Professionals around the world are continuing to dream about China’s very attractive economic results. More and more SMEs are therefore trying their luck in China.
And that’s understandable…
Chinese e-commerce reached 354 billion euros in 2013. The online purchase from mobile phone meanwhile increased from 0% of revenues in 2010 to 44.8% in 2014 according to a China Mobile study on m-shopping. With the phenomenal growth of e-commerce and m-commerce of China, it is not even necessary to be registered in China to sell directly products to Chinese consumers. 400 million Chinese online shoppers are no longer just a few clicks of secondary brands.
In China, major cities are close to their saturation limit but cities from more rural provinces of Western and Central China have enormous potential. Since it is in these areas that the payment instrument of the largest e-commerce site in China, Alipay, recorded the largest number of transactions. Demand is still far from being satisfied in these regions of China. In 2012, the purchasing power of Wuhan for example increased by 14%.
In more recent years, we see that Chinese consumers who belong to the upper middle class tend to move away from internationally renowned brands. They are now looking for more distinctive products. They are more open to buy less well-known brands but who demonstrate innovation, creativity, and whose products are of good quality.
An e-commerce platform for the secondary brands ‘own business
Secondary brands must first open a website to represent their company. This site will also serve as their own platform to sell online. To appear in the top search results for Baidu, the leading search engine in China, the website should be written in Chinese and be hosted in China.
Characteristics of a good website in China
To please the demanding eye of Chinese Internet buyers it is important to provide a site with clear and esthetic content. Pages should contain a maximum of information and put forward information about the products to avoid the user from wasting time while searching for product information. Appealing photos and videos are a must-have. The payment process should not exceed 3 steps, otherwise it will be considered too long.
Chinese customers are expecting to buy cheaper on the internet; it is advisable to show lower prices than in physical stores prices. Promotions are also an essential step to attract Chinese e-customers.
The delivery must be free and extremely fast all over China. Some platforms such as e-commerce JD.Com even guarantee to deliver in less than three hours to their clients in Beijing and Shanghai.
Chinese e-shoppers are usually doing a lot of research to ensure that the products they are about to purchase will meet their expectations. They are avid readers of customer reviews on the products. They are also looking for much information on social networks.
Over 90% of Chinese Internet users are active on social networks. It is therefore essential for secondary brands to use platforms like WeChat, Weibo and QQ to their advantage. As a consequence you need to create an online fan community, interact with customers, answer their questions and post about the brand, their products and their promotional campaigns. A good image and e-reputation are crucial for a successful launch in the Chinese e-commerce.
At the end of 2013, Alibaba Group, which owns 80% share of the Chinese e-commerce market, launched Tmall Global. A new B2C platform specifically designed for foreign companies. It enables them to sell their products directly to Chinese online buyers without being registered in China.
This avoids them the legal difficulties. It is also a faster way to earn the trust and visibility of Chinese e-shoppers. The other two major B2C platforms such as Tmall or JD.com are also a good choice but less oriented toward foreign products. These Chinese platforms are very active in marketing and are adapted to the needs of Chinese consumers online.
Opening an online store on these platforms can test how the products from secondary brands will be welcomed on the Chinese e-commerce market. This is a good way for secondary brands to confront themselves to the realities of the Chinese market and avoid a lot of costs at first.
Secondary brands therefore have what it takes to succeed in the Chinese e-commerce. However, they should take care of making the necessary adjustments before embarking on this competitive market. Indeed it is the foreign brand’s role to adapt itself to the behavior of Chinese customers to successfully sell its products.
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