In Latin, Sina means China and Orbis, the World. Our mission at Sinorbis is to connect Chinese customers with the rest of the world…
For those who have worked with me, it is no secret that I have always been fascinated by the huge potential of the online Chinese market.
It started 10 years ago through my interactions with e-long, the joint venture that Expedia once had in China and continued more recently when I was global leader of HotelClub.
Throughout the years I have studied, analysed and worked with this market. I did interviews about it, wrote articles about it, and even led the launch of Orbitz Worldwide's operations on it.
The picture below on the left was taken just 30 years ago. Back then, Shenzhen (situated just across the border from Hong Kong) was a small fishing village with a population of about 25,000. Today (picture on the right), Shenzhen is an ultra-modern megalopolis with a population above 10 million.
This is a good representation of the growth the region has experienced over the last few decades. If you had been in the region ten years ago, you wouldn’t recognize it today.
Recently, during one of my numerous trips to China, Beijing was a reminder of the two faces of Chinese growth: activity was booming, but the city was just undergoing one of its worst days in terms of pollution. Another example of this amazing growth: according to calculations by Vaclav Smil,
China put more concrete into its roads, factories, bridges, and buildings in the three years between 2009 and 2011 than the US put into the infrastructure that it built during the entire 20th century!
The growth of the Chinese online space over the last 7 years has also been mind-boggling, allowing the country now to have the largest online population in the world. With an estimated 668+ million internet users residing in China alone, it’s easy to see how the country made AU$620 billion with 50% year-over-year in online sales in 2014.
As incomes rise and more and more of the country’s consumers turn to the internet to purchase products and services, China’s share in the global e-commerce market is only expected to grow. As the world’s largest online market keeps getting bigger, the opportunities available for international companies looking to market their products in China will increase as well.
Mobile usage has been one of the biggest contributing factors to the rise in China’s online sales. Of China’s 640+ million internet users, 89% of those users access the internet through their mobile devices, compared with only 27.5% of Australian internet users choosing to use the internet through mobile devices.
But it doesn’t end there. Even though China’s new internet user growth has slowed down over the last year, digital analysts are still expecting China’s internet population to be double that of the United States in just two years. With a population of 1.39 billion in China, compared to the US’s 318.9 million, this is to be expected; however, the rise in internet usage has been further propelled by the Chinese government’s minimum wage increase of 11.4% for major cities such as Beijing and Shanghai. Increased incomes lead to increased spending, especially in the technology sector.
Whilst the growth rate is exceptional, e-commerce is still only a developing industry in China
There are a huge number of online shoppers; penetration however is much lower. In 2013, only 49% of China’s internet users chose to shop online; however, that number is steadily growing and reached 55.7% of internet users in 2014 and Chinese internet users have been found to be quite easy to convert to online shopping.
Chinese consumers fear the same things western consumers did in the early days of online shopping. Fraudulent merchants, credit card fraud, counterfeit goods, poor return policies and lack of credibility are all in the back of customers’ minds. These fears mean that e-commerce businesses, especially those overseas, need to work hard to develop that trust in order to connect with Chinese consumers in a way that drives sales.
Chinese consumers typically distrust traditional advertising and news sources, preferring to seek the opinions of online reviewers and peers on social media instead. Item-based reviews and merchant feedback ratings are the top two critical factors for online shoppers making a purchase decision – 71.1% of online shoppers chose item-based online reviews, and 62.3% chose merchant feedback ratings in 2014 when making their online purchasing decisions. Over 40% of online shoppers in China post product reviews online, double that of online shoppers in the US. Chinese social media has a greater influence on purchasing decisions for consumers in China than anywhere else in the world, making social media marketing an essential marketing tool for any business seeking to tap into the Chinese market.
What’s more, although the Chinese market is huge, it is also one of the most difficult to do business in. Its unique cultural difference and online ecosystem require specific knowledge and web infrastructure in order to be addressed properly: for years the internet in China has been regulated by what we describe as the Great Firewall. China has been blocking online searches of politically sensitive terms, smothering embarrassing news events or simply access to most social networks like Twitter, Facebook and YouTube. Over all these years, this confined environment has favoured the emergence of a parallel online ecosystem unknown to traditional marketing agencies.
The Chinese e-commerce revolution has begun and opportunities for companies and organisations looking to tap into the market are ever-increasing. Success in this rapidly growing market, however, is not a given. Understanding the unique Chinese online buying behaviour and ecosystem is essential for any business determined to succeed in China and that’s why we have decided to launch Sinorbis.
We want to connect Chinese demand with the rest of the world through our comprehensive range of online products and services.
