demystify 7 myths in china's ecommerce market
TRANSCRIPT
Demystify
Everyone talks about the market being BIG!
(Source: eMarketer)
Foreign retailers now face a lot of options to approach Chinese market. However, it should be noticed that there’s a lot of misreading about China’s distinctive market.
Unit: Billion dollar
Australia
Japan
U.S.
U.K.
France
$672.01 $349.06
$99.39
$61.84
$42.60
$19.02
$89.55
Germany
Global online shopping
GMV in 2015
China
Myth 1 Being a market leader in your country
will ensure success in China
Truth: China’s ecommerce market is rather different from other markets. New comers may come across:
Monopolized marketplaces
Different buying behaviors
3
The market is highly prone to be monopolized by a few players.
There are more than 3000 vendors in Tmall Global.
Monopolized marketplaces20 Merchants
The rest
90% Sales
10% Sales
4
The age group between 20 and 40 is a huge market and, unlike their elders, they like to try new things, are happier to indulge themselves, are more brand-conscious and are more receptive to new ideas.
Different buying behaviors
2.1%
24.5%
30.7%
23.4%
12.0%
5.2%2.1%
Under 10 10 - 19 20 - 29 30 - 39 40 - 49 50 - 59 60 and above
5
Truth: The high fees will eat into your margins and the competition is fierce.
Costs and feesFierce onsite competition on the platform
Myth 2 The best choice is to open stores on
China’s mainstream marketplaces
6
You need to invest set-up fee and annual technical fee besides commission. You need also to pay Tmall partners fees.
Costs and feesPromotion and marketing costs
Technical Fee
Cost Components
Commission
Tmall Partner Fees
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Steep discounting and cutthroat competition on the site will undercut your business.
A profusion of e-retailers offer prices that are much cheaper than domestic stores, leading to a bargain-hunting environment.
Fierce onsite competition on the platform
OFF
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Truth: Business can be conducted in a cross-border way.
Working with local service providers makes an international expansion scalable and accessible.
Marketing
Cloud Hosting
Financing
Operation
Myth 3 Entering Chinese market requires a
lot of investment
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Local Office
Local Hire
Legal Entity
Physical Presence
Product Certification
Full Product Range
Local Stocking
Entry Cost Cost more
Traditional expansion
Cross-border eCommerce
10
Truth: Some cross-border merchants are selling fake goods, which can be rampant in some highly profitable products like milk powder.
Myth 4 Chinese customers always believe that the
products they buy from overseas are genuine
An online investigation on Baidu shows 98% of the respondents believe they may buy fake goods through overseas online shopping.
It could be a FAKE! It will never be a FAKE!
98% 2%
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Photo endorsement
Link between CN site and original site
Video endorsement
Overseas PRInteraction between your team and Chinese customers in Chinese social media
To reassure Chinese customers that you are selling the genuine products, you’d better adopt a localized marketing strategy.
xxx announce opening the CN site!
China Click Here
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Truth: Chinese market are significantlydifferent from western markets. What works inyour domestic market will not beguaranteed success in China.
There’re a lot of work to do.Take advantage of Chinese customers’ shopping psychologyGet used to the internet environment
DO NOT
ENTER
Myth 5 Duplicate your local marketing and promotion
strategy and things will work out
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Shopping is a way to demonstrate their status, or put it in a Chinese way, face. Your marketing strategy should take this fact into consideration. An up-scale brand image is critical for you to satisfy their face-enhancing needs.
Take advantage of their shopping psychology
Ray-ban
Tiffany
Prada
Italy high heels
iPhone
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Totally different Social Media and Search Engine System
The different internet environment means that you should adopt different marketing approaches.
Get used to the internet environment
B du
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Overview of Chinese internet environment and its impact on eMarketing
Wechat is a SNS app that has the features of Facebook, whatsapp, instagram and more… It’s an ideal marketing platform that you can’t afford ignoring. 386 million
214 million
35.7%
64.3%
Gender
549 million monthly active users
<18
2.0%
45.4%
40.8%
9.5%1.4% 0.3% 0.6%
18-25
Source: Curiosity China
26-35 36-50 51-60 60+ N/A
Age
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Overview of Chinese internet environment and its impact on eMarketing
11-16 17-23 24-33 34-45 more 46
SINA weibo is China’s most popular microblog site, the number of Weibo's MAU (monthly active user) in 2015.9 is 212 million, with a YoY growth rate of 33%.
Source: Sina & Weibo Data Center
The most active users of Weibo are at the age betwenn 17 and 33.
9%
40%39%
11%
2%
Truth: There is a lot more to think about than just translation.
Chinese customers need more illustrative and informative product description, which can’t be achieved by simple translation.
Myth 6 Simple translation is enough
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A striking contrast between the Chinese site and original site
The Chinese site offers a more vivid and extensive product description page. Apart from giving basic information, the Chinese site displays promotional words about why you should buy the products in a convincing narrative.
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Truth: Long delivery time has long been a problem ailing Chinese cross-border customers. The customers want a more swift and secured delivery.
Delivery time that overseas online shoppers accept
15-30 days
More than 31 days
Less than 7 days
7-14 days40.8%
43.5%
14.1%
1.6%
Myth 7 #Chinese cross-border shoppers have more
patience in delivering period, so foreign retailers can be rest-assured in logistics
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As an utterly different market, China poses as both an opportunity and a mystery to outsid-ers. Cooperating with a local expert can give overseas retailers competitive edges.
A local expert can help you in these ways.
Most of all, it’s quick to start and with minimal risk.
Conduct promotions and marketing in a controllable
and affordable way
Promote brand image by localized marketing
Accelerate the delivery
Render the most suitable webpage contents
Adapt to the local internet environment
Conclusion
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Marketing
Let’s work on it together! Azoya – your bridge to China retail.
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Cloud Hosting
Financing
Operation
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