Happy Singles Day: China is open for business
For merchants looking to sustainably grow their revenue and future-proof their business in an ever-increasing competitive landscape, there is almost no better decision they can make than expanding beyond their domestic market.
There’s no doubt that cross-border trade is already a driving force in the global marketplace, with about half of online shoppers reporting in a 22-market global survey (Ipsos, 2014) that they buy from other counties around the world. What’s even more remarkable: cross-border shoppers are valuable customers to court as they spend nearly two times more than those who only buy online domestically. The same survey found that cross-border shopping is only expected to grow globally – especially in emerging markets in the Asia-Pacific region and Latin America – with 25% reporting that they plan to shop cross-border more often over the next year.
The China Opportunity
The data makes it abundantly clear: it’s worth it for merchants to invest in reaching these cross-border customers – and for US businesses specifically, nowhere is this more true than China. A 2015 study by Nielsen found that the US is China’s top cross-border shopping destination, with 14% of online shoppers having purchased from the US in the past 12 months – putting it ahead of Hong Kong, Great Britain, and Japan.
The phenomenal growth in the Chinese online sales market – projected to grown by more than 20% in 2016, with over half (52%) of all Chinese cross-border shoppers planning to begin or increase international shopping, according to the same Nielsen report – is an undeniable opportunity merchants shoud be tapping into.
Singles Day
And there is no better time than now to capitalize: today, China’s Singles Day is an excellent entry-point to reach these new customers. For those unfamiliar, Singles Day is a relatively new ecommerce holiday in China on that drove more than $9b in sales last year, more than Black Friday and Cyber Monday combined. Originally intended as a day for singles to treat themselves, it has now expanded to become and unprecedented retail holiday for all of China’s online consumers.
Wondering what products to market to Chinese cross-border shoppers, and how to reach them? These consumers look to US retailers for a broad range of products, with average spend per perchanse in the top three categories reported as clothing ($485), electronics ($1,229) and cosmetics ($512). Over half of Chinese cross border buyers report using an online search engine to find products, while roughly 40% get recommendations from friends or family, or return to U.S websites they have purchased from before.
There’s never been a more exciting opportunity for US businesses to consider China as a key investment for increasing global online sales. Ecommerce spending in China continues to rapidly increase, with recent research from Forrester showing that online retail spending in China, which hit $307 billion in 2013, and is expected to top $1 trillion by 2019. Businesses that effectively understand the Chinese marketplace – the demographic composition and purchasing habits of its diverse consumer class, as well as navigating business operation processes such as international logistics – will be well positioned to reap the rewards. With Singles Day here and billions of sales on the line, now is the time to take advantage.