Five Steps Towards Online Selling In China

Anyone thinking about Singles' Day on November 11th? If you are a brand maybe you should be. While its too late to participate this year its perfect timing to observe how your category performs in 2019 the strategies tactics and promotions employed by your competitors with a view to incorporate that intelligence into your plan to participate in 2024.

What started out as an anti-Valentine's day for the growing number of bachelors in China has turned into an online shopping frenzy that's bigger than Black Friday. Alibaba set a new record last year claiming more than $30.8 billion in sales in 24 hours a 27% hike over 2017.

The numbers give a tantalizing insight into the scale of the Far East opportunity but digging deeper into the complex ecosystem of online shopping in China reveals how prepared brands need to be if they want to be successful. The good news is that rules are changing to actively encourage cross-border e-commerce; the bad news is that it's still complicated.

On the positive side you can forget old preconceptions about counterfeit products and backhanders Alibaba and its Tmall offshoot run ecommerce ecosystems that are very protective of IP because there is simply too much money to be made from luxury brands to risk damaging them. Alibaba even has a dedicated system Aliprotect to handle complaints.

As a country China runs a sophisticated and highly regulated online industry that will test even the most tech-savvy sellers. The reality is that any brand or retailer looking to enter China will have to plan a long way in advance before attempting a Singles' Days play.

Here are five steps to take to get ready:

1. Know your market

For mega luxury brands like Gucci it makes sense to have your own China-facing website. But without name recognition you need to be very clear about your brand's relevance to a Chinese audience because it will determine your go-to-market eCom strategy and the platforms you target. Tmall for example is curated for US and European brands to open up storefronts and might be a good place to start.

2. Find a local partner

It's not obligatory but it is advisable. Agent distributor or reseller they will give you on-the-ground expertise you'll need to navigate 'guanxi' the relationships and networks that make business in China happen. You will also need a license to trade as a WFOE (Wholly Foreign Owned Entity).

3. Create engaging content

A local partner and platform account managers will give a steer on best-bet customers but you should have made your own business case on why China is a viable market for your brand. The good news is that a Tmall storefront has all the autonomy of your own B2C website so you get to put your stamp on differentiating through messaging and content. Just be very clear on how your products align with Chinese consumers.

4. Control the customer experience

Even more than Amazon customer feedback and brand integrity will make or break a product upon the main pure-players in China. They monitor activity at a granular level so negative reviews can have a near immediate impact on your business. Sales delivery refunds returns and gift credits have to be executed with seamless precision leaving no cause for complaints. Thus ensuring a local presence for fulfilment is key to avoid customs delays.

5. Make sure you have enough stock

It sounds obvious but the size and scale of the market can take retailers by surprise and it's not uncommon to run into logistics problems if you have a popular product on your hands. The big platforms will even ask about your manufacturing capacity before they let you in. So if your marketing strategy successfully delivers customers you better have the inventory and supply chain in place to fulfill the orders.

If you find a window of opportunity in China you have to prise it further open. The big platforms provide starter packs implementation and education teams; they even have brand incubator units that will evaluate your best market strategy. But success will ultimately come down to the differentiation that that you define for yourself the brand-book and user-acquisition strategies that have found traction in EMEA will not guarantee success in China without understanding your core demographic (these customers will be the ones who help you get noticed) and your 'new' competitors. This is where ChannelSight can help extracting actionable insights from data to analyse and optimize your marketing spend ensuring you make the most of the China opportunity and maybe next year's Singles' Day.

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