How to Sell B2B Online in China
Last week we were in an event in Valencia organized by our partner, the Valencia Chamber of Commerce, in which we shared our knowledge about the B2B online business development in China in front of a full auditorium.
We were glad to share the “stage” with 2 of our best clients:
– Amvos Consulting: leading digital marketing agency in Europe and South America
– SoloStocks: best B2B online platform in Spain currently present in over 12 countries in Europe and South America
And that is what we talked about:
– WHICH ARE THE MAIN ONLINE B2B PLATFORMS IN CHINA?
As we can see in the top image chart, the clear winner in the B2B Chinese market is Alibaba with its domestic platform 1688.com which absorbs 37.78% of the market share as per April 2016, followed far behind by Global Sources (5.45%), HC360 (3.92%), Made-in-China (2.23%) and DHGate (1.77%).
– Alibaba.com/1688.com: Alibaba.com is the leading platform for cross-border wholesale trade, serving millions of buyers and suppliers around the globe and 1688.com is the main B2B marketplace for domestic China trade among small and medium enterprises.
– Global Sources: It is a leading B2B media company and a primary facilitator of trade with Greater China. More than 1 million international buyers, including 95 of the world’s top 100 retailers, use these services to obtain product and company information to help them source more profitably from overseas supply markets and generate sales leads and win orders from buyers in more than 240 countries and territories.
– HC360: is the third most important domestic B2B e-commerce operator in the People’s Republic of China. With its professional information services and advanced internet technologies, it has established a reliable demand and supply platform for SMEs, and has been providing them with complete business solutions over the past 22 year.
– Made-in-China: was developed and is operated by Focus Technology Co., Ltd. Focus Technology, is a world leading B2B portal, specializing in bridging the gap between global buyers and quality Chinese suppliers.
Since China’s policy of reform and economic openness, the B2B traditional model unlocked unprecedented levels of growth and development. With the Internet booming and the transition of trade models taking place, most industries have enrolled in the online B2B revolution to develop their brand. For this reason, hundreds and hundreds of new B2B platforms are born trying to differentiate from each other and creating that way an unparalleled war. And we see new attempts to get to the top of this pyramid, day in and day out, as they all want to get a piece of the huge cake.
– BUT, WITH SO MANY OPTIONS… HOW CAN I CHOOSE THE RIGHT PLATFORM?
We list for you the key factors that should be taken into account in order to select the best platform for your brand to sell your products in a business-to-business model in China:
– Establishments costs: Lower implementation costs through simple installation and integration and unproblematic expansion options. The vast majority of wholesale online trading platforms in China are “free” to use. You can create your own shop and list your products. That way you have your own B2B storefront in China; but how will your products get noticed within the others? All these places provide different visibility packages. Call it gold member, golden supplier or whatever other name you can imagine; the important thing here is to compare these packages and what is exactly what they offer.
– Volume: What is the number of suppliers and competitors? What is the traffic volume generated in the platform? In this area, 1688.com is the clear winner from both sides. Anyway, there are also other vertical platforms that might be worth checking.
– Chinese partner: In order to create a shop and list your products in any Chinese domestic B2B platform, you will need to go hand in hand with a Chinese partner as you cannot use your foreign business licence to sell products within greater China. Here it appears the classic dilemma: Chinese partners are usually very opaque and don’t like to share any kind of information. 2 Open, as a Chinese and Spanish company, can be the right Chinese partner with modern European-style management and creates a totally transparent relationship with its customers. We want to succeed with you and not the other way around.
– Promotional tools: It is important to analyze which actions can be done in order to get more traffic to your shop. The most of them offer performance marketing actions in a CPC or CPM model, both for keyword optimization and display actions. The prices are usually high and a study should be done to assure that the ROI is the right one.
In 2 Open, we usually recommend to do a market research that can lead us to take the best informed decisions: channel/s, range of prices, target audience, marketing budget and promotional efforts, potential return of investment, etc.
In another post we will show you how to optimize traffic within 1688.com to obtain more leads, so keep checking our blog and contact us if you have any questions. 2 Open can help you succeed in the Chinese B2B online world!
Digital Marketing in China. Where do I start?
Hosted by Tolmao Group, the networking event “Digital Marketing in China. Where do I Start?” took place on January 2016 in Shanghai. Luis S. Galán (the CEO of 2Open) was invited to talk about Cross-border E-commerce and the benefits it can bring to a company. Although it is called a networking event it also features educational elements in order to provide a better understanding on how to take advantage of business opportunities in China. Where do I start? How does cross-border e-commerce really works? Is is really growing? These were the questions on everyone’s mind before Luis stepped onto the stage.
Luis Galán has a deep understanding in the matter, due to the services that 2Open provides, he deals with e-commerce and all of its subcategories on a daily basis. The talked focused on the process of cross-border e-commerce, the real current situation about it and opportunities that might come with it. The crowd showed a lot of interest, it seems that this is an area that everyone is trying to implement in their own businesses and so there were a lot of questions from the audience.
- What are the procedures to do cross-border e-commerce in China, especially how can i deal with payments?
- How can I start social media marketing for a beginner?
- Comparatively, what are the digital marketing advantages over traditional marketing?
These were some of the questions asked by the audience and they were not left unanswered. After the talk, the networking event continued and some people approached Luis to ask about experiences and tips on the topic, the place was filled with kind, ambitious, and knowledge-seeking people that are looking forward to engage in the way business works in China.
Some of the answers to these questions have also been covered by 2Open in past articles from our blog, however if you are looking for any specifics or have some questions related to our services feel free to leave a comment. We will be more than happy to help you with any enquires you might have, and who knows, we might just dedicate a whole article to your question.
General situation of cross-border e-commerce in China
General situation of cross-border e-commerce in China
2014 is called by many the year of beginning of cross-border e-commerce in China. Traditional retailers, domestic and oversea e-commerce giants, start-ups, logistic service providers and distributors have all joined this battle trying to get a share of the cake.
No doubt this is a time of challenges and opportunities, getting to know the current situation is helpful to forecast a slice of the future.
So what do we know about the positive factors that lead the cross-border e-commerce in China continue to grow?
A window period of dividend policy
With the official documents N°56 and N°57, issued by General Administration of Customs of People’s Republic of China (PRC), the cross-border e-commerce has finally been authorized at 2014 in China. The”6+1” testing cities (Shanghai, Chongqing, Hangzhou, Ningbo, Zhengzhou, Guangzhou, Shenzhen) have since then enjoyed the tax reduction for cross-border e-commerce, which means products purchased through cross-border e-commerce channel will only be charged with personal postal articles tax, instead of the “customs + added-value tax + consumption duty” for common import trade. Thanks to policy incentives, which is aiming at bringing the oversea consumption back to mainland China, cross-border e-commerce has witnessed rapid growth.
Huge potential of customer needs
Nielsen recently issued the China’s E-commerce Industry Development and Hangzhou Index White Paper, suggesting that “affluent and well-educated young people make up the majority of cross-border online shoppers and the cross-border online shopping features at low frequency and higher spending per order compared to domestic online shopping”.
According to the statistics from General Administration of Customs and Research Center of China’s e-commerce, the size of transactions and the user’s volume have tremendously increased in these couple of years. The size of transactions grows from ten billion to hundred billion and some predictions show that it will reach trillion level in 2018.
Not everything is favorable, we are still facing many challenges
The tax reduction policy will not last for long because the government has to find a balance between the traditional trade and the cross-border e-commerce. The uncertainty of policy may affect every segment of cross-border e-commerce in China.
The immaturity of logistics and customs clearance system, the slow process makes the after sales services can’t be guaranteed. In the future shopping experience needs to be bettered with a smoother customs’ process.
The possibility of directly signing a contract between a foreign brand and a Chinese cross-border e-commerce platform is remote, therefore cross-border e-commerce platforms often use combined supply chain, which is unstable and will lead the price of product hard to be controlled. The one has the ability to get through each segment on the supply chain will be the first to take the market.
Currently, not a single cross-border e-commerce platform is widely accepted by customers, major player and start-ups are basically at the same starting line. The early stage development relies more on policies, lower price, richness of products, but as time goes, the competition will be back to the retail level – brand, supply chain and customer services.
We do still have the possibility to change the game, don’t you think？
Check the original Chinese article here