A market of 566 billion euro of online B2C sales and 320 million web shopper: this is eCommerce world in China.
The chinese market has become more and more attractive for both the business and the small and medium-sized Italian companies. Suffice it to say that one of the major chinese online platforms has about 500 million subscribers, 60 million visits per day, 48,000 products sold every minute, and 1.47 million online stores.
Not only. We must consider that in China there are 735 million internet users. These are impressive numbers that make Italian small and medium-sized businesses even bigger. It was 2012 when Asia Cloud Computing Association set China’s 10th place among Asia Pacific nations for Cloud development opportunities. Today the situation has drastically changed. They are the same cloud providers that, having understood the endless opportunities of a potentially growing potato buyer, are strengthening their presence on the territory with their bids.
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- Legal framework. The legal issue for entrepreneurs who want to open an eCommerce in China is quite complex from thepoint of view of regulation and, above all, of local legislative uncertainty. If the site is located in China, the foreign company will have to set up a chinese company under chinese law whose social object must include online sales. All Internet sites established in China must have the Internet Content Provider (ICP) license, issued by the Ministry of Industry and Information Technology. In case of direct sales via non-chinese sites or
platforms, it’s mandatory to accept payment by credit cards issued by the Chinese banking or Alipay banking and provide after-sales service. The ICP license is not required.
- The license. A first step to start an eCommerce business in China requires a business license.
Amazon web services, for example, offer the opportunity to register on Aws’s specific portal for chinese region. AWS partnership programs have been designed to support APN member business models by providing them with greater visibility and support from teams for AWS partners.
IBM presented SmartCloud Enterprise+, a service in collaboration with 21Vianet (a local neutral-carrier), the same provider that secures a Microsoft partnership dedicated to deploying Windows Azure and Office 365. Google Cloud doen’t have a business plan for people who want to make business in China. But it’s difficult to compete with Aws. As an alternative to the most famous Western providers, you may also consider National Cloud: Alibaba Cloud.
- Payment systems. In China there are three ePayment’s categories service providers: credit card issuers, banks and third party companies, commonly called third parties, which are favorites by chinese consumers and dominate mobile payment. The Thurd Party offers alternative payment tools, the most important is Alipay of Alibaba group, followed by TenPay from Tencent Group.
- Copyright. As far as intellectual property is concerned, it’s always reccomended to register your trademark according to the origin country law.
- GreatFirewall. Chinese GreatFirewall blocks all encrypted traffic, so it’s impossible to do access to the chinese network using https protocols from abroad. It could work a few days and then be banned.
- The domain. Registering a .cn domain outside China is not a convenient thing and it does not even use redirect logic to identify its source. The reason is the occurrence of cases in which DNS records are changed in China by causing DDoS “using” about 735 million Internet users and redirecting them to sites that can not support them.
- Virtual Private Cloud. You can’t connect Virtual Private Cloud directly to the chinese region with Virtual Private Clouds in other regions, such as Europe. To do this operation you have to go through a provider that interconnects VPCs and thus SSH accesses to systems in China. The eCommerce will have to be run through two providers that are sinnet or aryaka. So, imports, exports of products, orders, or otherwise, must occur through these connections.
- Asynchronous solutions. It is not convenient building database architectures in synchronization, because lags and latencies are high with such a Great Firewall, as well as probably fiber bottelnecks inbound and outbound from the Chinese network.
- Time zone. In case of infrastructures implemented in chinese region you should consider the time zone by moving the clock hands forward or backward depending on the country of the company that intends to expand its business.
- Logistics. Logistics is a key aspect for those who want to approach to the chinese market. The cost could be very high given the breadth of the territory. There are logistics companies specializing in chinese transportation of certain products.
It’s essential for companies to be aware of ecommerce development rules in China and in particular be aware of tools to fully exploit the market. For some years now, our customers who decided to expand their business to China rely on Amazon Web Services Cloud that offers a consolidated service for years of experience.