GUIDE FOR E-COMMERCE IN CHINA

E-Commerce is a big market in China and the majority of people living in cities buy online as it is so convenient and you are usually guaranteed to have the best deal. Brands will often put a lot of money behind marketing and selling their products on chinese platforms such as Tmall & JD. Brands will usually see an increase of 20% in sales per year by doing this, making it a positive thing for both the customer and the business.

However, what is important to understand is that E-Commerce is not an Eldorado for every company. Does that shock you?

Yes I know, agencies will not advertise their failures and companies will never say publicly that they have failed in e-commerce in China, but it does happen.  

So why do these companies fail? What are the main problems they are facing?

THE 5 BIGGEST PROBLEMS OF CHINESE E-COMMERCE

FIERCE COMPETITION. (MORE THAN YOU MAY THINK)

In China, competitors can be quite aggressive. Aggressive on Price and on Advertising. They can copy your best practices super fast. Companies will do everything to beat others and attract customers. This can include writing fake negative comments about your product or company and positive ones about their own.

China is saturated with start-ups and already established companies fighting to survive and everybody wants to get rich no matter the cost.

 

On Tmall/Taobao, you can be sure to find all your competitors, and all of them will fight in a direct and open way. Your customers can freely compare your products to your competition, so you have to find ways to be better, unique or cheaper.

SOLUTION

Really understand your competitors and what it is that will make your company unique. Chinese companies tend to be bad at branding, and usually never invest in their brand or the brand they represent, thus Western brands have the opportunity to attract a higher level of customers through the way they market themselves.

PLATFORMS ARE NOT FOR SMALL PLAYERS

If you are a big brand, it is quite easy to be welcomed onto Tmall or JD. However, smaller brands and start-ups will often be rejected by these two platforms.

Personally, I do not know how many Brands applied to Tmall Global last year, but an internal source explained that only 90 were accepted. When you think about how many start-ups and existing companies there are in China, this figure is nothing. And why do so many get rejected? Most of these platforms require companies to have a turnover of millions and to also have physical stores.

Why ?

Big turnover reassures platforms like Tmall and JD that they have the budget to spend on advertising on their sites. Do not forget that Alibaba is a great machine maker, they never can lose money, they take the money from the seller and from the buyers… so it is almost impossible to not make money.

 

And Physical store?

They want to be sure that consumers see the products in store and then buy it on their platforms. It works like this in China. People will generally compare the price of something they find in store to the online price and if it is cheaper online (which is usually the case), then the platform wins another customer. In other words, they want to steal the purchase from the physical store and have the transaction made on their website.

They also want the brands to invest in their marketing, to generate visitors to their platform and consequently make purchases.

So to summarize, these platforms want investment in ads and the products to be sold via band marketing campaign and offline stores. You may well ask « then what is the use of these kind of platforms for my company? ». The answer is that they are market leaders, and very well established platforms. Chinese consumers trust them and buy a lot on their platforms.

SOLUTION

If you are a small player, you are likely to get refused with the advice of developing your offline stores and investing in your brand before you try and apply again.
First invest in your Brand, eReputation and online marketing that can be visible. Develop your distribution and when your brand has an established reputation, then you are much more likely to be accepted onto Tmall and JD.

ROI (RETURN ON INVESTMENT)

It is a super taboo topic, how many Brands really make money via e-commerce. According to people working with Tmall stores, 20% make money , 20% do not make money but do not lose money and 60% are losing money.

How it is possible to have 60% of companies losing money on Tmall ?

1- Your margins are compressed by discounts.

2- You need to spend a lot of money, always …

When you enter you need to give Tmall fees, build your store.

You always need to build new pages, new design, you have to spend money on advertising or other ways to get traffic, and participate to the fees of Tmall.

 

As I mentioned, usually it is not enough and you have to spend money on your eBranding to get trust and awareness from chinese consumers.

Usually 3 people are implicated in Tmall management. A designer, a web traffic specialist, and a manager.

All these are costs you are liable for and you may need to sell a lot in order to cover these costs.

SOLUTION

Conduct market research before and be sure to understand how much you need to sell to be profitable and if it is possible.

Usually it is only when you have suitable products, the right way of marketing on these platforms and investment to attract web traffic and potential consumers that you will be successful.

DISCOUNTS ARE THE “CANCER” OF CHINESE E-COMMERCE

Chinese consumers love discounts and will always look for this when making a purchase.

Online, they have a lot of choices and it is almost impossible to be the cheapest. You have to have exclusive offers and competitive discounts to push them to buy. Taobao promise millions of Chinese buyers that they can always find the cheapest price on Taobao, and now the reflex is always to search and compare until they find the cheapest product.

 

The truth is most of Tmall buyers come from Taobao search engine. It is less true on JD, who, four years ago, tried to attract consumers by advertising great quality, but recently they have made more of a push to advertise on low pricing too.

 

Chinese people love to buy good deals even if they are rich they may often feel ashamed to pay a higher price for a product than their neighbors as it can hurt their smart ego.

Chinese People have very good sense of business. But for a company discounts can

  • Destroy the brand
  • Kill your distribution
  • Incentivize consumers to wait for discounts
  • And of course, decrease your margin

 

In other way, if you do not offer discounts on your products, it is very difficult to be successful on Chinese E-Commerce.

SOLUTION

Try to sell many items with discounts except the single items, so consumers will find it more difficult to compare. Only offer discounts on special events, for example, singles day (11/11), but be aware buyers may be less likely to buy from you the rest of the year round.

THE RIGHT EXECUTION

JD and Tmall require businesses to be active. You need to constantly work to optimize your Tmall store, continuous optimization of your Design, manage your ads, optimize your traffic, find new sources of good quality traffic, etc. From time to time it may be necessary to participate in special online events (for example, 11/11), in order to boost your sales and measure which pages and products are profitable.

Usually Chinese people like to ask questions via the online chat, therefore, you will need to have well trained customer service representatives and sellers that reply to questions swiftly and encourage the consumer to make the purchase.

So yes, your level of activity really matters when marketing to China and the most successful Tmall stores are incredibly active. But of course, there are some still facing huge problems.

Usually in China, Companies outsource their Tmall & JD management to E-Commerce agencies, because in house it is almost impossible to successfully build a professional team.

Some brands used to let their distributors manage their Tmall & JD accounts, but it has proved in the past to be a bad idea because the distributors sometimes sell fake products because of the price war or to optimize their margin.

Alibaba and JD were attacked by the chinese government about fake products sold online and react to sensitive brands and killed these distributors by certified partners.

Working of selling products on platforms is not only a sales process, most of the time it is a marketing process and to increase the visibility of the Brand on the web, to increase the reputation and to create a special attraction for a specific target. Brands have to work on social Media, be present on media, communicate via the right influencers, work on search engines or the channel that use the target, and create nice photos and videos about the brand.

SOLUTION

Select the Right Agency, that will work on your Emarketing and your Tmall & JD management.
We offer this service to reply to the number of businessmen and women that have the same problems.

HOW TO DEVELOP YOUR E-REPUTATION IN CHINA?

IN A CONNECTED COUNTRY YOU NEED DIGITAL MARKETING SOLUTIONS

SEO ON BAIDU TO GAIN IN VISIBILITY

75% of the researchs in China are on Baidu. You need to have a good ranking on Baidu to be visible. Chinese consumers will only buy brands wich have a good ranking on Baidu.

To develop your visibility on Baidu, you can use different marketing solutions as Pay Per Click (PPC) or Search Engine Marketing (SEM).

You can also do SEO. It’s extremely efficient but ask more work. It require uou to create good content,sharable, using keywords in order to increase your presence on the web for search engines.

SOCIAL MEDIA TO DEVELOP YOUR E-PRESENCE

Chinese users are very actives on social media platforms. They are used to comment, share their purchase, give purchasing advices. The two most used social media platforms in China are Wechat and Weibo.

WECHAT

WeChat has more than 700 million active users every day. The social media platform is amazing with a lot of convenient features useful for brands and users.

For brands,it’s really easy to communicate with your target and develop a strong communicty of followers.Having an account on WeChat enables you to promote your brand via mobile or tablet. And you also can sell your products on WeChat store.

WEIBO

Weibo is the second-most mass-used social networking site in China, with around 82% penetration rate across the country and more than 50 million active users per day in 2016. The microblogging platform encourage people to post comments and contents on all subjects “without” suffering of the censorship.

The social media platform attracted more than 130 000 companies, because it’s a really effective way to develop your e-reputation. Brands have to create a Weibo Official Account to improve their presence in China and attract more followers.

More than 56% of Weibo users follow at least one brand on Weibo.

BRANDING IN CHINA IS EVERYTHING

Branding in China is one of the most important thing. Chinese consumers buy the name of a brand. They want to buy premium, reputable brands.

 

You need to build a strong image of your brand. Branding is a way to be popular in China. Make people dream, make beautiful story around your brand name. It’s the key of success in China.

E-REPUTATION TO DEVELOP YOUR SALES

In China, brand reputation is a choice criteria. You have to do everything to always have a good image alongside chinese customers. If you lose your reputation, you will lose everything.

You need to make sure that you get good comments for your brand on forums, social media and other websites. Chinese consumers only trust brands that have good comments and recommendations from friends or family and on media platforms.

Encourage conversation about your brand to develop the traffic, good comments and recommendations.

Don’t hesitate to engage a digital marketing agency that can help you to keep a good image and avoid all bad comments about your brand.

WHY YOU HAVE TO CHOOSE GMA

SEO EXPERTS

Our focus is to promote your business with your target closely in mind. After all my explanations, you understand that the key to sell online is to have a good image and to be reputable. We’ll use digital tools including: Baidu SEO and SEM, E-PR, Media Buying (DSP) & Community Management. Then, we’ll manage the campaign and assure its optimization & success.

 

We worked with more than 300 western brands for SEO solutions.

LEAD GENERATION PROFESSIONALS

To be effective in your lead generation, you need to develop a good e-reputation. Online advertising & quality contents will help you to develop your e-reputation.

 

We are lead generation experts and we apply the solutions we offer to companies to our agency. Thanks to this solutions we get an average of 350 leads per month (March 2018).

EXPERTS IN DIGITAL SOLUTIONS

  • Website Creation, Development & Auditing
  • Baidu Search Engine Optimization
  • Social Media Marketing (WeChat & Weibo)
  • Reputation Management & Community Development.
  • Public Relations & Exposure in Chinese E-Media.
  • Analytics, monthly reports & analysis from our team of experts.

ROI-FOCUSED AGENCY

We are a ROI-focused agency. The solution is to attract and also re-target the most qualified traffic in order to increase conversion rates.

INTERNATIONAL TEAM

We are French and Chinese team, that means We understand the Chinese consumer: his needs and habits and We also understand foreign brands’ difficulties when they tried to enter the Chinese market.

Each member of the team is specialized in a field. They have experience and they are effective.

AND IN BONUS

If you come to discuss with our consultants  about your project in China we will offer the coffee.

 

And trust me… our coffee is really good wink

In China, the digital environment is very different from what we can do elsewhere. A local specialized agency can help you to save a lot of time and avoid some unforgivable mistakes on the market.

 

We have many e-commerce projects:

  • More than 100 digital commerce projects in China
  • 5 years of experience and know-how
  • 300% growth per year

OUR EXPERIENCE : OUR CASE STUDIES

WEWOOD

WeWOOD is a watch brand that manufacturers wooden watches. The brand was developed in 2009 in Italy.

The company plants a tree for every watch sold. As of December 2013, the company has planted 250,000 trees in America and other countries where the watch is sold.

OUR WORK

  • WECHAT
  • WECHAT STORE
  • WEIBO: Events on social medias / Account managing.
  • E-REPUTATION: 4 posts on different platforms / 8 PR on top fashion platforms in China.
  • LittleRedBook: A new store opened in littleredbook platform.

RESULTS AFTER ONE MONTH

WECHAT
4136 followers, 6430 views.
Increased 705 followers in one month.

WECHAT STORE
11 watches sold.

WEIBO
total 222579 views, 436 shares/forwards.
528 comments and 334 likes.
Increased 1360 followers in one month.

NANO JAPAN

NANO JAPAN was created in Japan in 2006. Having developed an impressive range of best-selling beauty & health products in Japan, NANO JAPAN has decided to sale their products in China.

OUR WORK

  • Weibo: content display
  • WeChat: content display
  • E-Reputation: content display
  • JD: e-shop + ads

RESULTS AFTER 2 MONTHS

Weibo
increased 1100 new followers and got more interactions than in the past.

WeChat
gained a number of new followers and views. Plus, by carefully selecting topics and weekly updates, we’ve accumulated a lot of marketing content.

JD
Buyers Campaign.
JD store art work (thumbnail pics modification).
Paid search.
Special Promotion.

GET IN TOUCH

The ecommerce in China is a huge market, with 86billion dollars for the crossborder,and Chinese ECommerce size was more than 1.9 trillon Dollars in 2016.

Many opportunities are available on the market, a lot of Companies are making a lot of money , but 50% of them are not successfull and you have to be aware about that.

 

Work with specialists of the ecommerce in China is the key of the succeed.