International E-Commerce: The Wild, Wild East
China’s economy has been booming as of late. It’s proven prosperous for a once virtually nonexistent majority of the Chinese population — its middle class. China’s middle class is growing in number, acquiring wealth and improving its standard of living at unprecedented rates. Looking out over the next decade or two, the Chinese middle class is expected to wield enormous spending power as it reaches 600 million people to 800 million people — with more than $2.7 trillion in disposable income.
As more households in China see an increase in disposable income, the purchase of luxury goods, food, apparel, household and personal products, among other expendable products and services will rise accordingly. Consumer buying behavior and unique cultural characteristics position China as a worthwhile investment for U.S. companies looking to expand their international offerings.
It’s reality that demand for foreign products in the Asia-Pacific region already exists. Many Chinese consumers hold foreign products in high esteem, believing they’re of premium quality. Conversely, the contemporary middle class tends to have distaste for local brands and domestically made products, which it views as less fashionable, less reliable and less technically advanced. As a result, branded goods from the United States and Europe have become very popular and well-regarded household staples.
Demand for luxury goods is on the rise as Chinese consumers increasingly value wealth and affluence. Purchases including jewelry, perfumes, electronics, watches, accessories, sports equipment, and wider lifestyle and recreational products will coincide with a rise of designer and lifestyle fashion in China. It’s forecasted that by 2015 the Asian nation will account for 20 percent of the world’s rapidly growing luxury market.
What to Consider Before Launching an E-Commerce Site in China
China’s large population is dispersed throughout the country, with the vast majority of citizens residing in nonurban areas. Most consumers lack access to the brick-and-mortar retail outlets located in the large urban areas. Mobile and internet penetration continues to grow in China — more than 15 percent per year — presenting a rich opportunity for e-commerce in the market because it fills the gap efficiently and affordably through low-cost delivery couriers. In fact, B-to-C e-commerce sales in China are expected to rise to $223.6 billion by 2015, a growth rate of more than 3,140 percent from 2010.