Useful Resources

China's E-commerce Market - Get One Step Closer
This white paper looks at the key opportunities and challenges that retailers need to be aware of before entering China’s dynamic online retail market. It also includes a useful checklist that pinpoints the practicalities involved in establishing a successful cross-border sales channel - read here

China has become one of the world’s most important retail markets, and there are many opportunities for UK companies to take advantage of the ever-increasing buying power of China’s middle class. Currently there is especially high demand for quality premium brands from high street to heritage, and for made-in-Britain craftsmanship across food, fashion and entertainment. 

However, if British companies are to succeed in China they must carefully plan their business model and execute their plans effectively. In the "Routes to Market" section of CBBC's recent White Paper into the Chinese Retail Market, companies can find the main options for accessing the market and how to position themselves suitably with Chinese consumers. 

The most important story in Chinese retail in recent years may be the adoption of e-commerce. Sites such as, Taobao/Tmall and others have proliferated, especially as a result of recent changes to import regulations and the development of new free trade zones and parks - although Alibaba remains dominant with around 85 per cent of the market. An effective e-commerce strategy is now vital to UK exporters hoping to reach a large number of potential customers, especially those located outside China's major cities.

Fashion & Luxury Goods

The increasing number of young, wealthy Chinese shoppers from the major cities has attracted most global retailers to set up a significant presence in China, with notable examples including Zara, H&M and Uniqlo. This competition presents a considerable challenge to British companies, but the UK brand in general is strong and the Union jack has a ubiquitous presence on clothing, accessories and even cars. 

China now has 2.7 million high-net-worth individuals and an expanding middle class, which has driven a growing market for luxury goods. Watches account for around 30 per cent of spending on luxury items, and 30 per cent of luxury purchases are bought as gifts. Although the market has boomed, luxury retail has recently become politically sensitive as the result of a ban on government officials receiving gifts. The portfolio mix has thus changed to reflect a more conservative (and risk-averse) political climate, and a shift towards lower-profile luxury goods consumption in the business world.

Key locations

Online has become an important starting point for foreign companies wishing to enter the retail space in China across all consumer segments, and not having a presence on Tmall or other online locations will limit your access to Chinese consumers.  

Offline, the tier-one cities (Beijing, Shanghai, Guangzhou, Shenzhen) remain the most important starting points. Mainstream and luxury consumers are concentrated there, although according to a 2015 report by CBBC, the proportion of middle-income consumers represented in these cities is predicted to fall to 15 per cent by 2022, as regional cities take on increasing importance in the sector. 

Second- and third-tier cities and even rural locations are becoming a key battleground for national retailers and in particular the online players, who are building national-level logistics infrastructure in order to deliver a consistent level of service to more remote destinations. This logistical development, along with the rapid adoption of mobile telecoms and m-commerce, is likely to vastly increase the number of consumers able to access foreign brands online.

Introduction to China's E-Commerce Sector

Useful Link

Check out the helpful China Passport for E-Commerce, prepared by IMRG (Interactive Media in Retail Group)

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