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If Brexit Is A Cloud, Then China Could Be Your Silver Lining

Brexit playing with your business planning? Of course, it is. Even the most savvy of business and political figures know that we can only predict one thing from Brexit – utter unpredictability. We thought that before. However, 2 years on, that is the one thing that is more clear than ever.

So what’s the move to solve the problems? Relocate to Ireland to remain in the EU? I’m not sure that’s viable for most of us…. No, if your company is selling physical products, then China could just have ripened as your fruit of choice for growth.

But Isn’t China Impossible To Navigate?

China has long had the reputation as the impenetrable fortress. Smoke. Mirrors. Confusing business ceremonies. Accidental faux pas all over the place – and oh, yes the worst national brand on the planet for integrity. We all remember at least one major China horror story from the news, if not more. But we’re pleased to announce: All of the above are totally irrelevant to the biggest opportunity in the e-commerce world right now.

Selling To China

Your Big Opportunity Right now China is exploding. The industry that is ripe for harvest are e-commerce. Why? The PRC is only around 35 years into its “open and reform” policy, aka “fully blown high growth capitalism”.

What Does That Mean In Reality?

It means that China, despite what people may be unaware of, did not have any private enterprise until around 35 years ago. The PRC has done in less than 40 years what the UK did in around 150 years – full-scale modernisation but at breakneck speed. When a culture changes so fast, you can install lots of cheaply produced modern technology, but human brains take time to adapt – that’s a reality. The middle class in the PRC is burgeoning and now they want 2 things to bring them into line with the rest of the world: more education + more brands.

To add to this, Chinese consumers are now becoming specialists, not just generalists. The Chinese public is becoming savvy to consumption – The days of only Coca-Cola and Nike being symbols of youthful modernism are long gone. That was 10 years ago. The Chinese consumer now “gets” what bespoke and niche products are all about.

China hasn’t developed niching across all industries, only very few…. In Beijing, the number of craft breweries puts London to shame, and it’s not only limited to the major cities. This kind of pattern of consumption is rife across China, and the reality of Chinese e-commerce is reflecting that. The “made in China” brand cannot fill this gap, due to a Chinese distrust of its own lesser known brands.

British standards are recognised in China. UK industry is still respected the world over (despite our inability to organise ourselves politically). On top of that, China now understands niche products, and is ready to buy from lesser known companies from the UK- this is a seismic shift.

China’s Unique Online Ecosystem

The e-commerce environment in China is it’s own thing because the internet inside the PRC is its own thing:

  • No Facebook
  • No Twitter
  • No Instagram
  • No Youtube
  • No Google

The internet in China grew up inside China’s “Great Firewall”, which meant that anything the government couldn’t control was effectively blocked, giving rise to Chinese solutions, which have now blossomed into the fully independent e-commerce ecosystem we see today.

Alibaba boss, Jack Ma describes this phenomenon as “New Retail” which describes the new dynamic of online sales that is sweeping China at an alarming rate.

The All Important Numbers:

  1. Chinese e-commerce grows annually by more than to the total amount of UK e-commerce. E-commerce in China is predicted to grow by $233.5 billion, in 2018, which is $30 billion more than the UK’s annual online spend on goods.
  2. Chinese online shoppers spend $208 billion a year using credit cards which UK retailers don’t accept. Every year, $208 billion is spent online in China using a payment system UK businesses don’t accept. 4% of online transactions in China are made using “international credit cards” (Visa/Mastercard) ie, nonChinese payment systems. So if you don’t accept Chinese payments, you have no access to $200million of sales.
  3. Every year, Chinese online shoppers spend over $100 billion just on clothes. China clothing e-commerce alone are worth more than the UK fashion industry- fashion is huge in China.
  4. One Chinese e-wallet is used by more people in China than there are people in the EU. The truth is it’s almost double – with around 1 million transactions a minute.
  5. M-commerce in China is worth $173 billion.

China went straight to mobile. Cheaply made local handsets and the leap in infrastructure meant that it was cheaper to get a pay as you go SIM and a phone than a landline and a laptop. So most people did….

Currently, $200 billion in sales are made in China. 5G is imminent, so those figures will only soar. China is currently responsible for 40% of global e-commerce sales – proportionately well above its global retail share ( 30%) showing that the online growth is exponentially growing year-on-year.

Is It Really All That Easy?

The journey from awareness-to-sale in China is almost unrecognisable when compared to the western model. There are two classic examples for this websites and WECHAT.

  1. The Chinese internet at large. As we have mentioned, forget Facebook, Youtube, Google, Twitter and Instagram. They don’t exist inside the Great Firewall – and neither will your website if you don’t know the tricks to keep it functioning under the gaze of the Chinese censors.
  2. WECHAT is the all-powerful mobile app in China that runs peoples lives in a way the Facebook can only dream of. It began as a chat app that eventually incorporated maps, mobile payments ( China is already sprinting towards a cashless society- they mostly just scan a QR code on WECHAT, even when buying an apple on the street). Chinese people are using websites as a first port of call to gather general information, and then moving onto the WECHAT platform to buy. WECHAT magic for sharing, which is how it works in China. You can browse, pay and refer all from inside one app that over 1 billion people in China are spending most of their day on.

If This Is All Happening Now, How Can I Benefit?

The good news is that you can access all these services from us already. We already have high profile clients in China, and we can help you too. Get in touch via our contact form or ask a question in the comments below.

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