Are you familiar with Xiaomi, Baidu, Tencent, and WeChat? These are names that aren't quite as familiar to us as Google, Amazon, or Apple, but they dominate the world's largest e-commerce market, and this e-commerce market isn't desktop, but fully mobile.
E-commerce in China
China has become the world's largest online market over the past four to five years. The ideal prerequisite for this was the very high number of internet and social media users who browse via smartphones. Of the nearly 1.2 billion people in China, almost 600 million are online. However, things work somewhat differently in China, as the tools and strategies familiar to us don't work. In China, most sales are generated through online marketplaces, and these are dominated by one player: Alibaba. The Alibaba Group's Research Center expects e-commerce sales in China to reach a total of 10 trillion RMB (or almost 150 billion Swiss francs) in 2020 – representing 16% of all consumer goods purchased in the retail sector. By comparison, in Switzerland, we're at 6-7%. This is reason enough to look eastward, draw some parallels, and learn from the experience.
Ali Baba and Taobao
In Switzerland and Europe, the Alibaba brand is particularly well-known. Alibaba is a group that operates the popular online marketplace. However, the marketplaces where truly large quantities of goods are sold go by other names, namely Taobao. Taobao is essentially the equivalent of eBay or Ricardo, but with a high monthly fee; in return, users gain access to 600 million people.
Over 50 million registered users account for almost half of all mail shipments in China. To ensure the marketplace is used effectively, there's the Alibaba Academy. This academy offers a year-long training program. Currently, the focus is primarily on how user behavior is evolving.
Meanwhile, user numbers are rising for the instant messaging service WeChat. WeChat is a so-called "all-in-one" app. Operated by the internet conglomerate Tencent, the app serves as both a communication tool and a social network, but has also long since become an e-commerce platform, similar to what Facebook launched with its Messenger app. WeChat already boasts over 890 million active users. What's truly remarkable is that over a quarter of its users are located outside of China, reflecting WeChat's aggressive international expansion strategy.
Fazit
What does it take to be successful in China? The biggest challenge, especially for international sellers, is building trust. Because some companies falsely label their products as "Made in XY," retailers in China often have to deal with counterfeit goods from their competitors. It's best to avoid this pitfall altogether and instead focus on Swiss Made, Made in Germany, or Made in Austria, ensuring and protecting this quality, and seeking support from local consultants. It's also crucial that online retailers proactively address current food and product safety issues, as negative news in the media strongly influences Chinese shoppers. Chinese users rely heavily on images, videos, and reviews—not so different from those in Europe, or even Switzerland. There's still a lot to learn here, both mutually and through best practices.
