China is the world’s largest e-commerce and retail market, with Chinese consumers accounting for almost half of global e-sales, and retail giant Alibaba Group controls roughly 80 per cent of this trade.
There are more people shopping on Alibaba’s online platforms in China than the population of the United States, and the firm is making a push to get more Canadian businesses onto its portals and selling their goods into China.
The size and importance of the Chinese e-commerce space, as well as Alibaba’s position as its primary gatekeeper, were presented at a Dec. 6 event at the Toronto Region Board of Trade by John Caplan, founder and CEO of OpenSky, an American e-commerce firm that is now a part of the Alibaba retail machine.
Caplan highlighted the ubiquitous nature of e-commerce in China, due in part to the lack of physical retail options in many cities, as a major reason to get onto one Alibaba’s platforms: Taobao, which has over 1 billion listings from businesses and individuals—everything from sneakers to helicopters are sold on Taobao—and Tmall, an upscale shopping experience where high-end branded products are sold.
“In China, the best way to buy a Porsche is on your phone,” Caplan said.
Whether its Porsche or Pepsi, western brands are sought after by China’s urban and affluent youth.
However, this attraction to foreign products is about more than caché; quality is important and Canada has a reputation for it.
Caplan says a solid strategy to make inroads is to target Chinese tourists traveling through Canada. If they are exposed to a brand on vacation, the chances are good they will go home and tell their friends about it. That kind of viral marketing can make products stand out in a vast online ecosystem.
Finding success online in China isn’t easy: there are marketing challenges, counterfeiters to fend off and data analytics to navigate. But for businesses that get it right, the rewards can be substantial.
“It’s been great incremental business. Chinese consumers love this product,” said Maurice Bard, founder and CEO of Mediflow Inc., whose firm sells water-based pillows on Tmall and Amazon China.
For Mediflow, which has a background in healthcare clinic sales, e-commerce has become its lifeblood.
“It’s the fastest growing segment of our business. It’s where we are putting most of our energies right now. How can I say it any other way than it’s everything,” Bard said.
Bard is not alone. E-commerce is becoming a crucial channel for businesses across Canada, and if these businesses aren’t invested in the largest online market on Earth, they probably should be.