The Chinese e-commerce market holds great potential for western brands that is still not being exploited to the full.

With revenues of $560 billion in 2015, China is the world’s largest e-commerce market. This is no news. What many do not yet know is that the Internet penetration is still below 50 percent. Taking the enormous purchasing power of the Chinese online buyers into consideration, this points to a potential that western brands should urgently make use of.

This is how significant demand for western products is created: in 2015, 36% of the online shoppers in China purchased products from abroad. With those products, especially European retailers and brands enjoy a significant home advantage, e.g. by prominently promoting their items on multiple marketplaces such as Tmall Global and JD Worldwide.

What is more, cross-border trading policies have clearly undergone a positive development in terms of the import conditions for European brands: Free trade zones with lower tax rates and relaxed market entry regulations have been introduced and pose much lower barriers for entry to the market than is the case when opening independent online brand shops or offline stores.

We highlight the growing importance of global marketplaces in general and China in particular. It is significant to note that from both a brand and retailer perspective future growth is becoming more and more dependent on exports. Marketplaces provide speed-to-market, are trusted by local consumers and are a fantastic way to soft launch a western brand into new territories, particularly in more complicated markets.

The importance of e-exporting cannot be over emphasized. Cross-border sales are growing at a phenomenal rate of 28% year on year. Brands and retailers can stay domestic and work on improving their processes, but they need to be aware that there is a ‘big piece of the pie for the taking in the international domain’.