Why E-Commerce in China
The China ecommerce market is the largest in the world with a volume of 1.94 trillion USD in 2019. China’s ecommerce market is more than three times the size of the US market.
As businesses are racing in to join on this opportunity, they are finding that there are some key fundamental differences when operating a storefront in China. These differences may be technological, political, social, and cultural in nature.
In this article, we look at whether to host your ecommerce storefront on popular 3rd party ecommerce platforms or keep control by hosting it independently.
Case Study on H&M’s Online Blackout
H&M is a Swedish multinational clothing-retail company known for its fast-fashion clothing. In China, H&M relies on a network of third-party e-commerce platforms for distribution, where a few “super apps” have largely replaced individual apps and websites.
In 2020, the Swedish clothing brand decided to stop sourcing from China’s Xinjiang region which caused a stir among Chinese officials.
On the afternoon of March 24, 2021, H&M flagship stores “disappeared” off leading e-commerce platforms, including Alibaba’s TMall, JD.com and Pinduoduo, Meituan’s shop-listing app Dianping, map apps from Tencent and Baidu, among other major online platforms in China.
Key Take Aways From H&M’s Online Blackout
Ecommerce stores that rely on 3rd party platforms such as Alibaba’s TMall, JD.com, and the “super apps” lack control over their storefront.
Mainland China was one of the four largest markets by sales for H&M in 2020. In a country where consumers are increasingly accustomed to shopping online, the blackout could have a drastic impact on H&M’s bottom lines.
It is common for international brands to operate their own official storefronts via 3rd party platforms such as TMall, that have lite apps that run within WeChat.
These ecommerce businesses that rely on 3rd party platforms put themselves at risk as H&M learned due to lack control over their storefront. Owners hosting their storefront on their own company controled website provides reduces risk and provides a more stability.
Take Control of Your Storefront’s Visibility in China
21YunBox empowers ecommerce store owners to host and control your own website and storefront with blazing fast speeds and a reliable connection in China at an affordable price.
Learn more about how to take full control of your store’s online presence in China and schedule a call with an expert today.