SINGAPORE: An international outlook has always been key to Singapore’s success, but never has it been more critical than it is today. The internet has lowered the barriers to entrepreneurship, allowing more businesses to punch above their weight and go global more quickly.
Singapore’s Finance Minister Heng Swee Keat noted as much in a recent speech, remarking on the need for businesses here to leverage technological advancements and trade liberalisation that have reduced distances and extended companies’ reach to international resources and customers.
For businesses in Singapore keen to experiment in new markets, China presents a massive opportunity.
China has over 731 million internet users today - about the same as the entire population of Europe. Young, affluent and mobile-savvy consumers in China will power its economy for some time to come.
Chinese shoppers also spent 5.16 trillion yuan (S$1.05 trillion) online in 2016 – almost double the amount spent in the US (S$535 billion). And these purchases are increasingly made from businesses overseas - Chinese consumers are expected to spend over S$204 billion on foreign goods by 2020.
Yet China is also one of the world’s most complex markets, so it’s worth examining some of the challenges of navigating its unique internet ecosystem before getting started.
Over the past year, we’ve had a chance to learn a lot from our users and partners about selling cross-border to Chinese consumers. Here are some of those lessons.
1. FACTOR IN THE CHINESE DIASPORA
Before you start out, consider how you can learn from the estimated 50 million Chinese citizens living overseas – as this is a powerful community of influencers to friends and family back in China. Many businesses find that the take-up rate among Chinese consumers grows organically through this diaspora community, as well as through social networks like WeChat.
Similarly, consider the influence of Chinese education networks among Chinese students and alumni who may be living or studying overseas. Making a good impression on a handful of customers could spark interest across their friends and social media contacts, at home and abroad.
2. LEARN FROM BUSINESSES THAT TRIED, FAILED OR SUCCEEDED IN CHINA
Get some candid advice by speaking with other companies who have gradually experimented with serving different Chinese consumer segments.
Also, a lot can be learned by speaking with investors who have invested in Chinese companies, or by speaking to international companies who have succeeded or failed in China – the failures teach just as much, if not more.
Leading Chinese companies like Alibaba and Tencent have a wealth of knowledge about Chinese consumers and share some consumer insights publicly.
3. OPTIMISE FOR MOBILE
It may sound obvious, but it’s especially critical to get mobile right in China. 95 per cent of China’s internet users are on mobile, and mobile commerce accounts for 71 per cent of Chinese e-commerce.
When Chinese consumers are accustomed to ordering groceries, meals and even pet-grooming services via mobile, businesses need to meet consumer expectations, from responsive design to seamless checkout experiences.
4. OFFER FAMILIAR PAYMENT METHODS
Offering payment methods that Chinese consumers use daily is essential. Alipay and WeChat Pay represent two of China’s most widely used payment methods and dominate the US$5.5 trillion mobile payments market in China, with 92 per cent market share between them.
Since many Chinese consumers value convenience and familiarity when shopping cross-border, offering these payment methods will help you serve your customers better.
5. OPTIMISE FOR DISCOVERY
Getting your product discovered in China is extremely challenging if you’re an overseas business.
Leveraging powerful Chinese e-commerce ecosystems, like Tmall, can be a relatively low cost way to both get discovered and learn about the Chinese market before making a larger investment. Alternatively, deal sites like DealMoon or 55Haitao in China can also help generate early traction.
Similarly, optimising for Chinese search engines like Baidu and Soso, which are far more popular in China, is also important. Local technology vendors can help restructure website content so it’s more compatible with the Chinese internet infrastructure on things that impact the consumer experience like load times and keywords.
6. UNDERSTAND CULTURAL NUANCES
As demonstrated with Alibaba’s numerous e-commerce platforms, customers in China like to see the products from many different angles. Consider increasing the number of product photos on your website as part of the shopping experience to better meet expectations.
Further, Chinese consumers often expect to build a relationship with the seller before a purchase. The widespread popularity of WeChat and availability of other real-time tools in Alibaba’s e-commerce ecosystem mean Chinese consumers have come to expect near real-time responses from businesses when buying goods and services.
Offering a chat feature and using customer support tools to automate responses on your website could help meet these expectations and bridge gaps in time zones and cultures. With miles between businesses and their customers, coupled with potential cultural gaps and language barriers, spending a little extra time to set up your internal customer support platform can go a long way.
While the Chinese cross-border landscape is complex, it also presents a huge opportunity for Singaporean businesses, especially as the rising Chinese middle class continues to drive greater demand for authentic goods and international experiences online and overseas.
Piruze Sabuncu is head of Southeast Asia and Hong Kong at Stripe.