Close this search box.

GUEST COMMENT Overcoming the Great Wall of China’s digital commerce market

This is an archived article - we have removed images and other assets but have left the text unchanged for your reference

Tapping into the Chinese market has long been an ambition of Western retailers. However, it is only in recent years that the purchasing power of China’s 1.3 billion-strong population has caught up with – and even surpassed – Western commercial appetite.

While barriers to the Chinese market still exist, they are quickly being eroded. Especially online, retailers from Amazon to Zara as well as many other foreign brands are targeting the country.

So, is now the time to sell to China? Yes, as long as you’re smart about it. Some of the biggest challenges retailers will have to overcome to win this market over will be related to:

Payment methods

For British retailers to have success trading in China it is essential that they consider, not only language and currency, but also local checkout and payment preferences. China is no different to any other country in that shoppers there generally favour the buying methods with which they are familiar. Results from our latest Global Online Shopping Survey have revealed that 59% of Chinese shoppers buy with e-wallets, 22% use credit cards and 12% choose debit and bank transfers. Failure to cater to consumer preferences will likely result in loss of sales.

Distribution and logistics

Tailoring payment options to local palates is simply good practice, but the problem of distribution is altogether more unique to China. The reasons for this are twofold. Firstly, for goods to clear customs buyers must provide official documentation. Though this may seem straightforward, the process is complicated by the multiple channels through which goods entering China can be cleared. Different channels carry different duty and tax rates; formal clearance, for instance, will incur higher import costs than clearance for personal consumption.

The second challenge of distribution is the physical delivery of goods. The speed and effectiveness of delivery services vary massively across China’s 23 regions and outside of the urban centres coverage is sporadic. Though an increasing number of shoppers are able to buy from foreign retailers thanks to the spread of the internet and the growth of m-commerce, not all of these consumers benefit from speedy delivery.

It is vital that retailers have a proper understanding of these costs and regulations before selling to China, as well as a solid logistics plan to guarantee coverage to all the country. Partnering with the right companies can go some way to meeting these expectations, saving a lot of time and money for retailers researching by themselves and carrying our trial and error with different local couriers.

Brand awareness

Many of the brands trading in China owe their success to such partnerships. Those that have transitioned most effectively have gone one step further, selling through marketplaces like and Tmall. This makes good business sense; 61% of Chinese shoppers buy most of their international goods from marketplaces such as this, but often only larger brands can afford to access them. Not all retailers have the resources required to become a super brand as Sainsbury’s has done following its sales on Tmall. Creating good brand awareness in China without this level of financial might can prove difficult.

Good marketing strategy can help, effective use of social media in particular. 20% of Chinese shoppers use social media to find the items that they go on to buy according to 2016 Pitney Bowes Global Online Shopping Study. Yet, not all popular social media platforms at home will be the most used abroad.

Some Chinese do use Facebook and Twitter, but they are officially blocked in the country. Instead, platforms such a WeChat, Sina Weibo and Tencent QQ — which boasts almost a billion monthly users — are preferred. It is not a case, therefore, of simply applying existing social media strategies to a new context, but rather of developing new social media strategies for entirely new markets.

Connecting with the growth of consumerism in China

The barriers to selling in China are not insurmountable. Prospective patrons are not passively awaiting the arrival of Western brands but are actively seeking them out. There is a willingness on both sides to navigate the walls to trade. The emerging middle-classes, with access to the internet and mobile-commerce, have driven consumer culture in the country and transformed China into one of the world’s largest markets. There is no better illustration of this than ‘Singles Day’.

Initially conceived in response to Valentine’s Day, Singles Day quite literally represented a day for the single people of China. It was capitalised on by Alibaba Group in 2009—China’s answer to Amazon—and the practice of celebrating one’s ‘singleness’ by buying oneself a gift was extended to the population at large. Singles Day 2016 saw Chinese consumers spend a record $17.8bn (£11.4bn).

Accelerating the growth of consumerism in China is the increasing tendency of Chinese people to holiday abroad. A 2016 Globe Shopper report found that 81% of Chinese holidaymakers plan to shop in the countries they visit. On average, each plans to spend €3,544 (£2,987), and globally these travellers account for almost a third of global tax free shopping sales.

A study by Pitney Bowes further found that consumers who shop abroad tend to revisit the same stores online when they return home. Of the Chinese consumers consulted during this study, almost two-thirds said that they made an online purchase from a foreign retailer after visiting their stores during their travels.

Chinese consumers spent an astonishing $672bn (£504bn) online in 2015, representing 19.6% of China’s total retail sales for that year, and the highest e-commerce spend of any country according to eMarketer. This number is projected to rise to $1,568bn (£1,177bn) by 2018 when online sales are expected to account for 28.6% of all retail sales. The UK is the fifth largest overseas market for Chinese shoppers and is thus well-positioned to satisfy some of this demand. Already British retailers supply 11.2% of all goods purchased by Chinese consumers.

So, is it worth it?

Though there are still significant barriers for Western retailers hoping to sell to China, the greatest wall—the absence of a consumer-base hungry for Western brands—has been well and truly dismantled. This year Chinese shoppers spent more money on Western products than ever before and next year they’ll likely do the same, and again the year after, and the year after that.

China is a difficult market for any retailer to make inroads into but working with the right partners can make navigating the remaining barriers to trade much simpler. Companies like Pitney Bowes are able to eliminate some of the major difficulties that brands may face when tackling the market on their own, mitigating the risk while retaining the reward. And the potential rewards are undoubtedly great. Though China remains one of the most difficult markets to tap into, it now also represents the most lucrative.

More information and insight on online shopping habits and the Chinese market, as well as other territories, can be found in the Pitney Bowes 2016 Global Online Shopping Study.

Georges Berzgal is Pitney Bowes vice president EMEA, global ecommerce

Read More

Register for Newsletter

Group 4 Copy 3Created with Sketch.

Receive 3 newsletters per week

Group 3Created with Sketch.

Gain access to all Top500 research

Group 4Created with Sketch.

Personalise your experience on