As the world becomes increasingly globalised and businesses more competitive, stepping outside of your comfort zone and entering into new markets can be a great way to bolster profits and increase competitiveness - but expanding into new territory can be overwhelming.
As an entrepreneur, the chances are that you have at least considered stepping foot into a new market to unlock growth but were perhaps unaware of how huge the opportunities were for Western brands. China represents enormous potential for UK businesses in virtually every sector, provided you implement the right digital marketing strategy and market entry.
At Zudu, we help British and Scottish businesses expand into China using a unique, tested digital marketing approach. Rather than run through some of the reasons why you should take your products into the country, we thought we’d let the numbers do the talking…
Half of all global luxury spending will be in China by 2025
Businesses looking to make their mark in the luxury goods sector, whether they operate in fashion, cosmetics or food and drink, can take advantage of China’s growing middle class, and grab a slice of a market where homegrown and international luxury brands dominate.
Luxury spending by Chinese shoppers represents 33% of the global market
Forget 2025 - China is already a market leader when it comes to the luxury sector, with its citizens spending more on luxury products and services than any other nation.
70% of China’s millennials own their own homes
The chances are you’re not going to enter the Chinese property market, but it’s interesting to note that 70% of millennials own their own home - that’s twice the rate of US millennials, according to HSBC - demonstrating high levels of disposable income and economic stability.
The Chinese cosmetics sector grew by more than 25% in 2018
Sectors like the cosmetics industry are growing at an unprecedented rate, fueled by the rise of e-commerce and the influx of foreign brands making their products available in China.
Online luxury sales increased by 27% in 2018
It’s important to note that the majority of luxury purchases take place offline in China, so Western brands should partner with retail stores to sell their wares, but online luxury sales did grow last year, and they’re now responsible for 10% of all luxury sales in China
Middle-class consumers will represent 65% of all Chinese households by 2027
According to a Bain & Company report for the World Economic Forum, China’s middle class will grow to 65% of all households over the next eight years, representing a significant shift and unlocking potential for British and Scottish brands looking to sell products in the country.
WeChat will total US$150 billion in Gross Merchandise Volume in 2019
Social-network-cum-instant-messenger WeChat will be responsible for more than US$150 billion in e-commerce revenue this year, demonstrating the huge power of China’s social networks, and the ease of entry for Western businesses looking to connect with consumers.
95% of consumers use their mobiles to access the internet
According to the China Statistical Report on Internet Development, more than 751 million Chinese citizens are internet users, and 95% of those are using their phones to access their favourite content - great news for Western brands who want to sell their products online.
WeChat has one billion daily active users
Around the world, Chinese social network WeChat has more than a billion daily active users, a huge portal for marketing potential. Remember that the social network is available outside of the country, meaning you can not only target Chinese consumers on their homeland but when they’re travelling around the world and spending time in the UK, too.
71% of millennials have a positive financial outlook
In stark contrast to some Western countries, including the United Kingdom, 71% of Chinese millennials have a positive financial outlook, according to a UBS survey. If you’re looking to target millennials and Gen Zs, it’s good to know that they’re willing and able to spend.
81% of millennials expect their income to increase in the coming years
Young Chinese consumers expect to see their incomes increase in the coming years, representing higher levels of disposable income and an increased appetite for products and services - particularly foreign products that can offer quality or a unique benefit.
1.57 billion mobile phone subscriptions are registered in China
As of 2018, there are more than 1.57 billion mobile phone subscriptions in China. The country is truly mobile first, and many consumers have more than one smartphone - one for contacting their family at home, and one for friends and work. Apple, for example, recently introduced a two-SIM iPhone in China to appease Chinese consumers’ smartphone habits.
68% of consumers say their shopping choices are influenced by social media
Great news for Western businesses. Investing in a Chinese social media strategy can help you to stand out from the local/international competition and increase sales in the country.
China will overtake the U.S. as the world’s top economy in 2020
Forget expanding Stateside - according to the Standard Chartered Bank, China will become the world’s largest economy next year, so act fast if you want to grab a slice of the market.
Alibaba alone racked up more than £24bn in sales on Singles’ Day 2018
Major shopping events like Singles’ Day represent unique opportunities to shift stock and make a name for yourself in China - last year’s record-breaking event saw revenue rise 27% from 2017. Who needs Black Friday when you can take advantage of Singles’ Day?!
Delivery orders surpassed one billion on Singles’ Day 2018
More than one billion orders were placed on Singles’ Day 2018 alone. Make sure you have the right distribution infrastructure before expanding into China or selling stock during such a high-profile event, as late deliveries could limit growth and damage your reputation in China.
In 2018, retail sales growth was 6.9%
That figure is slightly down on 2017’s 9% growth, but it shows that Chinese consumers are hungry to spend money - and that there’s still room for new players to enter the market.
Chinese app users spent around 225 billion hours in apps in 2017
Chinese consumers love their phones and spend more time in apps than any other country - 4.5 times more than the second highest market, India. Develop an app or WeChat mini-app, and you could become an overnight sensation in China and shift your stock in no time.
70% of Chinese millennials turn to social media to purchase products
According to Accenture, 70% of Chinese citizens born after 1995 use social media to buy products directly. The global average is 44%, which shows Chinese citizens can be heavily influenced by networks like WeChat and Weibo; great news for Western companies looking to expand into the country without the expense of opening physical retail locations.
More than 450 million Chinese consumers watch live streams
According to Deloitte, live streaming in China is growing year-on-year, with viewers topping 450 million in 2018. Businesses wanting to create viral sensations or spread the word about their products and services should turn to this video marketing technique to increase sales.
200 million WeChat users have a credit card attached to their WeChat
Chinese consumers love to purchase goods directly from brands via social networking sites, and 200 million (and counting) are ready and waiting to spend their money on WeChat.
42% of global e-commerce is happening in China
If you run an e-commerce business in the UK, you cannot ignore the power or influence of China. New data shows that more than a third of all e-commerce sales come from China, and that figure is only set to rise as smartphone penetration continues to increase.
One-third of the world’s Unicorn businesses are Chinese
A third of privately-held startup unicorns - valued at over $1 billion - are Chinese owned, and combined they command 43% of the global value of such businesses. If you operate in the B2B market and want to partner with startups and growing brands, China is the place to be.
Industries like retail, healthcare, and logistics could explode in coming years
According to the McKinsey Global Institute, digitisation in China could shift value equivalent to 10 to 45% of the revenue pools across sectors including retail, mobility, healthcare, and logistics industries by 2030. That represents hundreds of billions’ worth of revenue potential.
The Chinese middle class spent over $260 billion overseas last year
That’s more than any other nation, despite the fact just 5% of citizens have a passport. As more look to travel and register for passports, Chinese spend in Western countries like the United Kingdom is set to explode, so develop your brand amongst Chinese consumers sooner rather than later if you want to tap into the country’s lucrative middle-class.
Cross-border now makes up 7% of overall e-commerce spend
Products and services from other countries now represent more than $100 billion in annual revenue for Chinese businesses, with buyers looking to purchase high-quality products from other countries. UK brands needn’t step foot in China, provided their marketing strategy is on point and they have an effective distribution strategy to ensure goods are delivered on time.
The cross-border market is expected to exceed $140 billion by 2021
That $100 billion figure is expected to balloon to $140 billion by 2021, as appetite for foreign produce builds. List your products on sites like Alibaba and JD.com to maximise sales.
In metropolitan areas like Beijing and Shanghai, 90% of residents shop online
That’s a huge number and demonstrates the power of e-commerce in the country. What’s more, Goldman Sachs estimates rural cities will be responsible for 71% of new e-shoppers over the next few years, so the only way is up for companies selling via e-commerce sites.
400 million consumers used WeChat mini-programs every single day last year
Mini-programs (small, easy-to-use applications inside of the WeChat ecosystem) give British brands the chance to engage with consumers, build relationships and sell more products.
Amazon has struggled in China with less than 2% e-commerce market share
If you distribute worldwide, you cannot rely on Amazon alone. The company has just a 2% market share in China, despite its size and clout in the West. Alibaba is the king in China.
Chinese consumers spent an eye-watering $1.53 trillion online in 2018
E-commerce spending in the UK accounted for 20.6% of total retail in 2018, at £96 billion. China’s US$1.5 trillion blows that figure out of the water, adding another revenue stream to your bow and helping you to reduce reliance on the current economic uncertainty of the UK.
Chinese tourists spend twice as much as US tourists
According to the United Nations World Tourism Organisation, Chinese tourists spend twice as much as US tourists when travelling, unlocking huge potential for UK companies offering experiences, whether that’s museums, hotels, restaurants, or entertainment.
116 million Chinese consumers will get a passport in coming years
The number of Chinese consumers looking to travel is growing rapidly - if you’re too slow to appeal to Chinese tourists when they visit the UK, your competitors will jump ahead of you.
Consumers will pay up to 22% more for Brand Britain
According to one report, three-quarters (73%) of 25-34-year-olds in China said that a product with a Union Jack would encourage them to make a purchase. Brand Britain is very valuable.
Chinese tourists will spend £1 billion a year in the UK by 2020
According to VisitBritain, Chinese tourists are spending more in the UK than ever before, and that figure will hit £1 billion per year by the end of 2020.
China is home to a $700 billion food and beverage industry
China overtook the United States in 2011 to become the world’s largest consumer, and today its food and drink sector is enormous. In the middle classes, there’s a growing trend towards imported food and drink, with Scottish alcohol brands enjoying record levels of growth.
58% buy foreign products online from domestic e-commerce sites
As well as developing a Chinese-language brand and digital marketing strategy, selling via e-commerce sites like Alibaba or WeChat will help you shift more foreign produce in China.
Chinese tourists spent £44 million in Scotland last year
That figure climbs to £694 million when you tot up spending across the whole of the UK. Chinese spend in the UK is on the rise, and businesses in virtually every sector can benefit.
60 million WeChat users are aged between 55 and 70
Don’t assume that a digital marketing strategy in China will only reach millennials and tech-savvy youngsters - there are millions of WeChat users over the age of 55.
There are 1 billion daily transactions on WeChat
According to China Internet Watch, there are more than a billion daily monetary transactions on WeChat - it’s the preferred way to pay for goods and services in the country, so we recommend signing up for an account and offering WeChat Pay as an option to consumers.
There you have it - our bumper look at why China should be a key consideration when you’re looking to expand into new markets. If you’d like to find out more about how Zudu can help with our range of Chinese digital marketing services, give us a call on +44 (0)1382 690 080.