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China’s Online Marketplaces. It’s Counterintuitive.

Posted in China Business

A few days ago, while on the elliptical at my Shanghai hotel, I watched a business show roundtable with three participants discussing China’s online marketplaces.  It was riveting and I tried taking notes with my iPhone.

There were three participants in this roundtable discussion, plus a moderator.  One was from Taobao, one from Yihaodian, and one from Nielson Research.

What I found so interesting was how all three talked about how different China’s online buying is from the United States.

At one point the moderator (a Chinese-American whose name I have forgotten) noted how “chaotic” Chinese websites look as compared to the clean-line minimalist approach of American websites.  The participants all laughed, agreed, and then explained.  ”Look at Chinese brick and mortar stores” one participant said.  ”They are colorful and chaotic.”  Another talked of how when he first set up his company’s Chinese website, he modeled it on a US one and made it clean and simple.  The Chinese consumers complained.  They wanted chaos.

One participant said that he set up his site to be the opposite of Ebay. Ebay was clean. This site was chaotic.  Ebay made communicating with sellers difficult.  This site put its chat feature central.  Ebay charged for listings. This site made listings free. Ebay had slow delivery.  This site delivered that day by moped.  Ebay would show listings that were about to end first.  This site would show the newest listings first.

All participants talked about how incredibly price sensitive Chinese consumers are.  One talked of how “time isn’t money” for most Chinese.  They also agreed on the importance of having a flagship physical store in China as an adjunct to online selling. They said China’s consumers want to be able to trust their sellers and a physical store helps achieve that trust.

Fascinating stuff, with implications for anyone doing business in China.

What do you know?

  • http://www.chinabusinesscast.com/ JP

    Interesting observations Dan. There’s something about Asian languages that makes people want webpages to be super cluttered… if you look at popular Japanese or Korean web pages, they’re also quite “chaotic”.

    I was talking with my friend the other day about my experiences living in China and I was saying: one major advantage of shopping online is the relative transparency and trust versus shopping in-person. You can easily compare prices to know what the “market price” is for an item. The market is usually quite efficient. Also, since many store owners care a lot about their store feedback, they try hard to provide a good product and good service… shopping in-person can be quite a crap shoot sometimes: you can easily overpay for a shoddy product (and not being a local, I usually do). I believe that’s also one of the factors driving online sales.

  • http://twoamericansinchina.com/ Amanda Roberts-Anderson

    I’ve been thinking about the similarities between Chinese movies and Chinese online shops. I can’t stand Chinese movies mainly because the plots are so contorted. They will have several side stories going on that have nothing to do with the plot, threads that lead no where, and even multiple endings. The websites are the same way, crazy and make no sense. There must just be something about the Chinese mindset that finds comfort in chaos. Chaos can even be found in post-revolutionary embroidery work. I need to look into this more.

  • http://journeyeast.org/ Journey East

    Never figured out why Chinese prefer cluttered sites, but they do. We own several hundred domains and not a single one targeted to the Chinese market fared well until we loaded it with javascript advertising, snow flakes, and other interesting gadgets..

    What we are waiting for and have largely seen improvements in, is the means of making payments online and the ability of the Chinese consumer to purchase abroad as the mindset towards that end begins to change as the value of those price points you mention sink in, and Asian consumers begin to see the advantage of going around third parties and and reaching their suppliers directly. Particularly in the service and education markets..

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    Great article, Dan.

    What I’ve found is the following:

    1) Cluttered website are not per se cluttered: someone once mentioned a research to me in which they found that characters (e.g. korean, chinese, japanese) come over as cluttered to westerners. Not so much towards native speakers from those respective countries.

    2) Many options and text on the homepage is helpful: People prefer to find what they’re looking for on the homepage instead of clicking through pages and having to wait constantly. Hence the many options on the homepage of a website. That also explains why whenever you click a link it opens in a new tab on your browser; that way you can keep browsing the original page while waiting for the new page to be loaded.

    3) Not ALL successful websites are cluttered or chaotic: I find many websites not cluttered at all. They definitely show more text than websites in the West, but I also prefer to find more on the homepage because that shortens my ‘search time’ on the website. Here are some -in my opinion- not-too cluttered websites: Elong.com / Ele.me/ Dianping.com

    4) Flagship stores needed for success: this is an interesting topic and I would love to learn more about it. Some online stores did not have physical stores initially, e.g. the very successful kids fashion company Greenbox on Tmall. Others swear that physical stores make or break your business in China. Please share if you have any information on this topic!