Business Localization in China
China is changing rapidly, possibly more than any other country. Already the world’s largest consumers of luxury goods and tourism their buying power is unparalleled. Yet only half of that population is online, more than 600 million Chinese are waiting to enter the global online consumer market. As a result, the Chinese impact on the way the world trades and market to them will continue to evolve over the next decade.
We’ve listed five aspects of the Chinese market.
China’s Market Size
More sales are taking place here than any other places in the world, more smartphones sold, more groceries, beer, antiques and art in China than anywhere else. 1.3 billion individuals are making discretionary purchases each and every day and it’s showing no signs of stopping. By 2020, BCG forecasts there’ll be 280 million affluent consumers in China with an income that is disposable of 20K to $1m.
E-commerce in China
Ecommerce in China has become a multi-hundred-billion-dollar-behemoth. 193 million Chinese frequently shop online, a number that is suppose to balloon to 350 million by 2015. This is half of China’s populace and more than the US, India, Japan, Russia and Indonesia combined. The Chinese government is placing its weight behind ecommerce in the latest 5-year plan, implementing policy in hope of quadrupling annual e commerce volumes from 2010 to 2015 to $2.9 trillion.
Love of Western Brands
Just as Chinese consumers want to shop online, they love buying products that are Western. Western brands are perceived as higher quality and safer, with more ‘cool-factor’. According to BCG, 61% of Chinese would pay more for US-made products – this preference is even higher in certain categories. The World Luxury Association discovered 86% of Chinese consumers refuse to buy luxury items labeled “Made in China”.
Chinese shoppers are less trusting than consumers elsewhere. China is crawling with fakes from the well-known electronics and watches to Subway restaurants and fake Apple Stores. To counter that, China’s most widely used business-to-consumer web site, TMall, only sells products directly from a brand name owner or authorized distributor, meaning consumers can shop with all the self-confidence of shopping for the thing that is real. That bodes well for foreign brands that are a lot more likely to be copied.
Reaching the Inaccessible Masses
Another draw card for ecommerce is it reaches areas that can be costly and difficult to service otherwise. 75% of China’s affluent middle income lives in smaller cities that you’ve probably never ever heard of. Most of these cities don’t have the brick & mortar stores stocking foreign brands, so they buy them online. There are about 200 cities with over a million people in China, and going online is the easiest & most efficient way to reach them.[/vc_column_text][/vc_column][/vc_row]