With an explosion of growth in China’s e-commerce world, the Chinese consumer is as accessible as ever. Taobao, with a 30% share of the e-commerce B2C platform market in China, has proven that TMall is as appetizing to businesses interested in exporting as it is to Chinese entrepreneurs.
Gap Inc. has recently shown its intentions for expansion in China by tripling the number of stores it operates in mainland China. But the prospect of new Chinese customers is not the only driving force behind this decision. Gap has experienced a decrease in sales in North America over the last couple years and is looking to make up lost territory in the much more reliable Chinese consumer market. Starting with its lowest priced brand, Old Navy, Gap hopes to edge its way into the Chinese economy and establish the trade mark as common addition to the Chinese wardrobe.
The double edge of the B2C platform and e-commerce accessibility has taken its toll on Apple. Xiaomi, a cheap cellular alternative to Apple’s iPhone has grown in its Chinese popularity and been dubbed the “iPhone killer.” On TMall, the new Xiaomi reached its 300,000 preorder limit in just 34 hours. One can only speculate what the numbers will be once the phone is released, with preorder numbers being resold on Taobao and other e-commerce websites at higher prices. If the Chinese market is going to be accessed by foreign business, companies can’t sit on their hands and expect their international reputation to bring the sales to them. The initiative of Gap and the troubles faced by Apple are great lessons to take into consideration for any business looking to export to China. Selling a product internationality does not simply happen, it is the result of precise planning and even more nuanced execution.
Gap to triple stores in China by end of 2012
Xiaomi Preorder Numbers Being Sold On Taobao