Why do Western Brands Fail in China?
China is not Australia, and nor is it America, Britain, Europe, or even Hong Kong….
By Sean O’Brien
In the words of Jack Ma, the founder of Chinese e-commerce powerhouse Alibaba, “In other countries, e-commerce is a way of shopping. In China, it’s a way of life.” Where the western markets have incorporated smartphone technology in a more superficial way to make life easier, China has gone a step further and intrinsically woven technology into its lifestyle. Mobile technology is at the core of a two trillion dollar Chinese e-commerce industry. As China comfortably grows into its identity as a global leader in the e-commerce market, new and unexplored opportunities for Western businesses are cropping up.
A mobile-driven market
Chinese consumers are uniquely mobile-oriented. This means businesses need to organise themselves to cater to their preferences, especially when it comes to payment methods such as WeChat Pay and Alipay. Unlike the minority 27% of American mobile users who engage in mobile payments, 81% of Chinese smartphone users are robustly involved in the mobile payment ecosystem. Where 64% of the global e-commerce market’s liquidity is generated through mobile payments, it is the same form of payment that drives 80% of China’s e-commerce.
The magnitude of the Chinese e-commerce market is distinctly massive with a 1.94 trillion dollar value, making the Chinese market three times the size of its American counterpart. The global market is projected to be worth $3.5 trillion, with China representing 55.4% of the market share. This boom in the Chinese e-commerce industry is the result of a population whose economic habits have evolved at a pace matching the innovations in mobile technology. The result is a culture where the perception of economic credibility, heavily relies upon digital media platforms.
The vast difference between Western and Chinese e-commerce markets is the role played by mobile technology. While the West rode the credit and debit card wave, China operated heavily on cash payments until the smartphone offered an alternative. This fostered the growth of an e-commerce industry focused upon the digital and mobile features of a business, with the potential for a booming cross-border market. Thus, China finds itself at home on the peak while competitors try to scale this global e-commerce market.
The British opportunity in China
With the increase in global digital infrastructure, small and medium businesses are starting to enjoy increasing market access, thereby driving growth. Luxury goods and high-end fashion are driving localised e-commerce growth in China, where cross-border transactions are increasing exponentially with each passing year. If there was ever an opportunity for British businesses to tap into the Chinese market, now is the time.
To succeed in securing a market share in the Chinese e-commerce market, establishing a prominent digital presence on Chinese digital media platforms is key for British business. Understanding the economic value of being visible on Chinese digital platforms is paramount for foreign businesses entering the Chinese marketplace. When it comes to social media presence, the cultural values of the Chinese population is deeply rooted in being seen and recommended by voices of authority like Key Opinion Leaders. The vast amount of smartphone users in China has blended e-commerce and social media into a massive digital juggernaut.
With over a billion monthly users, effective WeChat marketing is vital for foreign businesses to tap into the lucrative and ever-growing realm of cross-border transactions. WeChat’s With over a billion monthly users, effective WeChat marketing is vital for foreign businesses to tap into the lucrative and ever-growing realm of cross-border transactions.
To learn more about the growth that JGOO can bring to your business in the Chinese market, get in touch today and we’ll devise a full proof China strategy just for you!
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