I want to know about companies that operate EC sites in China, and I’m curious about cross-border EC management agents for China.”
Some of you must have these questions and concerns. China EC has the largest market size in the world, so if you can enter the market, you have a chance to capture a huge market share.
However, achieving results in China EC is not easy. It is necessary to understand the needs of local customers and Chinese EC sites. Since it is necessary to use the Chinese language when managing the site, there is also the option of entrusting the management to an agency.
This article therefore describes representative companies that operate Chinese EC malls and recommended management agents.
China’s cross-border EC market is the largest in the world
The size of the cross-border EC market continues to expand worldwide. Of these, China is gaining the largest share of the EC market.
The Ministry of Economy, Trade and Industry’s “FY2020 Market Survey on Electronic Commerce” announced the size of the cross-border EC e-commerce market between Japan, the U.S., and China.
In that survey, cross-border EC purchases by Chinese consumers from Japanese businesses totaled 1,949.9 billion yen (up 17.8% from the previous year), while cross-border EC purchases from US businesses totaled 2,311.9 billion yen (up 15.1%).
The scale of the cross-border EC market in Japan, the U.S., and China is as follows.
|home (i.e. hometown, home country)||Cross-border EC Purchases||growth rate|
|Japan||341.6 billion yen||7.6%|
|America||1,710.8 billion yen||9.9%|
|China||4,261.7 billion yen||16.3%|
Thus, China dominates the market in terms of the scale of the cross-border EC market, with a difference of more than 10 times that of Japan.
By entering the Chinese cross-border EC market, which has such a huge market share, you can reach a large number of people with your products. By raising the awareness of your products, you will be able to greatly increase the number of sales as a result.
For these reasons, market research on Chinese EC is essential when entering the cross-border EC market. Before entering the market, be sure to keep track of China’s famous EC malls.
3 Ways to Enter the Cross-Border EC Market for China
While e-commerce malls have a strong influence in China, sales on their own websites are characterized by very low volumes. With this in mind, please review the following three ways to enter the market.
Method 1: Set up your own e-commerce site
The first is to set up your own EC. Although this is the most difficult method, it allows you to freely decide the design of your e-commerce site. In addition, since you can promote only your own products, you can expect various advantages, such as having a continuous relationship with customers who have purchased your products.
Nevertheless, if you build your own site, you will have to hire a domestic EC vendor to make it multilingual. In particular, when building an EC site for China, recognition is important, so you also need to do your own marketing.
Consider launching your own e-commerce site based on these advantages and disadvantages.
Method 2: Utilize domestic malls
The second method is to utilize domestic malls. This includes listing on domestic Amazon, Rakuten, and Yahoo!
It is easier to open a store than other methods because it simply utilizes existing systems. Since they are already well known, it tends to be easier to increase the number of sales.
However, it is difficult to express your company’s commitment and you cannot freely change the design or system. Consider these disadvantages, such as commissions based on the number of sales and initial costs.
Method 3: Utilize the China Mall
Another option is to utilize the China Mall. Since local Chinese often use their own country’s e-commerce, you can reach out directly to Chinese by using a Chinese mall. In addition, if the product inventory is managed locally, shipping time can be shortened. However, understanding of the Chinese language is required when using the China Mall.
Furthermore, major e-commerce malls in China do not allow companies without a legal entity in China to open a store. Even if a company has a corporation in China, there may be strict conditions. Therefore, if you are considering using a China mall in the future, please check these conditions in advance.
Three leading companies operating EC malls in China
Here are three major companies that operate Chinese e-commerce malls.
- Alibaba Group
- Jingdong Business City (JD.com)
- Pinduoduo Inc.
If you are considering using a China Mall, be sure to review the details below. You should be able to find the right China Mall for your company.
1. Alibaba Group
Alibaba Group is a company that holds approximately 50% of the Chinese e-commerce platform market share. It operates e-commerce malls such as Tmall, Tmall Global, and Kaola, which boast an overwhelming share of the Chinese market.
|Tmall (TianNeko)||China’s No. 1 EC mall with an extremely large market share
Marketing support through proprietary consumer analysis services
|Tmall Global||China’s largest cross-border e-commerce platform
Reach 300 million middle-class Chinese consumers
Japanese products are very popular.
|Kaola (考拉海購)||EC platform that drives cross-border EC in China
The largest area of bonded warehouses for cross-border EC in the industry
More than 10,000 brands from over 80 countries
Each of these e-commerce malls has gained a high market share. They are used not only in China but also worldwide, and are truly the largest e-commerce operators in China.
2. Jingdong Business City (JD.com)
Founded in June 1998, JD.com originally sold PC peripherals. Today, the company offers not only electronics, but also food, daily necessities, furniture, and many other genres.
The main reason why Kyungdong Shocheng has been able to grow so much is the strength of its logistics network. Kyungdong Logistics has its own huge warehouses in various locations, enabling speedy delivery, such as the same-day delivery of products ordered by 11:00 a.m.
Note that Kyodongshangcheng uses a direct sales model, selling products that it purchases itself, similar to the Amazon sales format.
Pinduoduo Inc. was founded in September 2015 as a Chinese e-commerce platform with a joint purchasing system.
In China, it holds the third largest market share after Alibaba Group and Beijing Dongcheng. Its growth rate is tremendous, and it is rapidly increasing its market share in a short period of time.
The reason for the rapid growth of Pinata’s business was that it targeted low- and middle-income earners in rural areas. At the same time, the company has lowered the threshold for purchase by implementing joint purchases.
Because of the huge income disparity in China, we have succeeded in attracting the majority of users by adopting a sales strategy that caters to a target demographic that luxury malls do not focus on.
If you use Pinyin to sell your products, you will be able to reach a large number of Chinese users, because Pinyin uses a joint purchase system in which the more buyers, the lower the price. This is due to the joint purchase system, in which the more people who buy, the lower the price, and the more the product information spreads through SNS such as WeChat and Weibo.
Three recommended management agents for cross-border EC to China
If you still have concerns about cross-border EC operations, one option is to request an agency. Experts with knowledge of China EC will provide support, allowing you to operate your site more effectively.
There are several companies that provide management services. To avoid confusion when selecting a company, please check the following three companies. You should be able to find a suitable agency for your company.
1. WPIC Technology Japan, LLC
WPIC Technology Japan LLC has been supporting online strategies of foreign brands for more than 17 years. With its wealth of experience, the company’s local staff provides extensive support for companies entering the Chinese market.
The services offered to Japanese companies can be broadly classified into the following three categories.
|Digital Marketing Support||PPC Advertising
EC Mall Marketing
|E-Commerce Support||EC Mall Account Opening
Tmall account opening and operation
Opening and operation of Jingdong (JD) account
Other e-commerce sites
EC support by local staff
|Research and data provision||Marketing Information
Intellectual Property Protection Support
Sales and performance management support
Because we provide overall support for EC site management, including data collection, analysis, and marketing, even those who are “using cross-border EC for the first time” can rest assured that we are here to help.
2. Beauty Flu Gel Co.
BeautyfluenGel Inc. is a company that provides full support for cross-border EC operations and store openings for China. Support is fully in Chinese, and the company supports multiple Chinese e-commerce malls.
Although the procedures for opening a store and operational support are handled by the mainland China branch office, the contact point is the Japanese headquarters, which provides Japanese-language support, so you can rest assured.
We have a great deal of experience in cross-border EC operations for China, and after opening a store, we can also provide customer support through chat responses with customers, so we recommend this service to businesses that “want to understand local needs through Chinese language support.
3. Inagora Holdings, Inc.
Inagora Holdings Co., Ltd.provides a full range of services related to cross-border e-commerce, including content creation, marketing, logistics, and settlement.
We offer the following two types of services
|Platform Business||Operation of the cross-border EC application “Pea Gongzhu (Wandou)” for China|
|Brand incubation business||Nurturing service to turn a brand that is not yet well known in China into a popular brand.|
This service differs from general operation agency services in that we will sell products mainly through our “pea gongs” (wandoo).
While it is still possible to reach Chinese users as cross-border EC, it is not suitable for those who want “support for major EC operations in China. Please consider using this service after confirming whether it is suitable for your company.
In this article, we have described typical companies that operate Chinese EC malls and recommended management agents.
If you enter the Chinese cross-border EC market, which has a large market size, you may be able to capture a huge market share. However, it is not easy for everyone to enter the market, and in some cases, an agency is the best option.
If you do not have the know-how for cross-border EC or are not confident in your operations, please refer to the information in this article and consider using an agency.