Retailers looking to expand e-commerce sales in China must treat the market as a new project, according to Ken Ardali, director of international e-commerce business development at Alibaba Group, China’s leading online retailer.
Speaking at The Delivery Conference, organised by Metapack, Ardali said the rules were different to those in the West.
“For the Chinese, shopping online is a lifestyle”
“For the Chinese, shopping online is a lifestyle,” he said. “They like learning about stuff.”
Chinese shoppers also enjoy sharing information with their friends and look for peer approval on their purchasing, said Ardali.
Prices in China are low but price is less important, he said. Instead, shoppers are looking for novelty. Authenticity is also important.
Brands are relatively new in China. According to Ardali, that represents an opportunity since there is currently little customer loyalty for brands.
Marketplaces dominate the e-commerce landscape in China, which has a population of 1.3bn people and 300m online shoppers.
Alibaba Group, which operates the market-leading Tmall.com site, generates $300m in general merchandise volumes (June 2014), has 14.5bn annual orders, 300m active buyers, 8m sellers and ships to 190 countries.
Ardali told delegates how the Group has established an ‘eco-system’, which put marketplaces – B2B and B2C platforms – at the heart; supported by logistics, finance, marketing, digital entertainment and social networks.
Tmall.com features 40,000 brands including many European and American labels, which effectively operate web stores on its platform and retain their own identities.
“It’s a manufactured shopping day…”
Ardali highlighted the importance of Singles Day ( 11 November) in China. “It’s a manufactured shopping day and it’s become their Christmas so to speak,” he said.
Last year Alibaba sold £6bn in one day, equivalent to 175,00 orders per minute.
The first domestic order was delivered within 15 minutes of the order being received and the first cross border delivery within two hours.
“It shows you what’s possible,” Ardali said.
Ardali advised delegates check out Tmall Global as a “low cost, low touch” way of testing the market in China and recommended its Alipay service for distance sellers.