THE BLOG
24/02/2015 06:37 GMT | Updated 20/04/2015 06:59 BST

China's £310Billion Consumer Market: Are UK Retailers Missing Out on the Year of the Goat?

Chinese New Year is a holiday that some say is bigger than Christmas in the West. It's the Year of the Goat, which in Chinese is tai yang and also means sun, representing prosperity. During this 15-day festival that kicks off on 19 February, the goat, sheep and ram will be celebrated throughout China, and millions of Chinese consumers will go shopping with money gifted to them in traditional red envelopes.

While Chinese New Year seems like a lucrative opportunity for UK retailers selling overseas, few have taken cues from this zodiac milestone. Perhaps they should. China has already surpassed the US as the world's largest online shopping market. By 2018 China will exceed £650 billion in sales--more than eight times the estimated value of the UK market

For more proof of China's growth prospects, look at Single's Day, the country's largest shopping holiday of the year, which falls on November 11 (11/11). In one day, online retail giant Alibaba sold £6 billion worth of goods.

To put that in perspective, British shoppers spent a mere £810 million online on Black Friday--which is still the biggest day ever for online sales in the UK. In the US, Black Friday and Cyber Monday sales combined reached £2.2 billion.

With over 1 billion people--more than half who are online--China clearly represents an enormous opportunity for UK retailers that sell outside of Britain. Cross-border ecommerce sales in China are poised to reach £310 billion this year, according to eMarketer.

Yet, a look at the top 20 UK retailers, excluding supermarkets and pharmacies, shows that only 40% ship to China, compared to 75% of the top 20 US retailers. Even the most iconic High Street names like Harrods, Debenhams and House of Fraser either turn away online customers from China or don't display prices in Chinese Renminbi. What's more, shoppers are responsible for calculating duties and taxes--leaving them with what is likely a hefty and unexpected fee to pay upon delivery.

In America, retailers have been feeding China's appetite for US goods for some time, and are gearing up for the 2015 Chinese New Year. Neiman Marcus and Bloomingdales--both stores ship to China--are selling New Year sheep and goat-themed products, like the Diane von Furstenberg Lucky Sheep Chinese New Year clutch.

Top US retailers are targeting Chinese shoppers online during the New Year period. Popular items for sale are red and gold apparel and accessories, colours that invoke good fortune and joy, as well as year-round favourites like handbags and shoes from top US designers Michael Kors and Marc Jacobs.

Chinese consumers pay attention to Western holidays too. During the US Black Friday period, Macy's, Bloomingdale's, Saks Fifth Avenue, Neiman Marcus, Aéropostale, and Ann Taylor sought out online shoppers in China through a partnership with Alipay ePass, a solution integrating China's largest and most preferred payment method Alipay, and international shipping. Shoppers in China, who anticipated Black Friday discounts, were able to use Alipay to make online purchases, instilling their confidence in foreign retailers and brands.

With the rise of global online shopping, consumers around the world are starting to expect that UK retailers will open their websites to them. They're gravitating to retailers that are early adopters and who offer a hassle-free experience. This can only happen when the technology that powers their ecommerce allows for a localized experience and gives shoppers the ability to view products in their local currency as well as check out with their preferred payment method.

To be fair, only about 25% of digital buyers in China purchase cross border online today, vs. 66% in the UK. Average order values are not that high, either. But this will change as more Chinese go online and the nation gets wealthier. The average disposable income for urban citizens is up 10% this year to £2,105 and is growing even faster in rural areas.

Successful entry into China is undeniably complex, but by forging strong partnerships, UK retailers can pave the way for online shopping growth.

In a few years time, perhaps the UK will come around to catering to the rising giant that is China. And instead of Black Friday, China's shoppers will be on the hunt for great deals on Boxing Day.