12 China E Commerce Market Trends 2022

 

In the past, China was known as the “world factory”, exporting high-quality fashion, sneakers, electronics, and more. Over the last years, this trend has seen a reverse — imports are becoming more and more relevant.

Now, let’s get to it and look at this year’s biggest trends in the China e-commerce environment:

1. China Cross-Border E Commerce

The CBEC sector in China is booming as described above. Alibaba’s acquisition of Kaola in 2019 lead to a consolidation in this segment in favor of Alibaba compared to Tencent.

2. Omnichannel Retail

This cross-channel content strategy aims at improving the user experience and creating better relationships with the target audience across all points of contact. Whether you are shopping online or in an actual store, the transition from one point to the other at any point in your consumer journey should be seamless and easy — online and offline are melting together (O2O).

In particular, China is leading omnichannel retailing in high customer expectations, smart sales assistants, mobile-first, self-service kiosks, and virtual reality / augmented reality. In addition, close integration of consumer payments is creating the best practice example for the whole world.

A real-life example is Alibaba’s grocery platform Freshippo where customers can shop in person (click-and-collect), dine-in, and have goods delivered via online ordering.

3. Lower Tiers

This trend of selling to lower Tier cities and areas in China we already observe in the Chinese social media landscape. Lower Tiers have more money available for shopping (due to lower living costs) and are happy to spend it on consumer goods.

4. Fintech

Financial technology and innovation which aims to compete with traditional methods to deliver financial services are on the rise. In particular, Chinese online banks like WeCash (unrelated to WeChat or Tencent) emerge as startups to bring easy and uncomplicated financial services to individuals and institutions, often incorporating machine learning and AI technology.

For example, WeCash with 130 million users in 5 countries allows individuals to get their credit score straightforward and apply for loans. And institutions can build their income-yielding loan portfolio on this big-data-powered platform.

5. Cryptocurrency

Cryptocurrency miners and users are facing severe regulation in the Middle Kingdom. Same as with social network platforms, a designated Chinese search engine (Baidu), and other China-specific tools and regulations, China is seeking new solutions for their country and market in terms of cryptocurrency.

First introduced as a concept 5 years ago, China is now finalizing the preparation for the release of its DCEP (Digital Currency/Electronic Payments). However, unlike Bitcoin and related currencies, DCEP is government-sanctioned. The government will likely distribute the new currency through traditional banks, making it fully centralized and exactly like traditional paper money.

As China expands its worldwide trade through the belt and road initiative (BRI) and other development initiatives, DCEP has the potential to create significant financial autonomy and less exposure to the US.

6. From KOL to KOC marketing

Key opinion consumers (KOCs) are “normal” buyers who create videos and posts about their own product reviews and recommendations. End consumers are hungry for advice and recommendations from real consumers they trust. KOCs also act as influencers but are more authentic. Relationship-based marketing is on the rise!

Brands that incorporate KOCs into their marketing strategy can benefit from a boost in the brand image and increased sales. Make sure to identify suitable KOCs, as they usually do not have many followers, which makes them difficult to find. A Chinese marketing agency can take care of this for you.

7. Short Videos

Together with live-streaming, short videos and short video apps are conquering the Chinese market. Thus, the line between business and socializing continues to blur. It will not surprise you that more than 300 million Chinese are using short video apps.

Higher Tier areas with middle and higher-income households and individuals as well as a younger audience (under 35 years old) are more drawn to this medium.

8. Group Buying

This trend hasn’t really arrived outside of China yet. Western shoppers may think that the products could have poor quality. Or that those platforms are unreliable and impose hidden costs. Chinese consumers value the significantly reduced prices — particularly lower Tier residents take advantage of the group-buying model.

In the Middle Kingdom, however, group buying is expected to grow: JD.com, and Alibaba are launching their own group-buying functions to challenge Pinduoduo.

9. Social Commerce

This hot new trend, social commerce, is forecasted to reach more than 600 billion dollars globally by 2027. The increased use of mobile devices and social media created social shopping also known as social e commerce.

The “now” consumer follows trends and has unplanned interactions with brand and retail experiences. Shoppers can do so at home, at work, or on the go. This behavior drives the need for new approaches to create a personal and ready-to-buy social commerce experience.

10. Cruelty-Free Products

Until early 2021, animal testing was required by law for cosmetic products imported to and sold in the Middle Kingdom. Since 1 May 2021, this law is obsolete. Animal testing is no longer required for general cosmetics imported into China, as long as they meet certain other requirements like a safety and risk assessment.

This also opens up the market to vegan, cruelty-free and sustainable cosmetics and beauty brands. The UK-based skincare brand Bulldog was the first cruelty-free cosmetics brand to sell in mainland China, imported under the general trade (and not CBEC model).

11. Private Traffic

As a result of paid traffic getting more expensive, brands are seeking alternatives. By setting up exclusive clubs or groups like WeChat groups, brands can communicate a certain lifestyle and the corresponding products.

The advantage of a closed group is that they already consist of loyal customers and fans. And they respond more easily to CTAs.

12. Big Data

This last trend brings all the previous ones together, literally. Big data analyzes massive volumes of information to apply data-oriented marketing in China.

By combining information from online and offline consumer behavior, businesses overcome the limits of space and time. Businesses gain deep insights into the likes and dislikes of their (potential) customers, their movement, and behavior patterns.

For example, Tencent collects and classifies information into different dimensions, which consist of more than 3,000 tags, including basic attributes, social interests, entertainment interests, media preferences, etc.

Keep in mind that Chinese consumers love their mobile devices and use them for everything. Specifically, their super-app WeChat, which lets users pay, play, chat, shop, order everyday services and products, and more. Advertising in China has never been easier and more complex at the same time.