China Paradigm interviewed Dr. Renata Thiébaut, one of the first experts in the cross-border e-commerce field in China. As head of business intelligence at Web2Asia, a China e-commerce Tmall partner (TP), she shares her experience in strategizing the online business of companies entering China, particularly in localization to the Chinese market.
China overtook the US in 2013 to become the world’s largest e-commerce market. According to a 2019 report by McKinsey, online retail sales were expected to reach US$1.5 trillion in China, which is a quarter of the country’s total retail volume and is more than the retail sales of the ten next largest markets in the world altogether. As the e-commerce landscape becomes increasingly competitive, matching the tastes of Chinese consumers and retaining customers are some challenges foreign brands face as infants on the Chinese market.
Tapping into the booming e-commerce industry as a China e-commerce Tmall Partner
Web2Asia has been around since 2005, focusing more on marketing at the time. It wasn’t until eight years ago that they saw opportunities in the growing e-commerce industry and became one of the pioneers and experts in doing cross-border e-commerce in China. They paralleled with the start of e-commerce in China as they became an Alibaba certified Tmall partner agency. With an undoubtedly close relationship with Alibaba and as one of the top three TP’s from Alibaba, Web2Asia does the store operations while Alibaba is the marketplace, thus receiving most client referrals from the tech giant.
Web2Asia is positioned as one of the few foreign-owned China e-commerce Tmall partners in the local market with management dominated by foreigners; this allows them to tackle better different foreign markets, particularly Europe. Around five years ago, the agency rapidly expanded, and now they have growing number of stable clients for Tmall operations and other services.
Brands need to match product with the appropriate Chinese marketplace platform
Alibaba was first founded in 1999 as a China-based B2B marketplace, while Taobao started in 2003 purely as C2C and Tmall emerged much later during the 2008 financial crisis as a B2C platform. As e-commerce in China develops, many other platforms, such as JD and Pinduoduo, become a choice for new entrants. Renata reminds us that the best platforms in China are those that are more relevant, but a brand also needs to consider their type of product in order for localization to the Chinese market. For instance, JD is popular with electronics and may even be the better option than Tmall in this regard although Tmall is trying to catch up. On the other hand, comparing Tmall Global and JD worldwide in terms of health supplements, Tmall Global would be the stronger competitor (read more on running a successful online business in China).
“Sometimes [brands] want to open on JD, on TMall and on different platforms like Kaola and the Little Red Book. It’s always good for you to start slowly, to choose first the best platform and then you do a trial in the market; if the product is not good you can adjust because you need to select a hero product for you to push the brand in the Chinese market.”
Jellycat: A successful case of localization to the Chinese market and storytelling marketing
As a China e-commerce Tmall partner, Web2Asia helps foreign brands with their online business strategy and operations in online stores. One of their most successful cases that won a feature in an Alibaba best case studies video is Jellycat, a UK brand that sells plush toys. Confronted with fierce local competition, Web2Asia had to position the brand exceptionally and thereby went with a storytelling approach through embracing UK culture in the marketing, such as using the royal family as a theme. Also, each year they launch the animal of the year based on the Chinese zodiac. This brand case reflects the importance of website localization to the Chinese market, leading them to earn the title as the top plush toy in the Chinese markets and multiple Alibaba awards (read more on opening a Tmall store).
However, success didn’t come easily. With very low sales in the first couple months, Web2Asia realized that they were targeting the wrong audience. Therefore, they re-strategized the brand and switched from targeting kids to women 25 years old and older. Renata emphasizes the importance of data and being able to utilize it to strategize the business of her clients as head of the business intelligence unit (more on localization in the Chinese market).
“We needed to change the mentality that offline competes with online. It really goes hand to hand, because the more people know your brand, they can also go and shop online, so you can leverage also the data you have from offline to convert to online.”
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