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ChinaUnderstanding online shoppers in China in 2017
Delivery Matters
#DeliveryMatters
02
Delivery Mattersfor China
*The World Bank 2016
** ‘Statistical Report on Internet
Development in China’, China Internet
Network Information Center, Jan. 2017
*** ‘Statistical Report on Internet
Development in China’, China Internet
Network Information Center, Jan. 2017
Welcome to Delivery Matters, now in
its ninth year of providing trends and
insights refl ecting UK and international
online shopping behaviour. In this
edition, we re-visit China to check how
the landscape has changed since our
2015 study.
China is experiencing exceptional
year-on-year e-commerce growth.
In fact, it’s fi rmly placed as the largest
e-commerce market in the world.
In 2015, the total online retail transaction
value in China exceeded a staggering
US$ 625 billion, and boasted more
than triple the growth rate of overall
retail sales in China. By 2020, China’s
e-commerce market is anticipated to
be larger than those of the US, Japan,
Germany, the UK and France combined*.
So what’s triggered this growth in
the last two years? Confi dence when
shopping online, from both domestic
and UK websites has climbed, and so
has shopping frequency. The rise of
mobile phone usage has helped drive
this upswing, as broadband struggles
to roll out in homes across China.
UK brands are really clicking with
China’s shoppers, especially those
linked to British heritage. Online
retailers from the UK have a unique
advantage as their goods are perceived
to be of premium quality.
Breaking into this market has been
made much more straightforward
thanks to major Chinese third-party
platforms such as Alibaba’s Tmall.
Royal Mail joined the Chinese
e-commerce boom in 2015 with the
launch of a storefront on Tmall Global
– providing China’s online shoppers with
more access to premium, authentic and
high quality British products.
If they’re not doing so already, UK online
retailers should consider exporting
to China to take full advantage of its
e-commerce growth. At Royal Mail
we can help deliver on that. This report
shows you how.
Nick LandonManaging Director of Royal Mail Parcels
Contents
Introduction
02 Introduction
03 Online shopping trends
04 Top trends in China for 2017
05 Spending is soaring
06 Online attracts big numbers
07 Shopping with confi dence
08 Shoppers prefer using their phones
09 What China’s shoppers love buying
10 Shoppers are fl ocking to online marketplaces
11 The pick of online marketplaces
12 Fewer carts are being abandoned
13 Fulfi lment 14 Delivering on delivery
15 It pays to off er options
16 Free delivery is expected
17 Home is No.1 for delivery
18 Free and straightforward returns
19 China and the UK
20 There’s a lot of love for UK products
21 The best of British
22 It’s a matter of trust
23 The search for UK websites
24 What’s fi lling shopping baskets?
25 Less need for delivery speed
26 What are the barriers to buying British?
27 Getting returns right
28 More confi dence means more shopping
29 In summary
30 Chinese market must-do’s
31 Royal Mail services
32 Services to suit customers abroad
33 Helping your business deliver in China
Fast Facts:China, People’s Republic of
Capital: Beijing
Population: 1.379 billion*
Area: 9,596,961 sq km (3,705,407 sq mi)
Major languages: Standard Chinese
Life expectancy: 75 years (men), 78 years (women)
Currency: Renminbi
Internet usage: 53.2% of the population (731 million) are internet users**
Mobile Internet usage: 95.1% of internet users (695 million) access internet from their mobile devices***
Preferred browser: Internet Explorer
#DeliveryMatters
04
Online shopping trends
Top trends in China for 2017 Ever since it embraced free-market reforms nearly 40 years
ago, China has been booming. E-commerce alone has exploded
to the point where it’s now the world’s largest online market.
As a result, the shopping habits and expectations of China’s
consumers are changing rapidly. Here’s a snapshot of the key
trends in 2017.
The online market is bustling
China’s e-commerce market is a
very busy place, with the average
online shopper purchasing ten
items per quarter. It’s set to get
even busier, with three in four
claiming to have recently increased
their rate of online shopping.
82% of shoppers told us they
made purchases through a mobile
device in the last three months
– so soaring mobile usage plays
a key role in that rise. In good
news for British online retailers,
over half of shoppers purchased
from a UK website in the last
three months – that’s more than
the international average.
Shoppers search for free delivery...
When it’s time to think about
delivery, China’s online shoppers
have extremely high expectations.
Our report tells us that 88% spend
time hunting for websites with
free delivery for online orders.
A challenge remains around
international delivery charges.
... and they love UK products
There’s a real appetite in China
for Brand Britain. Goods made in
the UK are regarded as being well
made and genuine.
of shoppers told us they
made purchases through
a mobile device in the last
three months.
82%
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05 06
A helping handUK retailers can sell
through a Royal Mail
storefront on Tmall – a
business-to-consumer
online marketplace in China.
It’s a quick, easy way to get
products in front of millions
of Chinese consumers,
without the set-up hassles.
See page 32 for more details.
Spending is soaringWe asked online shoppers in China how much they spent online in
the last three months. The results show that it’s particularly high.
In the last three months, the average shopper in China has:
spent a total of £462 (¥4013)* £370 (¥3211*) of this was spent
online (80% of total spending)
There has also been a sharp increase in the value of the average
order, with 78% of purchases valuing between £101 and £1,000. This is
significantly higher than 2015, while purchases under £100 only make up
18% of all orders.
£370£462
**£1 equals ¥8.68
Conversion of Renminbi to £
Sterling was calculated using
6 October 2017 exchange rate.
Online shopping trends
Did you know?Major technological
development, rising
middle-class incomes,
a desire for social status
products, higher local
prices – all these factors
are contributing to driving
China’s shoppers online
more frequently.
Online shopping is hugely popular with consumers in China.
They’re heading for e-commerce sites in ever-increasing
numbers – and they’re buying things regularly. What’s behind
this rapid rise? There are several reasons, from growing
internet penetration and mobile usage, to an ever-expanding
middle-class and hefty local tariffs/taxes.
Frequency of online shopping in the last three months:
Online attracts big numbers
0-9 times 10-20 times More than 20 times
Key
China
United Kingdom84% 12% 5%70% 22% 9%
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07 08
Online shopping trends
Shopping with confi denceChina’s consumers are generally more comfortable shopping
online than the international average.
Did you know?In China, confi dence in
online shopping has risen
30% within two years.
In China, this confi dence has increased signifi cantly from just
two years ago. In 2015, only 29% said they were happy to buy
from websites and don’t consider it to be a risk.
Rising shopper confi dence is one of the key reasons why online
shopping frequency has also increased so much since 2015.
59%say they’re happy to buy from websites and don’t consider it to be a risk
buy on’t t skk vs
47% international
average
79% 70%20172015
%%vs ...compared to
28%in the UK
in 2017
Expert adviceBecause broadband still
isn’t widely available in
China, mobile usage keeps
on rising. It’s clearly become
the preferred way to shop
online, so retailers should
optimise their websites for
mobile use.
Shoppers prefer usingtheir phonesWhen it comes to shopping online, consumers in China love
to use their smartphones. Mobile is the go-to device for four
out of five – that’s nearly twice as many as in the UK.
Percentage of China’s shoppers making a purchase using their smartphone:
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09 10
Online shopping trends
What China’s shoppers love buying Almost two in three shoppers in China have bought clothes
online, while food and drink, footwear and toiletries are also
popular – outperforming books and personal electricals.
What’s on the list for shoppers in China?
61% 51% 44% 36%46% 23% 26% 24%
Key
China
International average
Clothes Food and
drink
Footwear Toiletries
Did you know?80% consider delivery ratings
infl uential when shopping in
online marketplaces vs 54%
in the UK.
China International average UK
VsVs86% 80% 69%
Shoppers are fl ockingto online marketplacesOnline marketplaces are becoming more successful as they
keep increasing trust levels with shoppers.
Percentage of shoppers who use online marketplaces:
One way that online marketplaces are building trust is by combating the supply of counterfeit goods
• TMall (China’s most popular B2C platform and owned by Alibaba) requires
sellers to own licences for products sold. Only companies can register for
a shop on TMall or TMall Global, which caters for international brands
• JD (JingDong) was launched in 2004. It’s also a B2C platform, and
companies wanting to open a store need offi cial documents proving
they own the brand and products, or are offi cial distributors
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11 12
Online shopping trends
The pick of online marketplaces
Fewer carts are being abandoned
Tmall is the leading online marketplace in China with 78% of
marketplace shoppers saying they’ve bought something there.
Jing Dong (70%) and Alibaba Taobao (58%) are also popular.
This makes an interesting comparison to the UK marketplace
landscape, which is dominated by Amazon (UK - 82%) and
eBay (UK - 70%).
In China:
The report shows us that in China, cart abandonment is much less
frequent than the international average. It’s also on the decrease
compared to our 2015 China report.
Why are carts being abandoned?
The most common reason for cart abandonment in China has nothing to do
with delivery. It’s about shoppers fi nding a better off er – a reason that scores
a lot higher than in all other countries we surveyed.
When delivery is cited as a reason for cart abandonment, it’s usually because of high cost or long timescales.
32% are unhappy with delivery charges
26% say it takes too long for an item to be delivered
Did you know?TMall and Jing Dong
dominate China’s online
marketplace landscape
in the same way Amazon and
eBay do in the UK.
Did you know?The main reason for
cart abandonment is
shoppers fi nding a
better deal elsewhere.
49% 12%
of marketplace shoppers
have used Amazon
of marketplace shoppers
have used eBay
25%of China’s shoppers abandon their carts
frequently vs34% in 2015 &
38% international
average
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14
92%of shoppers in China agree that they’re more likely to shop again with an online retailer if they’re satisfi ed
with the delivery.
Fulfi lment
When China’s shoppers are satisfied with their delivery,
they’re more likely to buy from retailers again in the future.
So it pays to get delivery right the first time.
Delivering on delivery
vs91% international
average
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15 16
Fulfi lment
It pays to offer optionsChina’s shoppers have high demands when it comes to delivery,
with many of them putting speed at the top of their list.
Expert adviceWith online shopping in
China growing year-on-
year, it’s a must for retailers
to meet shoppers’ delivery
demands for satisfaction
and reliability.
89%say it’s important
to have a specified
delivery date.
90% would shop online more
if there were a wider range of delivery options.
%ortant
ecifieed
ate.e.
if there were a wider range ofof ddelelivivery options.
76%would like to be offered
same day delivery.
Online shoppers in China are cost-conscious, especially when
it comes to delivery. The report reveals that two in three expect
free delivery on every item they buy.
Free delivery is expected
Did you know?Urban and suburban
shoppers in China have
similar expectations of
free delivery.
say they expect no
minimum spend to qualify
for free delivery.
say they search for
websites that offer
free delivery.
66% 88%
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17 18
91%are more likely to
shop if there’s a clear returns policy
92%say it’s important
to be able to return items for free
Fulfi lment
Home is No.1 for deliveryWhen it comes to delivery location, home is the top choice in China.
And there’s been a noticeable increase in that preference since our
last report in 2015. A drop in online shoppers wanting their items
delivered to work could be explained by an average commute time
within main cities of 90 minutes.
Percentage of online shoppers prefering to have purchases delivered to their homes:
...compared to 68% in the UK
50% in 201559% in 2017 50
vsprefer having items delivered
to work, vs 36% in 2015.
22%
Free and straightforward returns Returns are far more important to China’s shoppers than two years
ago, with over nine in ten more likely to shop with a retailer that
has a clear returns policy.
Expert adviceRetailers off ering free
returns can expect more
sales and repeat business
from shoppers in China.
ReturnRetu
vs86% in 2015
items for fr
vs86% in 2015
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20
China and the UK
bought something from the
UK in the last three months,
vs 41% in 2015.
55%
There’s a lot of love for UK products To shoppers in China, UK products are seen as genuine and
good quality. As a result, over one in two shoppers have bought
items from the UK within the last three months. This is a lot
higher than the international average, and has also risen
signifi cantly since 2015.
In the last three months, the average online shopper in China buying from a UK website has:
5x£312
shopped fi ve times
(signifi cantly higher than
the international average)
spent £312
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21 22
87%like to buy British brands
(significantly higher than in 2015, and the international
average).
The best of BritishWith increasing disposable incomes, traditional British brands and
products are more and more popular with shoppers in China.
Attitudes towards UK shopping:
gher than in ternational e). 76%
trust items bought from UK sites not to be counterfeit
86%buy from UK websites when local products
aren’t available.
83%find UK items to be much cheaper than
local ones
51% 35% 33%
trust the marketplace more say the item was cheaper
on this website
say the item was only
available from this website
Did you know?The attraction of UK brands
represents massive
opportunities for UK online
retailers to export to China.
China and the UK
It’s a matter of trustOnline shoppers in China have a high opinion of UK brands and
products, saying that trust and authenticity are the main reasons
for buying them.
Most common reasons for buying British rather than local:
42% say they trust UK brands
41% say they know the item will be genuine
40% think items are better quality
Reasons for choosing an online marketplace for UK products:
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23 24
China and the UK
Did you know?These fi ndings show the
importance advertising
plays in prompting
shoppers to look for
specifi c UK retailers.
The search for UK websitesChina’s shoppers fi nd UK retail websites in lots of diff erent ways.
At the front of the queue are search engines, which are still the
most popular way for online shoppers to discover UK goods.
How China’s shoppers fi nd UK products:
44% - search engine
42% - word of mouth
38% - through a domestic website selling similar products
36% - through a related website
30% - advertising
30% - social media (signifi cantly higher than the international average)
It’s interesting to note that fi nding UK websites to shop from isn’t necessarily
something that shoppers in China set out to do. They’re actually far more
likely to buy from a UK retailer while shopping generally (53%) than they are
to look for a UK retailer from the start (38%).
Reasons for choosing an online marketplace for UK products:
Alibaba’s Tmall Global online marketplace was launched in March 2015.
It’s a business-to-consumer retail platform that lets brands from outside
of China sell directly to millions of Chinese consumers.
For UK retailers, it’s a quick, easy and low-cost way to get their products
in front of China’s shoppers without facing challenges such as cultural
differences, translation or set-up costs. Find out more on page 32. fi nd UK products via
a search engine.
44%
What’s fi lling shoppingbaskets?The most popular items for shoppers in China to buy from
UK websites are clothes, accessories such as handbags,
and toiletries or makeup.
The most popular purchases from UK websites:Expert advice‘British’ branding appeals
in China because of the
association that the UK
has with luxury, quality
and authenticity.
39% 32% 32% 23% 12%
Clothes Accessories
(e.g. handbags)
Toiletries/
makeup
Footwear CDs, DVDs,
computer
games
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25 26
Did you know?Less than a quarter of
China’s online shoppers
abandon their cart due to
long delivery times. So
there’s clearly some
leniency towards delivery
speed from UK retailers.
Less need for delivery speedGiven the sheer size of their country, it’s only natural that China’s
online shoppers have realistic expectations about delivery speed.
The report shows that customers usually expect to wait an average
of seven days for an item to be delivered a� er ordering it from
a UK website.
Expected delivery time of a UK website purchase:
of online shoppers expect
international deliveries to
take six days or more.
72%32% 27%25% 13%3%
1-3 days 4-5 days 6-7 days 8-10 days 11+ days
What are the barriersto buying British?35% of China’s online shoppers are happy to buy from a UK website
but still think there’s some risk involved. While international
delivery costs and customs charges are key factors that may
prevent shopping, a non-translated website and lack of trust
with the retailer are also barriers that need to be overcome.
Key reasons why shoppers in China avoid UK products:
Expert adviceTrust is a big reason why
China’s online shoppers
avoid buying UK products,
highlighting the need for UK
retailers to provide them
greater reassurance.
A helping handRoyal Mail International
Standard is the cost-
eff ective way of sending
parcels abroad, off ering
delivery to China within fi ve
days. See page 32 for more.
39%say international delivery
is too expensive
%onal deliveryy pensive
China avoid UKUK pproroduductcts:
33%lack trust or
familiarity with the retailer
38%because the
website is not translated
35%have fear of
hidden charges
China and the UK
#DeliveryMatters
27 28
Getting returns rightWe can see from the report that returns are more important
to China’s shoppers than the international average.
More confi dence meansmore shoppingWe explored the reasons that would encourage shoppers in
China to buy more from the UK. It’s clear that UK retailers should
off er free international returns, make sure payment can be made
in local currency, and off er the option to translate their website
into Chinese.
How to encourage more shopping from UK sites:
39% want free international returns
36% want the ability to pay in local currency
34% want full tracking from the UK
26% want a website translated
China’s online shoppers are willing to buy more from the UK as long as
retailers have taken steps to increase their confi dence.
Did you know?Return rates in China are
generally high – and they’re
rising. It’s no diff erent for
items that shoppers buy
from UK websites.
of those who buy items
from the UK have
returned something
vs 21% in 2015
vs 40% returning items
domestically.
30%
A helping handRoyal Mail’s TMall store
off ers UK retailers
support with returns,
exchanges, refunds and
content translation.
China and the UK
91%consider it important to be able to return
items for free
92%would be more likely to shop if there’s a clear
returns policy
vs86% international
average
returns poli
vs85% international
average
#DeliveryMatters
30
In summary
Chinese market must-do’sGo mobile
Make mobile optimisation a top priority if you want to target online shoppers
in China. They use their smartphones far more than any other device.
Trust is the trick
With vast disparity across the market, China’s shoppers have varying
delivery expectations. So it’s best to off er a wide range of options for them
to choose from. Providing clear, translated information and straightforward
returns policies helps to build trust – which converts to repeat purchases.
Offer value, be visible
Off ering the best value international delivery charges can be the key to
encouraging China’s shoppers to buy. Additionally, links with relevant
Chinese retailers can help boost UK brand visibility. And a range of
advertising techniques should be considered to increase the likelihood
of shoppers seeking out UK retailers.
Cash in on increasing confi dence
In China, online shopping confi dence has increased a lot over the last two
years. In 2015, only three in ten online shoppers did not consider it a risky
activity. That has since doubled to six in ten.
#DeliveryMatters
32
Royal Mail services
Services to suitcustomers abroad
About this research
Royal Mail offers delivery to over 230 destinations worldwide,
using the local postal provider in that country. Services include:
Royal Mail International Signed
Peace of mind knowing your item
will be signed for on delivery.
Tracking to the point the item
leaves the UK.
Items are only handed over at their
fi nal destination once we have a
signature from the recipient.
Royal Mail International Standard
An economical way to send
parcels abroad with a choice
of sorting requirements.
Delivery to rest of the world outside
Europe in 5 to 7 working days.
Compensation included.
Free returns for undelivered goods.
Storefront presence on Tmall
Selling through the Royal Mail
Tmall store gives UK online
retailers access to:
• the largest third-party
e-commerce platform in China
• product marketing and
content translation
• reliable delivery from UK to
China by Parcelforce Worldwide
• support with returns,
exchanges and refunds
Find out more about the
Royal Mail Tmall storefront
at royalmail.com/tmall
87%
Independently conducted by
Trinity McQueen, this research
was based on a sample group of
1,500 online shoppers in China
who had purchased items on the
internet in the last three months
(other than groceries).
They completed a 14-minute
survey, optimised for mobile
and tablet, between 30 April
and 13 May 2017. This research
is representative of online
shoppers in China.
#DeliveryMatters
33 34
Royal Mail services
We can help your business deliverThanks for reading Delivery Matters 2017 – we hope you found it useful.
If you’d like to fi nd out more about how we can help with your deliveries, get
in touch with your Royal Mail account manager, or call us on 08457 950 950*
If you’d like to fi nd out more about our research, or download the rest of our
series, visit royalmail.com/deliverymatters
2017
2015
2016
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and used for training and compliance
purposes. Calls cost 5p per minute
plus your telephone company’s
network access charge.
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