It is a $210 billion industry and rapidly growing.
With no shopfront costs and over 500 million potential online shoppers, China's e-commerce industry is ripe with opportunity for Australian businesses.
Consultancy firm A. T. Kearney estimates that the Chinese e-commerce market has grown 78 per cent annually since 2006, and many experts believe there is much more scope for growth.
Doreen Wang, head of branding at Millward Brown, says growth is being fuelled by three key drivers.
“Consumers definitely have more choices online, on the e-commerce shops, and this is not limited to shelf space in the traditional supermarket,” Ms Wang said.
“And it’s faster, cheaper and better consumer experiences.”
The surge in online shopping on mobiles and tablets is also pushing sales growth.
Not just bargains
Domestic e-commerce companies are springing up everywhere to ride this phenomenal growth. Many are also ramping up their delivery speed to stay competitive.
Chinese e-commerce giant Jingdong – formally known as 360Buy – has recently announced a three-hour delivery option in selected major cities.
“Two years ago, the products will be delivered three or four days, and right now, that process has been shortened to 24 hours, 12 hours, even six hours in tier one [major] cities,” Ms Wang said.
“That type of delivery speed is definitely giving [an] edge for the first tier e-commerce brands like 360Buy and Taobao.”
According to China social branding agency Resonance, Taobao – the largest online shopping site in the country – attracts almost 150,000 visitors every minute.
Lisa Goodhand, the managing director at export trade advisors China Blueprint Online, says many big global corporate names are also taking this growth very seriously.
“A lot of the American multinationals and European multinationals already onshore in China, and [are] now spending up to 70 per cent of their marketing budget on digital marketing in China, and they're really getting benefit rewards from that money spending,” Ms Goodhand said.
Closer to home, many Australian companies are also latching on to this opportunity.
Kerry Lorenz owns a small business in rural Australia that is going global.
From humble beginnings, her heat wheat bag is heading to China, a result of the ever-growing e-commerce industry.
“Because of the size of e-commerce in china, it's just something that you have to go to. It's so incredibly exciting, it's fast moving,” Ms Lorenz said.
“We just launched a Weibo, which is the Chinese version of Facebook. So far, the positive feedback that we've been getting is just amazing.”
Her wheatbag scarf, named 'Myoki', short for 'My Octopus', is first sewn up in China before being sent to Australia to be filled with wheat.
She hopes to send a thousand of them to China in the next six months, 10 times her current sales.
“I know they do love Australian products and I think that because my product is filled with Australian bio-dynamic wheat ... I think that is its selling point,” she said.
Chinese consumers may be bargain hunters, but they are also quality driven.
“[They] are very concerned about fake products in their own markets, so when they go to a website and when they are considering a purchase they’re really looking for a number of key indicators that will make them confident that the product they’re buying is a genuine product,” Ms Goodhand said.
Room for growth
While China's e-commerce industry boasts enormous potential, Ms Goodhand says the uptake by small to medium Australian companies has been slow.
“China has always been a difficult challenge for Australian companies. This has been the case for a long time, despite the fact that we’re so close to China and we have a large demographic of resident Chinese living in Australia,” Ms Goodhand said.
“It's quite disappointing the number of small to medium sized companies that I see taking advantage of this opportunity – Australia has been a little bit slow on the uptake with digital marketing in general, and when you add China to the mix, it just becomes way too complex.”
To succeed in the Chinese market, businesses need to better understand Chinese shopping habits to reach these digital-savvy consumers, Ms Goodhand explains.
“In the west, we like clear, white space with frames and very low on content, very specific, straight to the point, not too much detail, not too much jargon,” she said.
For Chinese websites, more is always better.
“The page rolls down and down and down forever,” Ms Goodhand said.
“There are hundreds and hundreds of links, lots of flashing banner ads, things like that, Chinese consumers love that and it gives them confidence that that the website is a really good quality website.”
The cultural barriers do not stop there.
“Common platforms such as Youtube, Twitter and Facebook are not available in China,” Ms Goodhand said.
“When you open somebody’s website that has all of those links on it, in China, you’ll actually not be able to see those links, so all of that marketing collateral becomes useless in China.”
For Australian businesses looking to secure a foothold China’s booming e-commerce market, it is a matter of navigating the cultural divide.