Online retailers must find innovative ways to reach more customers, stay ahead of competition

While China will be the world's largest e-commerce market in just a few years, many companies have been slow to respond, leaving significant growth opportunities on the table and allowing other merchants - such as those that sell on Taobao - to shape consumer perceptions of brands.

Companies that do not have an active e-commerce strategy are allowing a fast-growing channel to develop without exerting any control or influence over the process.

There is no one-size-fits-all approach to e-commerce in China, as the right strategy varies significantly by category and target consumer.

As is often the case, global companies cannot simply apply a standard developed market "blueprint" approach to China's e-commerce ecosystem and expect success.

As a starting point, many of the key online players found in many markets around the world have marginal or no presence in China, like Facebook, Amazon, Twitter and Google. But the differences extend much deeper than simply the names of leading players, so companies must ensure that their China e-commerce strategy takes these key differences into account.

1. Internet reach far exceeds that of top retail chains

Even as far back as 2010, 51 percent of China's population used the Internet, while the top 20 retail chains accounted for only 13 percent of urban retail sales. So while in the US around a third of the population visits a Walmart on a weekly basis, in China Walmart can be one of the leading hypermarkets with presence in less than 10 percent of China's more than 2,000 cities.

Companies must therefore consider how they can use e-commerce to reach consumers before waiting for quality retail shops to be built in all of the numerous cities where China's consuming class is now found.

Consumers have already shown that they will not wait for brands and retailers to come to their city before shopping online. In skincare, for example, 25 to 30 percent of what consumers buy online are products that are not available in stores in their city, or in China at all.

2. Concentration of e-commerce sales in Taobao and Tmall

In 2011, Taobao and Tmall, the C2C and B2C sites owned by Alibaba in China together accounted for more than 70 percent of the total e-commerce transactions. By comparison, Amazon accounted for less than 20 percent of the transactions in the US.

Companies looking to drive e-commerce sales through their own sites must ensure they are adequately differentiated from Taobao and Tmall. Such differentiation can come from focusing on specific categories and offering a tailored online shopping experience, or providing more assurances of product quality and high quality delivery.

3. Different online shopping processes

Consumers' online shopping processes can be quite different in China. Partially driven by the early dominance of Taobao, a search engine is less frequently a starting point - direct links to Taobao product pages cannot be found in a Baidu search, for example.

Alternate approaches are sometimes required to drive traffic. Vancl, an online-only top 10 casual apparel brand, uses Sina Weibo (a micro-blogging service) in multiple ways to generate awareness and traffic. Aside from simply having their own official company account send messages to followers, they also use innovative campaigns whereby individuals can become "Vancl stars" and share photos of their purchases.

4. High expectations for delivery service

Chinese consumers have grown accustomed to fast and inexpensive delivery. Given the immaturity of the infrastructure, package delivery concerns, not surprisingly, make up three of the top six reasons consumers may feel hesitant to purchase products online. And they are not just concerned about cost or the risk of damage during delivery.

An incredible 45 percent say they worry their purchases will be swapped for fakes in transit. For all these reasons, consumers tend to opt for e-commerce vendors that have distribution centers in their city. Even when e-commerce companies need to rely on third parties for last-mile distribution, steps can be taken to make the couriers seem more professional to consumers.

The author is a principal at the Beijing office of The Boston Consulting Group.