Is your business looking to do business in China? You may want to investigate China’s quickly expanding home shopping industry which, in 2012, was $9.3 billion. Sellers of consumer goods, food products, nutritional supplements, and cosmetics may find this type of venture particularly lucrative.
China has 39 home shopping networks on television. Most of these networks are for regional viewing, but nearly a dozen have national TV licenses and can be viewed anywhere in the country.
Chinese customers are becoming increasingly demanding and desire quality, reliable delivery and, above all, convenience. Chinese buyers enjoy the opportunity to compare prices and conduct purchases without having to leave home. And the exposure from television coverage prompts shoppers to demand high-quality, genuine, U.S. brand-name goods. It helps, too, that China’s disposable incomes are rising, so buyers are a bit less price-conscious.
What Chinese Buyers Want to Buy
Chinese consumers are open to buying just about anything from home shopping networks: non-perishables, baby formula, organic foods, personal healthcare items, and agricultural products. They’re also more likely to spend on products that have the appealing American distinction – the more your product (jewelry, clothing, etc.) reflects its U.S. origin, the better.
Earning Their Trust
For the most part, the home shopping products that sell well here in the U.S. will be popular in China as well. QVC Inc., partnering with CNR Mall, boasts a China viewership of 70 million homes (an 83 percent growth in just one year).
It’s not all smooth sailing, however. Historically, China’s home shopping networks have reportedly made false product claims in advertising. But shoppers have become wary and more demanding, seeking out reputable products and quality customer service. U.S. exporters will have to work very hard to build trust among Chinese customers.
Home shopping networks compete primarily with ecommerce platforms. As Chinese consumers become more comfortable with in-home ecommerce purchases, they’re less likely to feel intimidated by the home shopping experience.
Getting Product There… and Getting Paid
Additionally, the home shopping experience continues to experience growing pains with unreliable delivery infrastructure and inadequate payment systems. Most Chinese cities must rely on multiple local couriers and transport carriers that can drag out delivery times.
When the product does finally arrive at its destination, there is the issue of payment. Cash-on-delivery is used far more often than credit cards (50 percent of payments versus 38 percent). The COD system is preferred by a culture unaccustomed to buying sight unseen.
Most Chinese consumers expect to be able to inspect a product before finalizing a purchase, and they have the habit of purchasing an item in all of its variations only to keep one and return the rest. To meet these needs, home shopping inventories (and their associated costs) can skyrocket. U.S. customers also buy multiple items to “inspect,” but since they’ve already electronically paid for said items, they’re less likely to return them.
Want to get your foot in the door of the China home shopping industry? Contact to the experts at Walker World Trade to get started.