Doing business in China: does it suit you?

29 November 2022

Chinese people love online shopping. With a population of 1.41 billion, this makes China the largest e-commerce market in the world. Between January and August 2022, the online sales of products totalled 7,241.4 billion yuan. You can now join one of the largest e-commerce platforms with ease. Have you ever considered doing business in China?

Increasing prosperity offers entrepreneurs opportunities

The Chinese have the largest e-commerce market in the world. Average income and spending per consumer in China are still rising. Right now, 25% of sales are online purchases. However, ‘instant retail’ is also on the rise. A combination of physical shops, now offering their items with their own delivery service.

Increasing prosperity is also making Chinese consumers more interested in luxury products from the West. This makes China very interesting for European companies. So, this could also be interesting for you as a shipper.

Tmall: China’s number 1 E-commerce platform

Tmall.com is the largest e-commerce platform in China. But Alibaba, Pinduoduo and JD.com are increasing. These websites are comparable to Amazon and Bol.com, for example. All kinds of consumer products are sold through these platforms. This includes fashion, cosmetics and vitamin supplements, but food is also offered online here.

As well as an e-commerce platform, Tmall is also one of China’s largest search engines. This might sound strange, but the reason is that the world’s largest search engine Google is not available in China. As such, investments in Google search engine optimisation or advertisements are futile for those looking to reach the Chinese market.

The rise of instant retail

Consumers started shopping more during the pandemic. Yet there is a clear shift in this area: as well as online shopping, physical shopping – after the many lockdowns – is certainly in vogue again. Smaller, local shops are seizing this opportunity with both hands and getting ready for a comeback.

Nowadays, physical shops are innovating with new products and services. They are creating a smart combination by adding home delivery to their physical shop. Often within a 5-kilometre radius, which means that consumers can sometimes receive their products within 30 minutes. This is called ‘instant retail’. Thanks to this new, smart way of shopping, (offline) retail recently rose by 13.6%.

Low-threshold business in China: is it for you?

Those wishing to do business in China must normally meet several requirements. This includes a licence to sell products in China, having a physical shop or warehouse in China, being registered as a company with the Chinese government, and having a Chinese bank account. These requirements do not make it easy to do business in China.

E-commerce platform Tmall Global changes this. Any company can register as a seller with Tmall Global. The guidelines above do not apply. This is because officially, goods are sold outside China and then legally exported to China. It is no wonder that 20,000 brands from 77 countries across the globe have already opened a web shop on Tmall Global. Some examples are cosmetics brand Lush, Foot Locker and Swisse food supplements.

Is your company interested in the possibilities? We would be happy to tell you more. Talk to us about your wishes at sales@ritra.nl, or call us directly on 010-7671000.