With China among the world's largest e-commerce markets, digital businesses are facilitating cross-border sales between European vendors and mainland consumers.
For anyone involved in e-commerce, China is clearly the country to crack. In 2015, retail e-commerce sales in the Chinese mainland totaled US$672 billion, with 375 million people buying online. Sales are expected to grow to US$911 billion in 2016 (with 423 million online buyers, up 13 per cent year-on-year), US$1.21 trillion in 2017 and US$1.57 trillion in 2018, a rise of 133 per cent over three years.
In September 2016, the value of the online retail sale of physical goods was Rmb2.8 trillion, representing some 11.7 per cent of the total retail sales of consumer goods. Figures from 2015 suggest that the mainland accounted for 50 per cent of global retail e-commerce sales, while almost half of all Chinese consumers had ordered basic items online, such as grocery products. Overall, the same figures show that some 75 per cent of Chinese consumers have used a mobile phone to buy a product.
Not surprisingly, many exhibitors at September’s London E-commerce Expo were already involved in the Chinese market, including German software provider SAP Anywhere. Kevin Reinhardt, Product Strategy Lead, said that his company had a China connection from the day it launched in October 2015 with a tie-in with state-owned telecommunications giant China Telecom.
"When you look at the stats for China, that really is the country to go for,” said Mr Reinhardt. “If you figure out that market, you pretty much have the other regions sewn up. In China, they're mobile first and they're massively on social, which is where we're going in the West. So if you've got a product that works for the Chinese market, you're ahead of the curve."
According to Mr Reinhardt, SAP Anywhere was set up specifically to cater to small businesses. "We offer a cloud-based solution, allowing retailers or service companies to manage their e-commerce, inventories, digital marketing and CRM, customer support – everything essentially and all through one platform. A small business might have five or six independent systems. We consolidate everything so that the information flows from one system to another, simplifying the workload."
“In China, they're mobile first and they're massively on social, which is where we're going in the West. So if you've got a product that works for the Chinese market, you're ahead of the curve."
Another company heavily committed to China is Avenue 51, a London-based specialist in the mainland's e-commerce sector. It works closely with 51 Parcel, a sister logistics company with a focus on shipping from the United Kingdom to China.
Established two years ago, Avenue 51 claims to account for 50 per cent of all e-commerce activity between the UK and China, shipping about 50 tonnes of goods a day. In its second year, it has turned over more than £15 million, up from £3 million in its first trading year.
"We specialise in British products sold on Chinese platforms, such as Alibaba and VIP,” said Chao Liu, the company's co-founder and Chief Commercial Officer. “In the case of Waitrose, for instance, we sell plenty of its wine into China. The product is placed on Alibaba and Chinese consumers buy it there. They pay for it, then the order comes from Alibaba to the Avenue 51 database. We send that information to Waitrose and they do the pick-and-pack, and send the wine to us. We then send it on to the freight-forwarders for distribution in China."
According to Mr Liu, many European brands see selling into China as a huge challenge. "The market is massive, but there are many hurdles,” he said. “All your product information has to be in Chinese, plus the way that Chinese consumers want to see products displayed is totally different to what Europeans expect. Culturally, that's something of a hurdle.
"In terms of political hurdles, you're looking at how to get it customs-cleared and how to pursue payments – things that a lot of people find difficult. Even when you try to integrate with the Chinese platforms, a lot of their IT guys don't speak English. It can take more than year to achieve any real level of integration."
Among companies looking to expand into China is Channel Pilot Solutions, a German online multichannel marketing specialist. Launched in 2013, the company has 60 employees and some 600 clients.
"A merchant – it could be a brand manufacturer or a retailer – wants to sell products through different sales channels, not only on its website,” said Ramin Rezai, its UK Country Manager. “What they find is that when selling on Amazon, eBay and the like, there are many requirements that need to be met, with each category set up in a different manner.
"Instead of setting up their feeds to multiple channels, they can sign up to a service like Channel Pilot. This means they can give us just one set of data, and we're able to list them on different channels. We're also able to optimise their data so that it's presented in a manner that attracts more qualified traffic. At the same time, we can also assess how the products are performing. If a product is generating too many wasted clicks, our solution would be to remove it from the listing, making sure that only the top 20 or 30 most-clicked products are listed."
The company recently expanded into North America and currently supports more than 2,000 sales channels in up to 40 countries. "China is one of the markets we want to expand into,” said Mr Rezai. Selling abroad is always a great idea and we can help companies prepare for it, with regard to translation, logistics and tax. We want people to become more aware that it's not just a question of listing a product and hoping it sticks."
UK e-commerce software specialist 247 Commerce has seen greater interest from mainland and Hong Kong online vendors.
Typically, a vendor in China or Hong Kong can use 247's cloud-based software to log in regardless of their location, and then manage the complete e-commerce process. "That includes the listings from all the channels, downloading the orders, processing the orders from eBay and similar market places and competing with other similar businesses,” said Consultant Raj Madabushi.
"They can also manage the stock control and inventory, warehouse management, supplier integration and so on. We take the feeds from the suppliers and we can load the inventory into the system. Once it's in the system, with the click of a button, you can put that inventory into any of the channels you want to sell on," said Mr Madabushi.
Another convert to the Magento cause is Lewis Sellers, Managing Director of Harrogate-based Pinpoint E-Commerce. Launched six years ago, Pinpoint is a full-service digital agency specialising in building websites and the Magento e-commerce platforms.
"When operators move into e-commerce, they need to plan for future growth,” said Mr Sellers. “You have to choose your platform wisely, always bearing in mind whether you need to scale quickly or not. Magento scales from small to very large, servicing such retailers as Nike and Mothercare – businesses doing huge volumes. Other platforms may not be quite so flexible."
The motto "think global, act local" resonates in the world of e-commerce, including with Poland’s WebInterpret, a business specialising in helping companies sell internationally through localisation.
"We translate and localise people's products for international sites,” said Eva Kondratowicz, the company's Customer Care Team Leader. “Our clients have their shops on eBay or Amazon or their own online shop. We take this information, translate it and list it on an international site, creating a mirror image of their shop.
"All they have to do is manage their original domestic shop and we translate all the changes – the prices, the stock levels, the titles and so forth. We also optimise the international sites, using search keywords that are most popular in a given country.”