E-commerce in China is gigantic. It accounts for about a third of all retail sales in China, and therefore nearly *half* of all e-commerce globally. With colossal e-commerce adoption and an affluent middle class, China is often a target market for premium brands. So how do you scale your e-commerce presence by selling in China?
Here are the considerations for taking your direct-to-consumer in to China.
E-commerce in china
First off, it's important to realise that the 'owned property' and brand-orientated mentality does not apply in China. If you're expecting to host your own website and run your own email list, it's going to be challenging.
Most people buy through T-mall & JD, which together make up over 85% of the market. There is an excellent article by JingDaily on choosing the right one for your brand here. You may have also heard of Taobao, which is a C2C platform like Ebay or Depop, so avoid it.
A lot of e-commerce is also done through Wechat, a multi-purpose messaging platform and social network. It also facilitates payments, and with over a billion users, is one of the few potential competitors to Visa and Mastercard.
T-Mall is, as you might have guessed, closer to a 'mall' stocked with brands and so is probably the best option for a Shopify merchant. With a T-Mall account you gain access to a storefront, analytics and marketing tools.
There are two versions of T-Mall. T-Mall, for brands who have an entity and logistics within China, and T-Mall Global for those shipping into China.
T-Mall has various requirements for trademarked brands (or authorised distributors) that are based outside mainland China. There's also a fairly hefty fee, and you must apply and be accepted to trade, so you'll need to do some degree of market validation first.
Trading Partners (TPs) are often used as an initial venture onto T-Mall, where these specialist partners manage all operations on the platform on your behalf, from the management of inventory through to customer service and marketing, essentially acting as your China distributor in China. TPs are vetted by T-Mall, and will typically charge a fixed monthly retainer as well as a percentage of sales.
Business of Fashion has a good overview of the rapidly changing landscape when it comes to e-commerce channels in China for brands.
How to run a Shopify store in China
Despite the majority of sales in China converting on the 3 marketplaces and WeChat stores, several international brands have found success with their own ecommerce offering.
Younger Chinese consumers are more accustom to the western approach to e-commerce and are looking to have a brand replationship in a way that marketplaces cannot offer. They are also open to purchasing cross-border and on English languge sites in order to recieve the goods that they want, which opens up the possiblity of a whole new market where Shopify can thrive.
Make sure you choose a Shopify theme and apps that support Traditional or Simplified Chinese. If you're having a custom Shopify store build, detail your international requirements in your specification. Run both an English and Chinese language version where possible (using Shopify's multilanguage Translations API).
We recommend having a seperate store for your brand and make use of a multi-region Shopify architecture for selling internationally. Where possible a China TLD should be used, however there are strict criteria in order to purchase these, otherwise use the cn.yourbrand.com subdomain.
Don't forget, as ever with an international strategy, you will also need to consider local fulfillment, returns and customer service. Some companies will do this from Hong Kong, or within China itself.
Shopify currently has no servers in China, but can be accessed there, with some caveats. See below.
Why is my Shopify store slower in China, and how can I improve it?
All foreign websites will be slower to access in mainland China, for two reasons.
Firstly, the 'The Great Firewall of China' (GFW) scans incoming traffic and this will slow your site down substantially. There are certain sites which are blacklisted, and if you're using libraries from these (such as tracking pixels from Facebook or other social media sites), it may not work at all.
Some examples are broken down in the wonderfully titled 10 Beautiful Shopify Stores That Don't Work in China (but should).
Secondly, China has 'limited peering capacity' because there are only 4 ISPs and 1.3 billion people, so it's congested, basically.
To improve loading times, here are some starting points:
- Use a nearby CDN, Shopify uses Cloudflare.
- Cut down on large media in your Chinese Shopify store, hosted videos on services such as YouTube and Vimeo will be blocked, so look to host these on a Chinese equivilent such as youku.
- Simplify and remove unnecessary apps and features. Western tracking and analytics tags will be blocked, so remove Google Analytics, Facebook and other such code. Strip back as many partners apps who use their own servers, as the GFW uses 'deep packet inspection' and if there's less to search your site will be faster. It may also be possible to find your libraries hosted in China, so switch your jquery from Google APIs to staticfile.org
- Make sure you have a clear sitemap
- Hosting in China can be difficult and expensive so generally we wouldn't recommend it
We highly recommend having a seperate store with the above optmisations running on cn.yourbrand.com, this is another good reason to use a multi-region Shopify architecture for selling internationally.
Accepting payments in China
The most popular payment methods in China (in order) are Tenpay, AliPay, Union Pay:
- WeChat Pay, owned by Tenpay
- Alipay, owned by Alibaba
- Union Pay, the card issuer for China's banking industry
As we've already mentioned, it's likely that you'll need to use one of the marketplaces mentioned above for transacting in China.
Do Shopify have a base in China?
In 2019, it was reported that Shopify are setting up a team in China with the goal of helping Chinese exporters that want to sell in to foreign markets (rather than the other way around).
Need help with international?
Need help with your international e-commerce strategy and execution on Shopify? That's what we do. Get in touch to discuss your next project!