China, by far the largest economy of Asia is gradually shifting from investment-led growth towards consumption. With slower growth forecast and changing government priorities it is important to know where your target audience is positioned and where the biggest opportunities lie.
A sub-sector tempting to foreign investors because of its increasing demand is e-commerce, according to Atradius, citing data from Frost & Sullivan.
According to the research firm, 57% of B2B sales decisions are formed online and the digital trend will continue its evolution, with worldwide B2B sales projected to reach $12 trillion by 2020 (up from $5.5 trillion in 2012).
China has the largest e-commerce market in the world, with B2C sales growth of 25% annually. There is even a dedicated annual online shopping day – ‘Singles Day’ – which in 2015 alone accounted for the equivalent of EUR 12 billion in sales.
Among the most searched for items online and the fastest-growing import products in China are electronics and designer clothes.
With e-commerce forecast to maintain its strong growth and a consumer base particularly inclined towards online transactions, companies trading with and in China should consider selling online.
However, Atradius notes, investing in online platforms and appealing to a Chinese audience requires more than dealing with a language barrier.
Foreign companies hoping to make their mark in e-commerce or other sectors in China need to understand the market they are looking to establish themselves in and the rules applying to cross-border trade.
To help exporters maximize their chances of business success in China, Atradius Credit Insurance has published the ''Trade Successfully with China'' guide which lays out the 10 principles for export success to China:
- Keep up-to-date with China’s import regulations
- Make most of China’s Free Trade Zones
- Think Chinese
- Comply with Chinese competition law
- Protect your intellectual property (IP)
- Choose the right payment method
- A local presence can increase your sales
- Consider selling online
- Choose the best course to resolve disputes
- Make sure you have a safety net to protect your credit sales