees in nine offices in five countries; the enterprise has a large market presence in China, where it supports a large number of international and Chinese companies in enhancing the performance of their e-commerce activities.
China is offering wonderful e-commerce opportunities for international companies, Jacco Bouw insists. The numbers are impressive. China still is the world’s fastest growing major economy, with yearly growth rates of over 7 percent over the past 30 years. It is also the world’s fastest growing consumer market. Bouw: “And we should not forget: it is also the second largest importer of goods, with a market where online trade has been booming since 2010. I dare to say that the development of e-commerce has reached much further in China than in Europe and the US.”
Bouw refers to ‘Singles Day’ in China – also known as 11/11, a popular event that, in recent years, caused a major sales boom in e-commerce. Every year ‘Singles Day’ breaks new sales records. In 2014, e-commerce giant Alibaba reported more than $9 billion in sales on this day, illustrating the buying power of the Chinese consumer and the importance of the event in the retail calendar.
The buying power of the Chinese middle and upper class consumer should not be underestimated, Jacco Bouw adds. A great example of this is the sales of apartments in a newly finished complex near the offices of Web Power in Shanghai. “All 790 apartments were sold in just one week. Please be aware that the cheapest was $ 900.000, the most expensive one was € 4.7 million. This says a lot, not only about the buying power, but also about the perceived crisis in China. It is just not happening.”
Dozens of channels
“The one thing that every business should be aware of is that China does not just offer one channel, there are dozens of suitable channels. The one that is relatively unknown outside China is WeChat, a mobile messaging app that offers quite a large number of bonuses. Every Chinese that has his bank account linked to – or credit added to – his WeChat account can practically buy anything he wants and pay any bill on this mobile phone app. I envy the Chinese, because only residents with a Chinese passport or identity card can enjoy the full benefits of this app that currently already has 600 million users. Having a WeChat store is one of the options that businesses wishing to enter the market should consider”, Bouw insists.
One of the most important things that entrepreneurs should be aware of, says Bouw, is the popularity of western brands and the simple fact that their products are manufactured in the west. He refers to the preference of his Webpower staff in China – they prefer the Audi A5 over de A4 or even the A6, because the A4 and A6 are produced in China and the A5 in Europe.
There are a lot of other channels to choose from, besides WeChat. The best-known is Alibaba’s – relatively high-cost – offering of TMall, but there is also JD and others. “Anything that you can think of is sold via these platforms. I even found a wedding dress vendor, that delivers just in days. Speaking of delivery: it is not uncommon for Shanghai commuters to buy a pair of shoes from a large display in the underground station. Just choose a pair that you like, aim your camera for the QR-code of the shoes, select your size, complete payment while you are on your way to the office. A prepare for delivery within of your shoes within three hours at the office!”
Try new products
One more learning from Webpower’s expertise and Jacco Bouw’s personal experience: the Chinese consumer is eager to try new product and trust new brands. “The are more adaptable to changes. They are also increasingly prepared to pay for value, safety and wellness.”
The numbers are awe-inspiring. There are 1.3 billion people in China, 642,000 of them are internet users. 530,000 of them are mobile internet users. In China, 330,000 people shop online on a regular base, 300,000 shop online. Bouw: “The sheer numbers speak for themselves. This is a market. Your product will not sell by itself, but the opportunity is hard to ignore.”