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China's e-commerce sector has grown significantly over the past five years. The economy is booming and more than a billion consumers want to buy goods and services. Companies that want to enter this market must follow certain rules. In the following article, we explain how to implement a successful e-commerce strategy in China and which rules to follow.
Conduct market research
Before starting an e-commerce business in China, you need to find out if the Chinese market is ready for your products and if you can reach this target group. For more information, see this page. This is an important step before trying to penetrate the Asian market. Remember that products or services that have been proven in Western markets are not necessarily suitable for the Chinese market. If a new product or service enters the market, the risk is even greater. Chinese consumers have different needs and values than Western consumers. They also have different buying behaviors.
Composition of society
Another important factor for your e-commerce business is the type of business organization you establish in China. Not every company can sell legal products in China. A local company may give you the freedom to do business in China, but it requires compliance with various regulations. E-commerce sellers must obtain an operating license, which can only be done by setting up a wholly owned company.
Experienced local professionals can help in this regard. Horizons can guide you through the incorporation process and help you determine the type of legal entity that best suits your needs. This assistance can speed up the process, increase your chances of obtaining the necessary documents and give you peace of mind that you are fully compliant with local regulations.
Deciding where to locate your e-commerce website
An important decision when setting up an e-commerce business in China is choosing where to locate your e-commerce website. Internet access in China is not free. Foreign websites have to go through the country's censorship system, known as the "Chinese Wall''. As a result, foreign websites are slower than local websites and are not as good as those hosted in the country.
This can generate a negative experience for users and make them choose other platforms for their purchases. If you want to avoid the complicated Chinese government procedures, you can host your website in another country as an alternative to hosting in China. However, there is a risk of diminishing return on investment.
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