An Intelligent Approach is Required for Brands to Successfully Export to China;

Keep Your Finger On The Pulse..

Based on our experience from running a host of large scale e-commerce launches I wanted to put together a guide for market entry to China if businesses choose e-commerce. The following thoughts are based on my insights and opinions from managing a host of e-commerce campaigns.

There will certainly be others with a different opinion to me but from my perspective as a consultant I seek to inform and work closely with serious brands to develop a strategy based on ROI, this is key and sometimes you need to think outside of just the fashionable approaches to marketing in China to drive results..

Export to China…. Where should you start ?

The priority for me as a consultant is to validate a marketing strategy, to prove and ascertain what will work by allocating enough budget to a number of areas and platforms in order to have enough data.

Then once brands know their stronger areas they can increase investment accordingly.

Let’s talk about E-Commerce strategy and some of the key area’s to focus on.

 

E-Commerce in China is strategic

E-commerce in China is booming with online retail now representing 20% of total retail sales in the whole of China.

China’s ecommerce market remains the largest and most lucrative in the world, with over 850 million Chinese now connected online and 350 million middle class consumers actively engaging in e-retail purchases, there is no denying the potential for international brands as China transitions to a service led, tertiary economy. With year on year growth at approximately 25% it is expected that the online e-retail infrastructure in modern China will play a vital role in this market economy transition.

Digital in China is the key, E-Commerce is shifting the Chinese pallet increasingly towards further online sales. China’s internet penetration rate is now at a whopping 65% and growing.

 

 

A 26% Growth Rate in the E-Commerce Sector

Lets take a look at some more figures; the National Bureau of statistics reported that the Chinese e-commerce market growth rate increased by 26.2% in 2016 and generated ¥5.16 trillion in 2016. The fastest growth rate in online shopping adoption is now occurring in the smaller, third tier cities as the marketplace widens and levels of wealth continue to grow as GDP increases by 7.5% year on year.

The market in the larger cosmopolitan centres continues to remain strong as it matures but the real opportunity for growth is now in satellite and smaller urban areas outside of the giant cosmopolitan centres on the east coast.

ECommerce Export to China

Delivery Infrastructure Across China Fuels E-Commerce Sales

Alibaba are E-Commerce Giants in China and have invested over $450 million in developing one of the largest and most comprehensive delivery infrastructures on the globe, no longer limited by location rural area’s have on average witnessed a 15% hike in e-retail purchasing.

 

E-Commerce; For Testing the Waters

You should not consider investing huge sums into your distribution network, for physical stores or even into inflated advertising budgets until you have a targeted strategy. E-Commerce investment with the right agency allows you to test different channels and analyse the results.

Why is E-Commerce so effective when it comes to validating your concept?

– You can set up and engage in A/B testing on multiple channels
– A far more realistic investment is required to obtain sales + enough data to analyse and tailor a strategy going forward
– Distributors and large retails are infamously wary of news brands without a strong brand presence in China, online branding allows you to build this in the most cost effective way.

Intelligent Marketing = Visibility + Reputation = Online Sales Success

The next obvious point is that online marketing is an integral part of any e-commerce process. There is no ‘magic bullet’ in China. Regardless of what a sales person will tell you, you cannot simply invest X into KOLs and Y into WeChat Ads to guarantee sales.

 

IN CHINA, A HOLISTIC APPROACH IS REQUIRED;

You need to test different channels with a large enough budget to ascertain which is successful for your brand & product.

You need to work on your branding, pay simply for high level exposure is not enough.

You need to have achieved sales figures before approaching quality distributors, the best way to get these ‘notches on the board’ in the most cost effective way is e-retail.

Once you focus on branding, sales and reputation you can then approach high level distributors to roll out your product range in targeted locations in Mainland China.

20 Tips to Enter the Chinese Market

Branding in China is the Key, But How To Really Do It.

Branding is everything in China, particularly the reputation of being an international brand which carries a lot of weight, remember the domestic Chinese market is often associated with counterfeits & fakes.

International has become a byword for quality.

What are the best platforms for Branding in E-Commerce

-WEIBO
-WECHAT
-WEBSITE
-PR + MEDIA EXPOSURE
-KOLS (Influencers)

Plus a presence on the following E-Commerce Channels is highly reputable;

– Tmall
– Taobao
– Taobao Global
– WeChat Stores

Lets delve into the best strategy for each platform and explore the limitations also.

Remember ROI (Return On Investment) is always the priority, you invest for long term returns, hence a more holistic and comprehensive approach.

 

Weibo is the Most Targeted Platform for Ads

Weibo now boasts over 500 million users, with over 220 million active daily users. Weibo at one point was written off, why? Because WeChat really exploded with much more hype (certainly on the international stage) than its counterpart. WeChat now boasts over 877 million followers but.. WECHAT HAS FAILED TO MONETIZE & DEVELOP EFFECTIVE TARGETED ADS.

Weibo is back in the game with vengeance, Alibaba now own a 33 % stake in the platform, a fascinating development from an e-commerce perspective, it means Weibo will receive a lot more investment and further support e-commerce platforms hosted by China’s number one giant.

Remember then that external links from Weibo should be purely to Alibaba sources, not a problem with the most reputable cross border platforms (Taobao, Tmall etc) all being under this umbrella.

Weibo is also a branding dream, it is an open network & offers.

– Official account creation
– No CBL required
– Highly customisable skins for brands
– Users can see posts from anyone (open network).

In addition to this Weibo offers services in;

Fan Tunnel Posts:

These are paid posts from your account on the feeds of targeted users, this is one of the most targeted ad strategies to adopt.

You can specify qualified users via;

– Other accounts they follow (e.g. competitors)
– KOLs/Influencers they follow
– Demographic + Listed Interests

Even content backed by KOLs (Key Opinion Leaders) can be fanned out via fan tunnel ads/posts to dramatically increase exposure

 

 

Here you can see an example of a fan tunnel post appearing at the top of a users news feed. Please note the the account is verified, this is necessary before launching any ad campaign on Weibo.

 

 

 

DSP (Display Ads)

Again Weibo developed a far more advanced system for targeted ad display, you can select those accounts who have already built up a targeted following and market to them, an audience you can guarantee are interested in your product sector.

 

(Right) A sample DSP banner ad to right of the user’s news feed.

 

Chinese Care Greatly About Search Engine Results

On Weibo you can pay to be listed as a search result based on Keyword Searches, powerful if your name is ranked amongst other well-known brands. Weibo offers a search facility and allows for Keyword Optimisation.

 

 

WeChat; a Branding Tool but Requires Investment

On WeChat you have to invest for followers, WeChat is a closed network, therefore you have to be connected first for content to be pushed for followers. A WeChat account is thus completely invisible without followers..

It doesn’t matter how much money you throw at developing a glossy and high-level mini-site. YOU NEED FOLLOWERS FOR CONTENT TO BE SEEN.

How to Attract Followers?

– You can drive followers from other more open network sources (such as a Baidu visible Website, Forums + QQ).
– QR Code Placement Offline + Online can link directly to your official account.
– Group Posting (Quality Content into Targeted Groups).
– Followers re-posting content on their feeds.

The above strategies take time and work. The magic number for WeChat followers in my experience is 20 000. At this number you have an animated, engaged and active community. It can take off more in terms of re-posting and content reach.

The main benefit of WeChat for E-Commerce is its role in driving traffic to a WeChat store.

 

 

WeChat Stores

WeChat stores are in-built into the fabric of the WeChat system, they are however a PASSIVE store format. WeChat stores cannot be found via a search function on WeChat, you therefore have to be active in driving traffic.

WeChat stores host up to 20 SKUs and are also highly customizable. They are a nifty tool as connected with WeChat payment methods, a very trusted payment infrastructure in China.

WeChat stores can be accessed via QR codes + internal WeChat links.

Flash sales are a great idea on WeChat Stores, Why?

WeChat wallet allows for such ease of payment, users can literally pay at the swipe of the screen so impulse purchases/discount sales tend to thrive on WeChat stores.

For more information on selling via WeChat please see here;

Definitive Guide to Selling on WeChat for International Brands

 

Website in Chinese + Visitors = a good Start

Websites are typically a must, the Chinese place great emphasis on the importance of a site primarily because of the importance of Baidu. 75% of all online research is via Baidu.

Does your brand have a strong Chinese Website? If its a priority in domestic markets in should be in China too.

A well-designed site is optimized for Baidu searches in Mandarin Chinese.

This includes;

– A site audit prior to going live
– Meta tags, descriptions & keywords in-line with search term selection
– Text linking with most effective keywords in Chinese

In China PPC is more effective in terms of driving traffic (forget banner ads on Baidu, in this area they are under-developed).

You can also of course consider SEO but it will take 4 months to rank on competitive keywords. The most qualified traffic is generally driven through a high ranking in the natural search results.

 

A Luxury Chinese Site Developed For Damac; Static Web Versions are Typically More Effective. 

 

 

PR & Media Exposure

If you are a new brand to the market you need to be newsworthy, a media presence boosts your visibility across all platforms.

The top news sites in China that regularly accept contributions include;

Sohu.com
– News 168
– Pingshanba
– Ifeng

PR plays an important role in any comprehensive campaign.

Consider image choice, text re-adaption and how you can tap into trending news topics, national holidays, cultural quirks and popular keyword terminology through your articles.

In China everyone essentially ‘pays for publication’ although having a database of Media sources streamlines the process.

 

KOLs & Influencers – Not a Magic Bullet but Effective

There has been much hype about the role of KOLs, in terms of interested clients searching for KOL campaigns the numbers have dramatically increased but do they really offer ROI? Is the hype legitimate?

The answer is Yes/No. KOLs for large spending, established brands are known to drive sales. It’s a chicken/egg situation, the brands that sell best via KOLs are already established.

For newer brands the cost of using a large scale KOL with 300 000 + followers will be high, and in my opinion that budget can be better spent on targeted advertising.

It all depends upon which sector you are in, in some sectors 30 000 + KOLs is sufficient and more can be recruited to form an echo chamber effect.

Consider that the large budgets for single posts guarantee a high level of exposure, they do not guarantee sales.

 

One of the most popular KOLs in China, Papi, her Weibo account boasts over 450 000 followers, exposure on this level through her posts as you can imagine does not come cheap.. 

 

Direct, Multiple Channel Marketing

Sales in this writers opinion comes from a comprehensive, holistic approach, use KOLS in your strategy but don’t rely solely on one expensive method for visibility. You also need to develop reputation for the brand itself as a long-term strategy, if you continually rely on KOL exposure any brand will be bankrupt within 6 months.

You want to export to China and need a Guide ?

  1. If you have a serious project lets talk, serious players entering the Chinese market must realize this is a complex eco-system with a host of different platforms.
  2. The most important element of a campaign is to validate which platforms work best for you, how and why. Quality metrics & analysis is the key to developing this at an early stage. 
  3. We are small and select team of consultants with a combined 5 years of marketing experience in China.