What’s the world’s largest and fastest-growing e-commerce market? It’s China, with over 800 million
Internet users, and accounting for over 50 percent of global retail e-commerce sales (projected to be
nearly 60% by 2021). China’s mobile payment market is a whopping 11 times the size of the U.S. market.
The volume of online sales in China now exceeds that in the United States. E-commerce is predicted to
account for 40.8 percent of all retail sales in China by 2021.
Chinese e-commerce is very mobile: By the end of 2018, more than 75 percent of ecommerce sales in
China—over $1 trillion worth—were transacted via a mobile device. M-commerce accounted for 81.6
per-cent of Chinese e-commerce sales in 2017. Payment for both online and in-store sales via mobile
phone services such as WeChat is sweeping the country. According to iResearch Consulting Group, a
Chinese firm, mobile payments in China totaled $9 trillion in 2016, compared to $112 billion in mobile
payments that same year in the United States. China has also become the world’s largest mobilepayment
market.
Tencent’s WeChat, with over 900 million active users, is the dominant mobile platform in China.
Retailers and brands have found that capturing the consumer’s attention typically requires operating
within the WeChat environment on the WeChat plat-form, as opposed to building a direct-to-consumer
mobile app. Retailers such as Estee Lauder, Coach, and Gap run their loyalty programs within the
WeChat app, and conduct customer relationship management (CRM) on the WeChat platform itself.
Max Factor built a new social CRM system on the WeChat platform. It created a detailed customer
database with 36 categories of tags using online and offline data. Max Factor now use real-time data to
send personalized messages based on different stages of the customer life cycle via WeChat.
Credit cards never became widely used in China. Until recently, discretionary spending was not really
possible for many Chinese, and there has been a long-standing cultural aversion to debt. On top of that,
the government made it difficult for companies such as Visa Inc. and Mastercard Inc. to set up shop.
E-commerce has given China’s digital consumers access to products from overseas, and a notable share
of consumers appears to be taking advantage. Cross-border shoppers appear to prefer items that are
either too expensive or too scarce domestically.

1. What are the cultural, technical, and organizational obstacles for foreign firms that want to do
   online business with China? (Include a separate paragraph for each of these components
   (cultural, technical, and organization – with subheadings.)
2. Describe how the factors you noted in question 1 impede organizations from setting up ecommerce sites or
   conducting business in China? (Include a separate paragraph for each of
   these components – with subheadings.)
3. What steps could your company take to facilitate a successful e-commerce presence in China?
   Provide a full explanation.
4. Conduct research, and based on that research, describe e-commerce opportunities in China.
   Provide evidence for your assertions.
5. In general, what major factors are driving the internationalization of business?
6. How has/will current (e.g., COVID-19) and potential pandemics influence e-commerce growth
   globally. (Provide evidence to support your assertions.)