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ARTICLE Business TipsJuly 15, 2014

E-commerce in China: what Australian retailers can learn from Alibaba

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If you want to start selling your products or services in China, first familiarise yourself with these eight e-commerce tips from the Australian China Business Council (ACBC).

If you’re in any doubt about the size or power of the Chinese e-commerce market, consider that the Chinese and privately owned (but soon to be listed) Alibaba Group of e-commerce businesses in 2012 achieved sales greater than those of eBay and Amazon combined.

It’s an exciting and heady market, but doing business online in China involves first understanding how the internet community works, says Carl Jetter, General Manager (Victoria) of the Australia China Business Council (ACBC).

Here are eight tips from the ACBC to help you do just that.

1. Get social media savvy

“First of all, you have to relate whatever you are doing to Chinese social media,” says Jetter. “China is not only one of the largest online communities in the world, it also has the largest social media presence. Their ‘netizens’ are the online consumers, and, to succeed, you must connect with them.”

But don’t fall into the trap of thinking a Facebook page or Twitter feed will satisfy the Chinese masses. Facebook, Twitter, Google and many other popular Western sites are blocked in China.

Instead, users enjoy the massively successful Weibo (think Chinese Twitter, with more than 500 million registered users – 500,000 of them in Australia) and WeChat , a mobile text and voice messaging service. Chinese language search engine Baidu provides search results for many Chinese users. And Taobao, an Alibaba site, is similar to eBay in that it allows people to format their own e-commerce site very easily.

2. Do your research

Organisations such as Coca-Cola, Tourism Australia and adidas have long appreciated the value of Chinese social media platforms. Smaller businesses such as luxury knitwear producer Jemala , based in rural Victoria, are also beginning to realise the opportunities on offer in China.

“We’ve been working on sparking up a relationship with the Chinese market for a number of years,” says Jemala owner Ian Gill, who estimates that five years of effort, including regular visits for trade fairs, will have gone into the Chinese part of the business before they sell their first garment in the country.

“We’re using an Australian web design firm to put the site together for us, and, language-wise, it will be entirely in Chinese. We also have a Chinese director on our board. That helps a great deal with translations, local customs, traditions, colours and ethos.”

Jetter adds another piece of advice: “Be sure to visit China yourself to get a feel for the environment.”

3. Understand design preferences

Be sure to familiarise yourself with the design expectations of the Chinese eye, says Jetter, as Chinese websites look and feel different to those in Australia.

4. Secure a local domain

“You’ll also need to make sure the site is registered as a ‘.cn’ site or it will not be seen in China,” points out Jetter. “Many Australian businesses, such as real estate interests and wine exporters, don’t even bother with a website. They do everything within a social media platform. But whatever you do, make sure the site is in the Chinese language. I’m astounded by the number of sites targeting the Chinese market that are in English.”

5. Use a suitable website platform

If your site is being designed specifically for the Chinese market, make sure it is not built within a platform that is blocked in China, such as WordPress or BlogSpot.

6. Think about shipping and delivery

Another very important consideration is shipping. It is not uncommon for 20 per cent of packages sent within China to never arrive at their destination, says Jetter. So, choosing a reliable delivery service is key.

“Align yourself with Australian companies based in China, such as ManageChina or Beijing Consulting Group, to assist in setting up your delivery service,” advises Jetter.

Australia Post and China Post also have a joint venture – Sai Cheng Logistics International – that targets Australian companies operating in, or sourcing products from, China.

7. Investigate payment options

"When it comes to payment options, cash on delivery is still king,” says Jetter. “PayPal and other such services are not yet so popular, and the largest credit card provider in China is UnionPay.”

Other cards that are accepted, but not as widely include Visa, MasterCard, American Express, Diners Club, JCB, Federal and Million.

8. Be realistic about costs

“Finally,” suggests Jetter, “budget for all of the travel and time and fees that will be involved in setting up your Chinese e-commerce unit. I see quite a few businesses that think it will be quicker and easier than it really is. But as with every business venture, it must be properly costed and budgeted if it is to succeed.”

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