The People’s Republic of China is undeniably a major global economic player. With a GDP of 14,217 billion dollars in 2019 and an annual growth rate of 8%, China is actually the world’s second largest economic power.
Since becoming a member of the WTO in 2001, China has removed a significant number of customs barriers. As a consequence, foreign companies no longer need to form partnerships with local businesses in order to set up there. The presents European companies with an opportunity to expand their businesses into any of numerous business sectors in China.
Why establish yourself in China?
“Whereas e-commerce is simply a form of shopping in other countries, in China it’s a whole way of life.”
Jack Ma, chairman of the Alibaba Group.
China has a population of 1.4 billion, with 802 million internet users amongst them, and online sales in the country amount to 800 billion dollars per year. The world leader in e-commerce, China is a highly connected country. It’s also a land in which mobile connnections are ubiquitous (98% of internet users use their smartphone for web browsing purposes). The primary advantage for a European company looking to set up in China is the strong demand for European brands and culture that exists there.
China is also a country where 60% of purchases are made in online marketplaces versus 40% made on brands’ own websites. In France it’s the reverse! Chinese consumers spend 1,470 billion dollars per year on the world’s largest online marketplaces, a sector dominated by Amazon and Alibaba in 2018. In fact, buyers generally prefer to make these kinds of purchases rather than buy directly from brands’ own websites.
It’s also important to note that China is unique in certain respects where online sales records are concerned. Whereas Black Friday is one of the busiest times of year for websites and online marketplaces in Europe, in China it’s on Singles’ Day that the greatest number of sales are generated. In 2018, more than 30 billion dollars were spent in this one 24-hour period.
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Although this all might seem daunting, the Chinese market, with the huge potential it offers, is not impenetrable: many English companies – such as British Airways and Burberry, to name just two of the best-known examples – are enjoying considerable success there.
The digital challenges to overcome when setting up in China
Chinese social networks and digital tools
Many social media sites are censored in China: Twitter, Facebook, YouTube and Dailymotion are all blocked in the country. This means you’ll not only need to rethink your social media strategy but also the way you analyse your web performance: it will no longer be possible to access Analytics or any of the other services in the Google suite – tools that have been so essential for over 10 years now.
In the absence of access to these networks, China has developed its own local apps and services such as Youku (equivalent to YouTube), Baidu (equivalent to Google), WeChat (messaging), 360.com (antivirus) and Weibo.com (a microblogging platform). It’s therefore essential that you become familiar with these tools and develop an effective strategy on these networks to ensure the success of your bid to establish yourself in China.
Web hosting in China
There are various points you need take into account if you’re going to properly set yourself up in China. First of all, it’s important to equip yourself with an ICP licence – a permit issued by the Chinese Ministry of Industry and Information Technology that gives you the right to maintain and operate a website in China. Without this document, a website stands little hope of lasting more than a week. Other points to take into consideration:
- Avoid the use of prohibited words that are liable to be blocked by firewalls
- Comply with the cybersecurity law that came into force on the 1 June 2017 (for foreign companies selling products on the Chinese market)
- Use a CDN (Content Delivery Network) to reduce load times. Websites traditionally supply everything from a single centralised server. However, the use of a CDN is recommended when targetting international users or web visitors located at the opposite end of the country or on the other side of the world. Being so far away can cause them to experience relatively long load times. This is due to the distance the information has to travel between the server and the user’s computer. CDNs enable you to reduce this distance by using a series of caching servers placed strategically at different geographical locations and on which copies of the same content are stored so it can be distributed to users located nearby.
Adapt to consumer habits
Properly hosting your website in China also means respecting the country’s rules and practices:
- Seriously consider translating your site into Chinese
- Localise your site in accordance with consumer habits
- Take technical and legal constraints into account
- Be imaginative and stand out from the local competition
Though practically everything is different than in Europe, there are still some similarities to be found, particularly with respect to popular tools such as Hybris or WordPress, which are widely used in China just as they are in Europe.
Take all tips and advice seriously: non-compliance with the law can lead to your website being censored. It’s actually possible for websites to be blacklisted. It’s therefore important to respect the country’s particular rules and laws.
If you’d like to learn more on the topic, you can find additional tips and advice about setting yourself up in China in this article, which features examples of companies that are enjoying great success in this highly complex Asian market.
Now that you’re familiar with the key things you need to know to successfully set yourself up in China, all that remains for you to do is launch your venture!
