02/12/2011 06:23 GMT | Updated 31/01/2012 05:12 GMT

Is China an Attractive e-commerce Market?

It is a well known fact that the Chinese economy is growing at a fast rate despite the global downturn and the same is true for its e-commerce market.

According to a recent report by The Boston Consulting Group ("The World's Next Superpower - Navigating China's Unique Online-Shopping Ecosystem") the Chinese e-commerce market was worth some RMB 476 billion last year. This figure is expected to rise sharply as the number of online shoppers in the country is set to increase from 145 million now to some 329 million by 2015.

This is certainly an amazing outlook, especially when you compare it to the gloom and doom across Europe and the U.S.A. But should UK e-commerce businesses be diving in and trying to win the Chinese consumers?

Despite the very encouraging figures mentioned above the answer is not as straight forward as you may think. This is mainly due to some very specific differences between the Chinese and most other e-commerce markets.

Firstly any new online store entering China will need to face up to the e-commerce leader - (similar to Amazon), which holds a massive 79% of the market in terms of transaction value. Trying to compete with such a dominant player verges near on impossible.

Secondly the differences in which the Chinese use the internet (Google has almost no market share in this country) also makes it hard for UK businesses to gain consumers. Techniques which allow websites to rank well on Google may not work with Baidu (China's main search engine), even if a site is translated. Advertising on Baidu also works on different principles, so to gain any presence there would require a lot of research and experimentation or, for those who can afford it, outsourcing it to an expert.

The way Chinese people shop online also differs somewhat to the way we do in this country, meaning that again businesses would potentially need to invest a lot of time in adjusting to those variances.

All of this means that markets in countries such as Brazil or India could be seen as much more accessible to UK e-commerce businesses. The speed at which e-commerce is growing in those parts of the world may not be equal to, but is fairly close to what is happening in China, making them an excellent alternative for online retailers.

Certain brands will never give up on the Chinese market, but for some smaller ventures it will simply be too risky to try and gain a foothold there. - Merchant Services