Online shopping in China is set to exceed $1tr 2018, but a survey conducted by Frost & Sullivan and Azoya Consulting has found that retailers are unhappy about sales.

While China has over 500 million online shoppers, only 20% of retailers feel confident in their capability to succeed in the Chinese e-commerce market, according to the survey.

Frost & Sullivan and Azoya teamed up to survey 1,000 Chinese online shoppers in order to understand their purchasing behaviour. The firms also surveyed 100 international retailers with annual sales of $50m to find out about their strategies and challenges regarding China.

Frost & Sullivan consulting director for Asia-Pacific Mark Dougan said: “This is the first global report to review the Chinese cross-border e-commerce market from both consumer and retailer perspectives.”

The survey found that 72% of Chinese online shoppers prefer shopping on Japanese websites, which they believe offer better quality products and lower risk of counterfeits. South Korea is the next preferred location for 62% of surveyed consumers. US e-commerce landed in third place with 55%, with only 19% of US retailers feel confident about succeeding in the Chinese online market. UK retailers came last with only 23% of Chinese shoppers expressing a preference for shopping on UK websites.

According to the study, online retailers of all nationalities would like to see their results in China improve. Currently, only 37% of surveyed retailers feel satisfied with their online sales in the country.

The study found that retailers with standalone online shops are more satisfied (31%) than those who sell through marketplaces like JD.com (21%). This suggests that investing in standalone online shops could be the best long-term strategy in terms of branding, as word of mouth offers the most influence on consumer behaviour in China.  Out of the consumers surveyed, 50% said that they buy from online shops that were recommended to them by friends and family, followed by 32% being influenced by social media.

Azoya International co-founder Don Zhao said: “To build a brand that Chinese consumers trust, which commands a healthy profit margin and repeat buyers, retailers need to approach customers through multiple touchpoints. The key channel should be within retailers’ control, accompanied by supplementary platforms.”

Fashion is one of the most important categories for Chinese online shoppers. Around 22% of surveyed consumers said that clothing and accessories are the products they buy the most online, while 20% spend their money online on beauty-related products and cosmetics. The third most popular category is mother and baby products (15%). According to the survey, women spend $976 a year, which is 20% more than men.

The study claims that men and woman in China value different things when online shopping. Men value fast delivery the most, while women care about the availability and customer support. It found that women are more likely to shop from the non-Chinese standalone website (21%), while only 18% of men are drawn toward international standalone online shops.