Strategic digital and multichannel consultancy Practicology has published its first report examining ecommerce opportunities for digital brands in China.
The report highlights the continued growth of the Chinese digital economy, and the increasing importance of Chinese consumers to the global ecommerce market. It also sets out to dispel myths about how Western brands should take their products to market online in China; including advice on how to improve lacklustre marketplace performance and identify whether their brand and products are suitable to be sold through their own localised Chinese sites.
Among the report’s conclusions we note:
- Despite some high-profile Chinese ecommerce failures, there is an increasingly strong business case for Western premium and luxury brands with stores in China to create a direct-to-consumer web presence (either in conjunction with a marketplace presence or instead of selling through marketplaces).
- Multichannel shopping behaviours are emerging in the same way as retailers and brands have already witnessed in the West. Global brands with Chinese stores must create digital strategies to support Chinese cross-channel shoppers and their dual requirements of entertainment and convenience.
- Brands are often left disappointed by their early performance on Chinese marketplaces. Selecting the right Trade Partner – the businesses who act as an interface between Western brands and the main Chinese marketplaces – can do much to mitigate this risk. Practicology highlights the key questions a brand must ask when selecting a Trade Partner, and some of the marketplace mistakes that brands make.
Popular Chinese social and messaging app WeChat provides a new digital commerce opportunity, particularly mixing content and commerce in conjunction with Key Opinion Leaders (China’s online tastemakers). It also supports multichannel shopper behaviour, through functionality such as WeChat Pay, digital coupons within the app and iBeacons and QR Codes to help store shoppers discover the brand’s content within the app.
- Whether selling through marketplaces or direct online, Western brands need to invest in cross-platform digital acquisition marketing to drive demand in what is an increasingly competitive environment.
- The majority of Chinese consumers with internet access use smartphones, and it’s crucial to offer a brand experience that is mobile-optimised, whether this is a responsive website for the Chinese market and/or a presence on WeChat.
“Despite the slowdown in its economy in recent times, we still believe that China offers the best growth opportunity for strong Western consumer brands that can adapt to the local nuances,” says Practicology CEO Chris Vincent.
He adds: “Marketplaces are still a critical route to market for many international retailers and brands, but that’s only part of a quickly adapting story. Those that want to keep up must also evaluate other online routes to market and digital marketing platforms to engage and service increasingly sophisticated Chinese consumers.”