The China market presents a huge opportunity for ecommerce niche brands. With a population of 1.4 billion and the world's largest middle-class consumer base, that market has become part of the strategy in recent years when brands aim to go global via China cross-border ecommerce.
However, China remains one of the toughest marketplaces to crack due to the language barrier, the Chinese government’s stringent regulations on foreign product imports, an entirely different digital landscape and online shopping ecosystem, and vast cultural differences. International high-quality niche brands remain very popular with Chinese consumers, but businesses must tread the path smartly to avoid pitfalls.
In this article, I’ll outline six essential tips for international ecommerce businesses looking to expand in China.
1. Evaluate your brand's potential and positioning with an expert
"In the initial phase, test, learn, and scale or fail fast is key,” says Adam Sandzer, Head of Strategy at Hot Pot China. “We have recently worked with smaller niche brands in beauty products, luxury goods, childrenswear, pets, and footwear that invested in understanding the market and gaining an initial foothold without putting their business at risk. This was vital as they now have a solid foundation from which to build.”
2. Leverage Chinese cross-border ecommerce to ease the launch
Cross-border ecommerce creates a hassle-free approach for brands looking to build sales via ecommerce but have not yet committed to registering a local office in China.
It brings unrivaled simplicity to product registration, tax, import tariffs, duty, customs clearance, and digital marketing—compared to general importation and trading. The products can be stocked in a Chinese bonded warehouse or even on the original soil before a customer places an order.
Elena Gatti is the Managing Director of Europe for Azoya, a Chinese ecommerce enabler and consultancy group. She says that "cross-border ecommerce will inevitably increase, which would be convenient to both merchants and consumers. The advancements in logistics and availability of secure payment solutions play significant roles in it. Consumers benefit from the accessibility of them.”
3. Think and act digitally
Social media platforms can bring an enormous number of Chinese customers to your brand—and it's important to adapt to the Chinese digital landscape.
In China, the most used social media apps include WeChat, Little Red Book, Douyin (Chinese version of TikTok), and, increasingly, Kuaishou. Developing a marketing strategy on social media can bring effective exposure to your brand.
“The faster the brand wants to grow, the more is needed to spend on social media. Although the correlation between growth rate and social media investment is very weak,” reports Tingyi Chen, co-founder of Walkthechat.
4. Be mindful of the channels which you decided to launch on
Alibaba's Tmall Global has the biggest market share in terms of ecommerce transactions in China, followed by JD Worldwide, VIP Shop, Little Red Book, Douyin, Kuai, and Kaola.
Brands are also increasingly turning to POIZON to kick-start their presence. Maintaining a multi-channel launch is the ultimate goal for most brands, but being smart in choosing the right cross-border ecommerce platform to launch can help maximize your marketing returns.
If you are a content-led brand, launching your sales channels on Little Red Book & Douyin can be a great approach. If you wish to compete for category traffic and take share from competitors, Tmall can be a great channel to build a presence and market share. Plus, multi-channel ecommerce platforms can help you connect to several marketplaces at once so you don't have to pick just one to focus on.
5. Find a good partner that can fuel your growth
Whether it's a distributor, a cross-border trade partner, or a marketing agency, it's important to identify their ability to grow your brand in China. A great foreign trade partner can help your brand save time and effort in discovering the product market fit and efficiently manage all aspects of operation in China, tackling localization, marketing, sales, and customer service in one go.
6. Streamline your current DTC business to expand in China
If brands seek a lighter solution, the Chinese market can be quickly integrated into your Shopify or BigCommerce store. Furthermore, consultancy groups like Azoya are working closely to onboard more brands and retailers who want to set foot in China but wish to develop a business model empowered by technical integration.
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Cracking the Chinese market is challenging for any international ecommerce business.
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