Looking at the opportunities within Chinese e-commerce market

By Raymond Cui, Head of Marketplaces at Worldline Digital Commerce

China is the world’s second largest economy and represents a major opportunity for Western businesses thanks to its unique and dynamic system of ecommerce and payments. 

However, since it adopts its own norms rather than complying with those elsewhere in the world, businesses outside China must adapt to these if they want to target the Chinese market because of the trading opportunities this economic superpower presents.

Mobile payments in China continually break records. With 986 million mobile internet users, ecommerce is becoming the dominant force in retail sales. Although the opportunities presented by China are overwhelming it requires insider knowledge to allow businesses to understand the payments ecosystem within the country. It is not easy to keep up with as it has an ever-changing market, making it difficult to stay on top of payment best practices without guidance.

China’s specific digital world

Along with its own social media platforms, China has developed its own payment processors, payment apps, and ecommerce sites that, to a Western audience, may seem like an alternate world. Apps common in the West such as Facebook are actively blocked in China, resulting in local versions such as WeChat, Q-Zone and Sina. TikTok is a Beijing-owned company, which means it is available in China as well as in the West and has around 600 million daily users in China alone.

Alipay which is a popular eWallet with more than one billion users, dwarfs both Apple Pay with just 441 million and Google Pay with 227 million. Alipay is part of the ecommerce system of its parent company retailing giant Alibaba, which provides everything from online shopping to eSports to cloud computing and artificial intelligence. 

While similar to WhatsApp in the West, WeChat also provides services like gaming, shopping and interpersonal payments and you can use it to pay stores, for taxis and even street vendors. It is used by more than 900 million people each month. The app also supports official pages and mini programmes, allowing businesses to access unique features such as user location, scanning offline QR codes on magazines and billboards, and the ability to conduct marketing directly to the full WeChat userbase. Official pages and mini programs represent almost all of WeChat’s flow, and many Chinese consumers are using both Alipay and WeChat, adding another layer of complication to the payments landscape in China.

UnionPay is the largest debit and credit card provider

Alongside AliPay and WeChat Pay, UnionPay is a standard choice at checkouts both on and offline. Importantly, it is also the world’s largest card payment organisation and supplies physical debit and credit cards along with the infrastructure that supports them. So, any retailer looking to access the Chinese market must accept UnionPay, WeChat Pay and Alipay because they are standard choices at checkouts both online and offline.

China also has the largest videogaming market on Earth, with 620 million players regularly engaged with popular games such as Fantasy Westward Journey and Crossfire with 310 million and 660 million players respectively. This makes them far larger than other games played by their Western counterparts, even though they are largely unknown outside of China. By 2023, it is expected that the number of PC gamers in China alone will be higher than the entire population of the United States.

Businesses need to work like a local to access the Chinese market

So, if you want to access China’s extensive online market – it has 25% of the world’s internet users after all – then you cannot work in the same way as you would with US or European consumers. Instead, you need to understand what is unique about China:

• Digital first – China’s ecommerce represents 35% of total sales in China, the highest percentage of any country. In business terms, digital comes first.
• It’s all about mobile: Mobile optimisation is crucial for accessing this marketplace as most ecommerce is undertaken on mobiles.
• Optimise for Chinese search engines: Alibaba, Tencent and Baidu, collectively known as BAT, are the major players in the local digital ecosystem. So, optimise your site for Chinese search engines.
• Localise your offering: Badly optimised or badly translated foreign websites will not be found. Make sure your offering is ready for locals.
   

China was one of the few countries that managed to grow its economy in 2020 and presents a market which is diverse and offers an incredible opportunity to access digital commerce. For Western businesses looking to expand into a new market, China is unrivalled. But you need to be ready to work the Chinese way, so get some expert help and guidance to achieve this.

Raymond Cui (pictured )is Head of Marketplaces at Worldline Digital Commerce and has a 10-year proven track record in payments, achieved during a phase of regulatory and commercial evolution. Raymond specializes in China domestic payments and the burgeoning cross-border transactional landscape. He is familiar with the operational processes and regulations of cross-border payments markets, and has previously facilitated some of China’s most prestigious ecommerce merchants to expand overseas market by optimizing their payment strategies. Before joining Ingenico ePayments, he took different roles at Alipay, UnionPay International, Adyen and PayPal respectively, where he variously held business development, global key account management, and global core payments positions…

Raymond holds Bachelor’s Degree in Engineering, Automation from Beijing University of Aeronautics and Astronautics, and Master’ Degree Business Administration from Fudan University.