How to Tap the World’s Largest E-Commerce Market

The market potential is almost limitless. The number of internet users in China surpassed 800 million in the fi rst half of 2018, according to the China Internet Network Information Centre – more than the combined population of the U.S., Russia, Japan and Mexico. 

All those internet users are potential ecommerce customers. In the second quarter of the year, the Chinese internet giant Alibaba, which operates the e-commerce platforms Tmall.com and Tmall.hk, reported 576 million active users. And the market is growing – fast. “The Chinese are among the most enthusiastic internet users, in all age groups,” says Zuest. “Older Chinese are very open to the internet.” 

Zuest distinguishes between two types of e-commerce in China: local and crossborder. The local industry – where Chinese companies sell their products to Chinese consumers on platforms like Tmall – is “a mature market, it has had 15 years to establish itself,” Zuest says. Foreign companies can engage in local ecommerce as long as they have a subsidiary in China. The market, which totalled $400 billion in 2016, is expected to grow to $800 billion by 2020.