Consequently, recommendations from trusted vendors, friends, family or other credible sources such as micro-influencers is an incredibly important part of the purchasing journey. How trust has driven growth in China’s CBEC landscapeĪround 90% of sales happen on four leading marketplaces, but even for these, consumer trust remains staggeringly low, with the best rated platform scoring just 39/100 on ‘trust in product authenticity’ in a 2019 survey. Correspondingly, e-commerce purchases of luxury goods trebled from 13% to 39% in the same period. However, thanks to Covid travel restrictions, the proportion of luxury purchases made overseas shrank from 55% in 2019 to just 10% in 2021. It was previously common to feel a halo effect from listings in major global retailers in the world’s megacities. This means that international brands can no longer rely on their previous assumptions when entering China. At the time of writing, it remains to be seen what future policy course China will choose, and how quickly it will open up to the rest of the world and loosen Covid controls. What is the outlook for e-commerce in China?ĭue to Covid disruption in multiple cities across China, alongside other challenges including high youth unemployment, difficulties in the real estate sector and a potential global recession decreasing demand for Chinese goods, the country has experienced a drop in consumer confidence in 2022. This can be referred to as ‘decentralised e-commerce’ – social commerce powered by networks of local tastemakers, taking place wherever consumers are spending their time. The intensification of these challenges and fiercer competition in a lower-growth environment, alongside cultural and socioeconomic factors, is leading to an enormous shift in CBEC towards a more diverse, multifaceted future. The barriers to launch for international brands remain stubbornly high, and the core challenges include customer acquisition and the often long wait for profitability after launch. Challengers have come and gone – examples include Kaola, ultimately acquired by Alibaba from Netease in 2019 and now reportedly down to just 20 staff, or smaller players like Secoo, whose rise and fall has been much talked about after a promising start and major IPO. The rise of 232.68 million Gen Z’ers as a driving consumer force is setting new trends in communicating with targeted customers.Ĭhina’s cross-border e-commerce (CBEC) ecosystem has long been dominated by two major B2C platforms: Alibaba’s Tmall Global and Tencent-backed JD Worldwide. Consumers’ purchasing behaviours are continuously in flux and that presents a constant challenge for international brands looking to engage with their customers. With a population of 780 million digital consumers, e-commerce sales hit £2.3 trillion.Ĭhinese consumers are also changing faster than their peers in other markets. Now, platforms like Douyin and Xiaohongshu are disrupting established market leaders like Taobao and JD, writes Jack Porteous from Samarkand GlobalĬhina is the world’s leading e-commerce market, accounting for more than half of the online retail sales in 2021. China has always been a disruptor in the e-commerce and social commerce sectors.
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