March 7, 2021

Ecommerce Opportunities with China

Dr Peter Mowforth

I spent time last week with some Chinese ecommerce traders discussing the technical mechanics of online sales between Europe and China. What was interesting was to compare much of the discussion with the prevailing views held by our own politicians who simply see the modern silk road as a mechanism to sell our own brands into China. We are all being encouraged to export things made here to somewhere else.

Business people tend to approach things from a different angle. You try to get as much information as you can and then work out how best to make the most amount of money in the easiest way possible.Selling successfully into the Chinese marketplace is not straightforward. To start with, the things that we think will sell well easily turn out to be flops while items that we might turn our noses up at can be big hits. There are clearly cultural differences that need factoring in. Selection of the right products that people want to buy is certainly the place to start.From The UK/European perspective, selling into China can initially seem complex. In practice it’s not. In many ways it’s a lot simpler than selling in ‘the West’. Most sales take place on marketplaces such as TaoBao, Tmall, JD or, increasingly, embedded within social platforms such as WeChat. While the intersection between ecommerce and social media outside China has only represented a small part of online trade, within China it’s now mainstream.To sell things via ecommerce into China requires an import broker and then some people who can help work with you to choose the right products and promote them and provide feedback including optimising prices. All relatively straightforward then.Things get interesting when talk with the Chinese business people broadens out. While trading in China may seem complicated to some European businesses, it pales into insignificance to how complicated trading across Europe appears to the Chinese. Instead of a handful of massive channels each with a fairly standardised mechanism for marketing and promotion, most European ecommerce is dominated by hundreds of thousands of stand-alone websites each with their own complex methods of promotion that involve SEO, newsletters, paid marketing, social, affiliate marketing etc. You also have a massive network of marketplaces (Amazon, eBay etc) many of which are country specific. Many of the stand alone ecommerce websites then have multi-channel feeds to these marketplaces. You are also faced with different parts of Europe operating different currencies while the issues of tax, duty and legal compliance are, in practice, major handbrakes to trade (and remain so). All of this is combined with different versions of search engines operating in different countries while all levels of marketing, promotion and service use a multitude of different languages.Given the complexity, it’s inevitable that the pragmatic Chinese traders shrug their shoulders and say “OK, is there any way that an organisation that’s based here able to do all this for us?”. This is the point at which you crank the numbers and work out that the best business opportunities might be to run the silk road in the opposite direction to that preferred by the politicians. Go back two hundred years when it was the Scots who represented many of the most enlightened and internationally minded, entrepreneurial, outward looking, business people around and I think I know what they would do.

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