China is a market with more than 500 million consumers, flush with disposable income and eager to try exciting new international brands that fit their lifestyles. 

And it offers opportunities for UK retailers.

In the UK, the view from the high street isn’t particularly bright. Retail sales were weaker in March and have struggled since late last year.

Already this year, nearly 650 stores or restaurants have closed or are in danger of closing. And brands and retailers are still deciding whether ecommerce is friend or foe.

“China’s middle-class is extremely attractive. Already it’s about five times the size of the UK’s 65 million population and it looks set to nearly double in the next few years”

In China, retail sales are forecast to grow just over 10% this year to RMB40trn (£4.59trn). That is more than 1,000 times the total £406bn retail spend in the UK last year.

China’s middle class is extremely attractive. Already it’s about five times the size of the UK’s 65 million population and it looks set to nearly double in the next few years. And middle-class consumers want quality international products.

All that means China has a very healthy, fast-growing ecommerce sector. Growth surged 32% to RMB7.18trn (£824.36bn) last year.

On Alibaba’s platforms alone, more than half a billion customers bought products from more than 60,000 international brands.

Money to spend

International brands from sectors such as healthy produce, beauty, skincare, mother-and-baby care, apparel, vitamins and supplements are highly desired by Chinese consumers in their 20s and 30s.

They have spending power, they’re well-travelled and they like to discover new brands and make lifestyle choices when they’re shopping.

Barcelona-based cosmetics company MartiDerm is a good example. It started selling its ampoules of beauty serum on Tmall Global.

At last year’s 11.11 Global Shopping Festival, MartiDerm sold more than 5 million ampoules.

“They have spending power, they’re well-travelled and they like to discover new brands and make lifestyle choices when they’re shopping”

Its China sales have reached one unit every 2.49 seconds. The 65-year-old company recently added two production lines exclusively to meet Chinese demand.

In April, Yves Saint Laurent Beauté sold RMB38m (£4.4m) in its first 24 hours on Tmall, and built a following of 1.2 million shoppers.

And here in the UK, there’s the success story of organic baby food brand Little Freddie. It started in 2015 as an unknown brand in China and launched on Tmall featuring 10 of its products in a flagship store.

It has since grown into a nationally recognised premium brand in China, both online and offline.

New retail

Little Freddie still sells via its flagship online store today, but it is also offering product lines through more than 2,500 offline stores throughout the country.

This world of integrating offline and online experience we call ‘new retail’.

You don’t just enter the China market overnight. It requires thinking about who your customers are, learning and understanding what they want and how to best position your brand and products, often in different ways than before.

It’s essential to be ‘fully mobile’, as this is how China shops.

During last year’s 11.11 Shopping Festival, more than 90% of the transactions were conducted via mobile. And the key to new retail is the mobile phone, which provides the critical connections between online and offline retail to win customers.

“You don’t just enter the China market overnight. It requires thinking about who your customers are, learning and understanding what they want and how to best position your brand and products”

You will increase your chance for success in China with the right customer analytics and insights that make you and your business smarter and more efficient.

Whether that is the choice of partner, campaign strategy or internet star hosting videos that bring your brand to prominence, it’s Alibaba’s mission to make that easy for partners.

And who knows? The lessons learned and the success you experience in China, both offline and online, could reverberate all the way back to the UK high street.

It seems clear from the numbers, and the tens of thousands of international brands already online in China, that the opportunity is there.

If you are not one of them, what are you waiting for?