As a UK business, tapping into the Chinese e-commerce market makes sense.
Set to be worth an eye-watering 32.7 trillion yuan before the end of 2019 (US$4.5 trillion; £3.6 trillion), China is an e-commerce powerhouse with brands like Alibaba breaking records every year. And with China expected to own half of the global e-commerce market by 2020, there’s never been a better time to start selling your products online in the country.
Unlike the US and UK, where e-commerce continues to grow but at a slower pace, Chinese consumers are shopping online more than ever before, as many live in small, third-tier cities. They use the internet to access different kinds of products they can’t find anywhere else.
What’s more, cross-border shopping is becoming a way of life for Chinese millennials and middle-class consumers, who place big value in purchasing from big-name luxury brands, paying top-dollar to secure them directly from the manufacturer rather than worrying about fakes and counterfeits from local markets where copyright regulations aren’t exercised.
Before you begin your Chinese e-commerce expansion, we’ve put together considerations you should make, from finding the right platform to marketing your brand on WeChat…
Sales channel and strategy
Perhaps one of the most important elements of an e-commerce strategy is to identify your sales channel as soon as possible and get to grips with its nuances. If you’re not versed in Mandarin, work with an agency that can stress the benefits of a particular channel and help you to identify the opportunities, which may differ significantly from your UK e-commerce sales channels such as eBay and Amazon, whether that be price, consumer habits, or fees.
The sooner you’ve decided how you’re going to find and close sales, the easier it’ll be to build a Chinese marketing strategy and begin your expansion. Some UK businesses may start by using Chinese e-commerce sales (more on those below), whilst others may choose to build their own e-commerce website, app, or WeChat Mini Program to push sales. Weigh up the pros and cons of them all and consider testing to find the most appropriate avenue.
Some businesses may identify multiple sales channel opportunities (such as retail, resellers, white-label, wholesale, agents, and outsourcing) and may even opt for an O2O (online to offline) sales strategy to promote their products online for sale in the physical world, or vice versa. Distribution channels should also be considered, weighing up the benefits of importing your products into China and having them sit in a warehouse until they’re sold VS. shipping each product from the UK, which could slow down delivery speeds but cut startup costs.
Choosing the right platforms
Choosing the right platforms for your Chinese e-commerce venture requires some research, competitor analysis and time - you cannot simply assume that your products and services will be a natural fit on every site under the sun. The Chinese e-commerce landscape is a little more complicated than listing products on eBay and Amazon and paying for advertising.
TMall, for example, has an international focus and is a great starting point for UK businesses as it offers overseas direct shipping, and supports AliPay under its Alibaba brand, whereas Yangmatou (洋码头) also focuses on selling foreign products to Chinese consumers at discounted rates, but requires that those foreign businesses ship their products to China before selling so they can offer express delivery to consumers, which can be expensive.
VIP.com is another platform to consider, offering flash sales of overseas products, whilst Sunning.com offers overseas direct shipping and bonded imports. Mia.com is a vertical cross-platform B2C platform, YHD.com is a vertical self-support and bonded import platform, and JD.com is the “Amazon of China” with a 25% B2C e-commerce market share offering self-operated advanced fulfilment and same-day delivery to consumers, which serves as a selling point for brands wanting to offer consumers speedy delivery and a great experience.
Unless you have first-hand experience buying from these e-commerce brands in China, we recommend liaising with your Chinese partner or marketing agency and conducting in-depth competitor research - both on Chinese and international competitors - see where they list their products. The truth is, with so many e-commerce platforms to choose from, you may not get it right first time, so be patient and remember: buyers won’t find your products on e-commerce platforms unless they’re well-optimised and marketed to your target audience.
Something else to consider when selling your products on e-commerce websites in China is your product positioning. Indeed, many UK brands assume that they’ll be able to replicate the success of their products overseas without giving their product positioning much thought, but the truth is that Chinese consumers are culturally very different to Western consumers.
Work with a local marketing or branding agency to identify the key benefits of your product to your Chinese target audience, conducting market research and holding focus groups to find unique selling points that may have been overlooked in your home market. Though this can take time and be expensive, properly positioning your product allows you to streamline your marketing efforts and craft effective marketing messages that can drive more leads and sales - and it can help you to differentiate your products from local and international rivals.
Finally, remember that you may be able to position your brand and product differently for particular segments of the Chinese market - so don’t write off potential markets or simplify your brand. You may identify your core target audience and also a secondary audience, for example, and conduct separate marketing campaigns for each strand. Tailor your marketing messages to focus on the benefits each audience values most - that could mean you have to develop more than one company website or build separate WeChat Mini Programs to drive sales. If budgets are tight, start with your core target market before branching off into niches.
Marketing and promotion
Finally, don’t underestimate the importance of building a strong reputation for your business in China - and don’t assume that the usual marketing and promotional activities will work as effectively in your new market. Consumers are anxious not to lose face in China and value word of mouth over anything else, so every single customer must receive a five-star service.
Key opinion leaders, also known as Big Vs, are extremely powerful and can be used in most Chinese marketing campaigns, helping to influence purchasing decisions. The key here is to be authentic and only work with influencers who genuinely care about your product, or their followers will see through your promotion and abandon your brand. When executed correctly, KOL marketing works well - 70% of Chinese millennials purchase products directly from social networking sites like WeChat, compared to the global average, which is 44%.
Chinese social networking sites like microblogging network Weibo (the Chinese Twitter) and TikTok (known locally as Douyin) have more than a billion users between them, and WeChat has a billion on its own, nicknamed as the country’s “app for everything,” offering banking, mobile payments, food delivery, e-commerce stores, and much more. Experiment with all of the key platforms as see which is best for your brand - it might not be immediately obvious.
If you’re ready to make the jump and sell your products and services in China, Zudu is on hand to help. Contact our friendly team on WeChat or give us a call on +44 (0)1382 690 080.