in e-commerce, Globalization

e-commerce in China

In an era dominated by the Internet, you can learn about everything that is happening in the world while staying at home. You can buy whatever you like from anywhere, and you can even sell your products internationally through e-commerce. In recent years, we have witnessed the power of Internet and innovation in the vigorous development of  e-commerce in China. According to the information released by the China National Bureau of Statistics, China’s national online sales revenue was 5.16 trillion RMB in 2016, which was 26.2% higher than the previous year. According to a report published by China Internet Network Information Center (CNNIC), China’s online shopping users reached 467 million by December 2016, up 12.9% year on year. Among them, spending from online shoppers using mobile devices reached 441 million RMB which is a 29.8% increase year on year.

For e-commerce in China, the competition for firms within the domestic market has become increasingly fierce, while the overseas market remains full of potential. For example, while Internet penetration rate has increased rapidly in some countries and regions such as Russia, Brazil, and Southeast Asia, local e-commerce in those areas is still relatively low, giving Chinese e-commerce companies the opportunity to enter the market. Many Chinese e-commerce giants such as Jingdong Mall, Alibaba, and VIP Shop, are utilizing the Internet to accelerate the pace of globalization.

According to the latest data from the third-party market research institutions, 46% of the 147 large e-commercial platforms in China have already launched overseas businesses, and a further 34% of them are planning to in the future.

With the continuous improvement of global technology, e-commerce is being faced with unprecedented development opportunities. However, is everything going smoothly in the process of globalization? What are the problems they are facing?  How far away is China’s e-commerce from becoming truly global? Let’s take a look at some examples on how Chinese businesses are faring in international markets.

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AliExpress and e-commerce in China

The Alibaba Group has been dominating China’s e-commerce market. In order to help Chinese medium-sized and small enterprises to achieve cross-border sales and cultivate a large number of Chinese brands, AliBaba’s global online trading platform, AliExpress, was created. Intended for the global market, this platform became the international version of “Taobao”. AliExpress came online in April 2010 and has now extended to more than 220 countries and regions, with the number of overseas buyers exceeding 100 million. Although AliExpress is popular in Russia, Brazil, Spain, and other overseas markets, their localized services have not yet fully supported their international communication needs. As the product descriptions are all translated using machine translation, customers are sometimes unsure of what they are receiving, and this can lead to them being unhappy with the product.

Jingdong Mall and e-commerce in China

Jingdong Mall, one of China’s biggest e-commerce platforms, began its internationalization in 2013. In order to go global smoothly, Jingdong set up a separate overseas business department, and identified Russia as its first target market. The independent Russian site was officially launched in June 2015; however, the operation of the site was not ideal and is at a standstill now. The Jingdong Indonesian site, however, was established in the same year and is currently in steady development. Liu Qiangdong, the founder and CEO of Jingdong, said Southeast Asian markets had great potential, and he speculated that Jingdong Indonesia would become the biggest e-commerce brand in Indonesia and eventually the whole of Southeast Asia.

Bike-sharing companies 

In the transportation industry, some newly rising companies such as Mobike, Ofo, and Bluegogo, have set off a bicycle boom with the innovative model found in some cities in China. Users can download the APP, scan a QR code on their phone to unlock bicycles, and cycle them around the city. Most of these bike-sharing companies were established last year, and have expanded to dozens of cities in China in just one year. They also attracted hundreds of millions of dollars of capital, and have begun to aim at overseas markets. For example, Bluegogo bicycles entered San Francisco in United States earlier this year and Mobike and Ofo have both started operations in Singapore with the intention of entering the European and American markets in the near future. However, none of them have a localized European or American version of their APP for overseas consumers. It is difficult to ensure a good user experience with only a translated interface. In order to ensure customer satisfaction, these APPs must consider truly localizing their content and user experience.

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Although the overseas market is attractive and China’s e-commerce companies have made some achievements overseas, in order to become bigger and stronger, they must overcome language barriers, cultural differences, and other potential issues. According to a survey conducted by the Common Sense Advisory, 52% of people said they will only buy products online with localized content and information. Some of China’s cross-border e-commerce companies are realizing the importance of localization, but there is still a long way to go before Chinese businesses achieve true globalization.

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