China is one of the largest e-commerce markets in the world, and it’s growing exponentially every day. The Chinese e-commerce market is projected to hit $5 trillion by 2020. For entrepreneurs, this is an opportunity that cannot be overlooked. However, while the Chinese e-commerce market is huge and lucrative, it is also extremely competitive. It is a market dominated by mega-corporations like Alibaba and new entrants have to be extremely innovative to be successful. For such companies, here is how to succeed in the China commerce landscape in 2020.
1. Align yourself with the big players
While disrupting the market is a highly lucrative strategy, it doesn’t always work. The risks are always high, and in an ultra-competitive market like China, you could waste a lot of money and still fail. To minimize risks and make it big, it would be better to align yourself with a big player. One way to do this is to intertwine your systems with those of a major player. This can help you cut on the costs of data analysis, and logistics that could make your market entry expensive and risky. A good example of a major Chinese player you can align with and succeed is T-mall. This Alibaba affiliated company has a platform known as Tmall agency that is quite useful to entrepreneurs. Once you sign up, you have access to a wide array of services including an online store setup, store management, and SEO, and data monitoring for decision making. In essence, by signing up for the t-mall agency, you stand a chance of making a low-cost, and low-risk entry into the Chinese market.
2. Understand the Chinese patent laws
Chinese patent laws are quite different from the U.S, where the law has always supported the first-to-invent. In China, the patent is awarded to the one who is first to file. In essence, if you come up with innovation and someone else patent it first, they legally own the product. Understanding the country’s patent laws can save you from costly mistakes once you enter the market. The last thing you want is to put in money and time, only for another company to run away with your idea and succeed.
3. Incorporate mobile payments
China is a mobile-first market and almost all payments are done via mobile. As such, if you want to succeed in this market, you must incorporate mobile payments into your business. This will help you better target your market, and grow market share.
4. Enter into a joint venture with a Chinese firm
When entering a new market, it always pays to partner with a local organization. This helps give the new entrant a local face, which can be leveraged to grow market share. The Chinese market is no different. For a higher degree of success, it would be best to partner with a Chinese company that already has a footing in the market. This can give you the leverage to enter the market, with low setup costs, and smoother human resource management procedures. When you combine this with the power that comes on leveraging big players like Tmall, you stand to take a sizeable share of the Chinese market.