Helping African Brands Enter the Chinese Market
The simple answer as to why China’s e-commerce market is such a big deal is that China has the world largest and most diverse e-commerce market. In 2021, China’s e-commerce market took up more than half of the global online sales! E-commerce retail sales also reached a whopping 13.1 trillion yuan (about 2.06 trillion USD) in 2021 and are continuing to grow at a rate of 20% from 2020 despite Covid-19 related restrictions. Its size is generated by China’s vast force of online shoppers (more than 800 million), which spend more time on mobile apps than most of the world (5.1 hours per day compared to 4.1 in the USA in 2021). This means that China’s e-commerce market is still a no brainer for foreign brands and will be into the future.
China’s global leadership in tech innovation has unsurprisingly led to China’s e-commerce market becoming inundated with fun, interactive and convenient features to keep the Chinese market hooked such as live streaming, the metaverse, social commerce, interactive games, and the most extensive and high-speed logistics systems in the world.
E-commerce is also becoming the principal sales and promotion channel for high-end African brands. There are now an increasing number of e-commerce shops dedicated to selling premium African products, such as roasted nuts and coffee, tea, wines and spirits, fashion and jewelry, skincare and homeware, as well as China-wide shopping festivals to promote these platforms, brands and products, which is significantly increasing demand for African products amongst Chinese consumers.
So, let’s take a look at some of the most noteworthy platforms and features.
China’s biggest and best e-commerce platforms for African brands
The e-commerce giants
The first thing to note is that China’s e-commerce platforms operate through mobile apps. Although website versions exist, Chinese consumers shop almost solely on mobile apps. This is why standalone brand websites gain little traction in China and also why brands focus their sales and marketing strategies on e-commerce platform apps.
The number of e-commerce platforms in China is, unsurprisingly, enormous, but to make it easier, there are two giants that African brands should be taking note of – Alibaba and Jing Dong (JD) – which together take up more than 60% of China’s market share.
Alibaba (Taobao, Tmall and Tmall Global)
Alibaba is one of the oldest, most established, and probably the most famous e-commerce platforms in China. It generated $1,182 billion in 2021 and had 882 million diverse registered users in primarily 1st and 2nd tier cities of which 80% are 30 or younger. It has two main market segments – Taobao and Tmall. Taobao is a large online marketplace for all sorts of products for all kinds of consumers, but especially food & beverage and fashion. Tmall on the other hand, features more premium products for higher spending consumers, such as luxury fashion. Tmall also has the largest cross-border e-commerce platform in China, Tmall Global, where Chinese consumers can buy directly from foreign brands in their country of origin. All 3 segments are also the official place where Chinese consumers learn about the brand itself.
Tmall also has an e-commerce store dedicated to selling premium African products from all categories, which is operated by the China-Africa Economic and Trade Cooperation Promotion Innovation Demonstration Park in Hunan’s free trade zone for Africa-China trade. It is commonly known as 高桥优选, roughly translated as ‘Gaoqiao Preferred.’Gaoqiao Preferred is leading the way in promoting and selling high-end African products to Chinese consumers in partnership with the Chinese government. Contact Africa Reimagined to learn how we can support you with selling on Gaoqiao Preferred.
Jing Dong (JD)
JD has been the largest competitor to Alibaba for many years. Originally, it was the go-to for technology and electronic goods, but it is now just as popular for purchasing homeware, food & drink and FMCG products. Its 567 million users in 2021, were 60% and 40% female, and also popular amongst those in their 30s. JD has its own logistics service that provides end-to-end logistics solutions. This gives it a supply chain advantage over other Chinese e-commerce platforms, which makes it extremely attractive to sellers and customers alike. JD-Worldwide is JD’s cross-border e-commerce channel, which benefits from the same in-house international and national logistics service, which makes selling to Chinese consumers extremely convenient from brands across the globe.
Africa Reimagined and Gaoqiao Preferred are both opening e-commerce stores dedicated to premium African brands and products in 2022 – watch this space!
(Gaoqiao Preferred and Kiliselect’s e-commerce stores on Wechat).
There are also several more specialized but still hugely popular platforms that are e-commerce sales platforms combined with either short video/live streaming apps or social media apps that are worth paying attention to.
Douyin is China’s version of TikTok and is also a short video app. In recent years, Douyin has also been transformed into the fastest growing e-commerce sales platform, which generated $126 billion in 2021. Most products (primarily fashion and beauty) are sold through livestreaming to 670 million registered users from all tier cities and income levels. Customers can ask the live streamer questions and purchase directly from them. Chinese consumers also spend a great deal of their time on Douyin – on average 88 minutes per day in 2020!
(A livestream for beauty products on Douyin).
Wechat is the single largest social networking platform in China with over one billion active users. Wechat is a ‘super app’ that allows its users to do everything from pay their utilities, order a taxi and most importantly, do their shopping. Brands can set up their own individual store using a ‘mini program’. 400 million Wechat users can purchase through mini programs, which generated $247 billion in 2021 of which fashion is the largest sector. The advantage of an individual store is that they can be highly personalized, which allows brands to educate their customers about the products and brand story. However, individual stores are hard to discover unless the brand has a large social media following on its official account and a strong presence in China.
RED is essentially Instagram, Pinterest, and Shopify in one. In 2021, it had 300 million registered users of which 85% were female and 95% aged under 35. Users go on RED to look for and share product information, user experience, reviews, tips of usage and discount information. RED has a huge KOL community, which are extremely influential, which has led to countless foreign brands utilizing the platform to market their products in China. Most users purchase fashion and beauty, which generated $1 billion in sales in 2021. Importantly, brands can also link their content to Taobao/Tmall.
China’s e-commerce market’s unique tools and features
Although they were invented in the US and Europe, China has become the market leader of the shopping festival. China’s biggest and most infamous shopping festival, ‘Singles’ Day,’ or ‘Double 11’ (it falls on November 11) is two and a half times bigger than Cyber Monday and Black Friday combined. However, there is an almost continuous stream of other major shopping festivals held throughout the year, such as 618 which takes place on 18th of June, Women’s Day on 8th of March, Double 12 on 12th of December and increasing number of shopping festivals held by e-commerce platforms themselves.
Online shopping holidays have been one of the driving forces in the expansion of China’s e-commerce market. They are huge retail events where both platforms and sellers offer discounts and other benefits to buyers. These festivals present great opportunities for foreign brands to increase their visibility if they launch effective festival themed market campaigns because of the high shopping enthusiasm among Chinese consumers. At Africa Reimagined, we strongly recommend and support African brands with planning for and developing marketing campaigns for China’s lucrative shopping festivals.
(Sales from the 2020 Double 11 shopping festival)
Live streaming e-commerce
Live streaming is transforming e-commerce in China. In 2016, Taobao introduced live streaming as a novel approach to online shopping which offers viewers a virtual shopping experience whereby they can watch, interact with and buy from people who introduce the products to their audience in real-time. Since 2018, live streaming has very rapidly grown in popularity and accounts for an increasingly larger share of online retail commerce sales. Live streaming e-commerce grew by 160% in 2020 and generated a massive $300 billion in sales in 2021. To give an idea of how impactful livestreaming can be, in October last year, China’s top live streamer host, Austin Li, sold over 360 million pieces products in one night, which reached a transaction volume of 10.6 billion Yuan (about 1.6 billion USD). The largest live stream e-commerce platform is still Alibaba followed by the short video app, Douyin. The liver streamers are usually KOLs, celebrities as well as entrepreneurs and they can have a huge influence over customers’ purchasing behavior.
Unsurprisingly, live streaming has become a hugely popular sales tactic with foreign brands, including African ones. For example, during a live streaming event featuring Austin Li and Ethiopian Ambassador to China, Teshome Toga, 11,292 bags of packed Ethiopian coffee sold out in just 5 seconds. With rapid advancements in 5G and AI in China, it is expected that live streaming e-commerce will continue to take an even bigger part of the market share.
(Click here to view a video introducing live-streaming e-commerce.
(Live streaming at three different online shops where buyers can send questions about the products and the live streamer will answer the questions and present the products)
China, unsurprisingly, has the largest social media population globally, as well as one that spend more time on their phones that most other nations. This has given rise to a whole new style of online shopping – social commerce, which is essentially buying via social media platforms. This encourages people to not only talk with their friends, but also share product information, post about their shopping experience, and browse purchases made by their friends or people they follow. The most platforms for social commerce are RED and Wechat.
As mentioned above, on RED users socialize by sharing product information, user experience, reviews, tips of usage, discount information and so on. Wechat encourages users to share product information whilst chatting, as well as posting product information and reposting ads on their ‘timelines,’ which their friends can view.
Social commerce is tipped to be one of the fastest growing and diversifying e-commerce feature, as technology helps to make e-commerce and social media even more integrated, for instance, through AI. This has led to many international brands increasingly focusing on launching big marketing campaigns on social media platforms, as well as more traditional e-commerce marketplace platforms.
(Users sharing ads on their Wechat timeline).
China’s vast, diverse, and rapidly growing e-commerce market also reflects the resilience of the Chinese marketplace. Although there have been pockets of Covid-19 related disruptions in Shanghai and more recently Beijing, these lockdowns are isolated and have not impacted consumerism across China as a whole, which has been very much ‘business’ as usual. Furthermore, lockdowns have even shown to boost e-commerce sales, as people are people are left with no choice but to turn to online shopping. For this reason, experts are convinced that any consumer or economic slowdowns will be temporary and China’s e-commerce market and luxury market as a whole will continue to flourish.
Visit the Africa Reimagined website to learn more about how we can help you take advantage of these China market entry opportunities or to book your consultation.
Freddy is a research intern in Africa Reimagined. He focuses on Chinese market research and wishes to assist African high-end brands to achieve success in China. He also has interest in international relations. Freddy is pursuing a bachelor’s degree in economics.
Sena Voncujovi is a research and policy analyst at Development Reimagined. Voncujovi specializes in global health issues, Japan-Africa relations, and China-Africa relations. He served as the Editor-in-chief of Peking University’s Africa Think Tank (PATT) during his master’s in International Relations & Politics as a Yenching Scholar. Voncujovi previously advised the Ghanaian government for the 2019 TICAD 7 Conference held in Yokohama. He is the co-founder of Jaspora, Tokyo’s largest community of African diasporan diplomats, changemakers, professionals, students, and business people.
Fikayo Akeredolu is a finance and research analyst at Development Reimagined. She is studying for a PhD in Politics & International Relations at Oxford. Her research focuses on how African countries can better leverage economic and political power. She has experience in financial products from Bloomberg LP and Thomson Reuters. She is also a Schwarzman Scholar.
Yixin is a Junior Research Analyst and her focus areas is on public-private partnership and entrepreneurship. She has over three years of working experience in both private and public sectors in Ethiopia. She was the China Liaison Officer for project ‘Partnership for Investment and Growth in Africa’ at International Trade Centre, where she accumulated rich experience in investment and trade promotion.
Ivory is a Kenyan lawyer with experience in policy research and analysis. She also supports the communications team through liaising with African brands, creating graphic content and other external outputs at AR. Ivory speaks English, Swahili and French
Patrick is an International Trade Policy and Trade Law Expert with over 5 years of experience. His expertise includes trade law, trade policy analysis and regional integration. He is currently engaged with Development Reimagined as a Senior Trade Analyst, and he applies his Trade Policy expertise to AR’s work. Patrick has previously consulted for the East African Community, UNECA and for the Kenya Ministry of Trade.
Jinyu is a dual-degree Master’s student at Sciences Po & Peking University. At Africa Reimagined, Jinyu produces research to foster better mutual understanding between African clients and Chinese consumers.
Yike Fu is a Policy Analyst and has been responsible for leading numerous areas of work, including on debt analysis in Africa and beyond, and China-Africa trade and investment logistics and analysis. She is the co-author of “African Debt Guide”, in which she challenged the narrative that Africa is in the midst of a new debt crisis by analysing data back to the 1970s and adopting new metrics to present the real story behind the data. She also developed a benchmark to compare the financial distribution of development partners such as the UK, US, Japan, France and China in Africa. Prior to her role at DR she worked at the International Finance Corporation and African Union Representational Mission to the US. She holds a Masters in International Affairs from George Washington University.
Rosie is the Project Manager of Africa Reimagined (AR) at Development Reimagined (DR) where she supports high-end African brands with entering the Chinese market by operating services such as trademark protection, Chinese market research, Chinese partnership building, and Africa to China logistical support and import/export services. Rosie has worked with DR for over two years now with proven success in helping high-end African brands navigate the Chinese market. She is extremely passionate about her work because more African brands selling in the Chinese marketplace means African countries can export MORE value-added goods, create MORE jobs and foster MORE innovation in African countries.
Leah Lynch is Deputy Director of Development Reimagined (DR), and head of the China office. Leah has over 10 years of experience in development and has lived in China for over 8 years. Leah has also travelled extensively around Asia and Africa for research. Leah supports the strategic direction of the team across China, with a mission to deliver high quality research on sustainable development and poverty reduction. Leah is also Chair of the Sustainability Forum at the British Chamber of Commerce in China, providing direction on sustainability initiatives for British and Chinese business. Leah has also consulted on various evaluations on UK aid (ICAI) and is a specialist on development cooperation from the UK and China. Leah has also consulted on various UN projects, including providing support to the UN China team during the COVID-19 Pandemic. Prior to DR, Leah was at the United Nations Development Programme (UNDP) China, supporting the UN’s portfolio on communication strategies, China’s South- South Cooperation and the Belt and Road Initiative (BRI). Before UNDP, Leah lived and worked in Kenya developing sustainable water policies for the Kenyan government.
Hannah Ryder is the Founder & CEO of Development Reimagined. A former diplomat and economist with 20 years of experience, named one of 100 most influential Africans in 2021, she is also Senior Associate for the Africa Program of the Center for Strategic International Studies (CSIS), sits on the Board of the Environmental Defence Fund, and is a member of UAE’s International Advisory Council on the New Economy. Prior to her role at DR, Ms Ryder led the United Nations Development Programme (UNDP)’s work with China to help it scale up and improve its cooperation with other developing countries, including in Africa. She has also played various advisory roles for the UN and OECD and co-authored the seminal Stern Review of the Economics of Climate Change in 2006.
We support our clients throughout the whole onboarding and sales process on Chinese e-commerce platforms including registration, international and China-mainland logistics, storage, payment transfers, and marketing & advertising strategies.
In addition to supporting our clients with onboarding onto e-commerce platforms or developing their own WeChat stores, we also have our own Africa Reimagined e-commerce stores for our clients to sell on.
Kiliselect on WeChat Stores: Africa Reimagined launched on Kiliselect, which is a foremost e-commerce store for premium African products in China and the Chinese branch of East Africa’s Kilimall. It houses brands from a range of sectors including food and beverage, skincare and homeware. Kiliselect is found on WeChat Stores, which gives the store access to 1.2 billion active WeChat users across China.
JD-Worldwide: Next year, Africa Reimagined will open the first ever flagship, pan-Africa e-commerce store for premium African brands on JD-Worldwide, the cross-border e-commerce platform of China’s largest retailer, JD.com. It will sell exclusively luxury African brands from a range of sectors including, fashion and jewellery, food and beverage, skincare. and homeware.