While it’s clear that buying behavior differs across China’s various consumer groups, it’s important to note that behavior also varies considerably from city to city. So, brands need to be aware of these differences, so they can tailor the products and services they offer accordingly.

Cities in China are divided into several tiers, based on their various socio-economic differences. There are four first-tier cities - Shanghai, Beijing, Shenzhen and Guangzhou, which have significant commercial and political resources, a well developed transport infrastructure, many active urban residents, more diversified lifestyles and a better GDP performance overall.

Then, there are new first-tier cities, like Chengdu, which also excel in those same areas, but ultimately sit behind China’s first-tier cities. The cost of living in both these tiers is high, but wages are generally better than those in lower tier cities, so people tend to be more open to purchasing expensive or premium goods. However, competition is fierce, with many different foreign products dominating the market.

Second-tier cities, like Xiamen, are smaller than those in the first two tiers - not just in terms of size, but also in terms of political and commercial resources, economic scale, and population. However, many second-tier cities are growing fast, and offer an alternative to brands seeking to avoid the competition found in first and new first-tier cities.

Finally, there are third tier and lower tier cities, which are typically found in more rural areas, and have relatively weaker economies - limited by smaller populations. The pace of life is slower and both the cost of living and wages tend to be lower - but there are still thriving industries and potential opportunities in these locations, with consumption in some of these cities even beginning to outpace many higher tier cities.

Businesses will need to consider these differences to determine which cities offer them the best opportunities for success, and to see if any changes need to be made to improve performance across certain tiers.

So, we’ve looked at who China’s online shoppers are, what it is they’re actually purchasing and how this buying behavior varies across different cities. Now, it’s time to take a look at the different online payment options available - after all, if shoppers can’t actually pay for your products, then you’ll have a pretty big problem on your hands.

Relying on payment systems such as credit cards or PayPal won’t get you very far with Chinese shoppers. If you want to get their money into your company’s bank account, then there are three viable payment options to consider.

First up is Alipay. Alipay is a payment app owned by Alibaba - China’s largest eCommerce company, which also owns some of the country's largest online marketplaces. Alipay is the leading payment app in China, with over 669 million monthly active users.

The popularity of Alipay is closely followed by another mobile payment app - WeChat Pay - which is incorporated into the WeChat app - one of the world's most popular social media messaging apps. WeChat Pay is similar to Alipay and acts as a digital wallet service. Together, they have a combined market share of over 90%.

Finally, there’s UnionPay, China’s primary debit card provider and state-owned financial service which has issued over 9 billion debit and credit cards across 68 countries and regions.

Now that you have a good understanding of China’s eCommerce landscape and the different payment options available, it’s time to look at the key players in this market. Where are businesses selling their products? That’s what we’ll come onto next…

City Tiers