Chinese consumers and their expectations around shipping and deliveries
Expectations of the tech-savvy, mobile-first Chinese consumer are moving steadily higher as advancements in technology continue to shape the e-commerce landscape. Among China’s 802 million internet users (2018), 788 million (98.3%) used mobile phones to access the world wide web. What’s more, mobile GMV accounts for 80% of every e-commerce dollar in the PRC, compared to the global average of just over 64%.
However, Chinese consumers’ expectations go beyond a seamless mobile experience that allows shoppers to browse and purchase products and services. Highly attentive and responsive customer service, detailed product descriptions and an increased desire for lightning fast shipping are all realities that Western companies looking to sell to China must grasp in order to be successful.
Speed is king
In 2016, an order placed just after midnight on November 11th (also known as Singles Day—the largest e-commerce shopping day in the world) was delivered 13 minutes later. Chinese consumers don’t necessarily expect deliveries to be made within a quarter of an hour, but the 13 minute timeline is a harbinger of things to come.
SF Express, the second-largest courier in Greater China has its sights set on 6-12 hour delivery times by 2030 at the latest. In an interview with Mckinsey, associate CEO Eddie Huang predicted that 12-hour delivery would become the standard shipping timeline across mainland China. In other words, major metropolitan areas will likely see 6-12 hour deliveries before the end of the decade.
How to keep pace
Western companies looking to penetrate or deepen their reach within China must be able to meet or exceed consumers’ increasingly high expectations for shipping. To be sure, covering all of China’s 9.6 million square kilometers is a challenge. However, while fast and reliable connections into and out of China’s tier-1 and 2 cities exist, companies need the capability to access the fast-growing and increasingly consumption-hungry tier-3 and 4 cities. And as e-commerce penetration continues to grow across the country, consumers in lower-tier cities and rural areas of China will begin to demand the same level of logistics and delivery services as their more metropolitan brothers and sisters.
Avoiding cross-border e-commerce in China
Many of the longest delays in shipping are met at the country’s frontier. International shipping is highly-complex at the best of times, but China’s regulatory framework can render inbound shipping from a foreign country exponentially more complex. As a result, companies should explore their options with respect to establishing a physical presence within the country to avoid unnecessary delays.
Establishing a presence on Tmall’s domestic “Flagship” service as opposed to “Tmall Global” (cross-border alternative) is one way to accomplish this. Tmall Global draws the attention of Western brands who might view it as an easier way of doing business in China. But its cross-border nature can produce shipping delays that will displease Chinese consumers.
Additionally, Tmall Global’s relatively high commission fee structure compared to that of the domestic Tmall service can quickly start to erode the introductory benefits provided by the Global platform.
Establishing a domestic presence
With the exception of organizations that are forced to leverage Tmall Global or JD Worldwide as a result of compliance issues (for example, cruelty-free skincare products that are not allowed on the domestic platforms), engaging in cross-border e-commerce in China can potentially damage a brand’s consumer perception by increasing delays in shipping. These risks, however, can be mitigated by partnering with experts who can help to establish a domestic presence in the market, via proxy.
The right China logistics partner can help brands break through the regulatory barriers of doing business in mainland China and provide the level of service that consumers now expect by acting as merchants of record. Solutions provided by a trustworthy and reliable China operations partner can include:
- Coordinating product imports; registering products at the border
- Managing applicable duties and taxes
- Expatriating capital from the market
- Storing and unpacking goods at a secure warehouse location
- Leveraging the right shipping networks to ensure quick and speedy delivery
- And more
Exceeding customer expectations
The competition within China’s nearly $2 trillion e-commerce space is fierce—with players large and small jostling for position. Brands already selling to China or those looking to do so in the future need to deepen their understanding of consumer expectations in order to adhere to them— and be nimble enough to continually adapt to changes in the market.
What’s clear at present is the high-bar set by Chinese consumers with respect to their online experience. This includes an easily navigable mobile-optimized website, advanced customer support, and perhaps most importantly, fast and reliable shipping services and timelines.
Brands looking to execute on the latter would do well to avoid cross-border e-commerce shipping as much as possible. Connecting with the right partner in establishing a domestic presence is a step in that direction.
If your brand is ready to reap the benefits of an effective and efficient domestic presence in China, with a partner that can act as merchant of record and receiver of record, contact [email protected] to learn more.