China Paradigms interviewed Michael Simonet, the founder of Alea E-commerce, a consulting agency specialized in Chinese online marketplaces, to learn how to open an online store on Tmall successfully.
Michael Simonet, an expert in E-commerce businesses in China
Michael Simonet completed his Bachelor of Science in Business Administration at FHNW School of Business in Switzerland. In 2009, he spent a semester abroad at Beijing Foreign Studies University, during which he discovered his huge interests in Chinese online marketplaces.
After graduation, Michael began working for Swissmooh, a premium dairy brand, and was responsible, among other things, for the market analysis of China. In 2012, Swissmooh wanted to expand its business to Mainland China. After conducting thorough research on the E-commerce business in China, Michael helped the company decide the exact location to land, which was Qingdao, Shandong.
In 2014, Michael and his team helped Swissmooh to open an online store on Tmall to drive sales. During his time at the company, Michael successfully promoted the brand as the biggest cheese shop on Tmall. In 2017, he started his own consulting firm, Alea E-commerce, to provide strategies and insights on how to sell on Tmall for international businesses.
Swissmooh: the most popular imported cheese brand on Tmall
Founded in 1905 by a group of dairy farmers in the North-Eastern part of Switzerland, Swissmooh is now owned by the leading independent Swiss dairy farmers’ association mooh. The company produces more than 400 varieties of cheese with 100% locally-traced milk.
In 2012, facing the volatile dairy product market in Switzerland, Swissmooh decided to expand its business territory to Chinese online marketplaces. Instead of using local distributors, Swissmooh chose to open its own store in Qingdao, Shandong, to embody its long-time commitment to product quality.
According to Michael, the reason why Swissmooh chose Qingdao over other major cities in China like Beijing and Shanghai was based on his insightful market analysis of this second-tier city.
“Actually, there is some potential chance in these tier 2 cities, where the spending power of Chinese online shoppers was getting higher,” said Michael, “And Qingdao had a quite higher GDP than other tier-2 cities.”
Opening an online store on Tmall is not an easy thing to do
Since Swissmooh opened an online store on Tmall in 2014, it has been one of the most popular imported cheese. Nowadays, when Chinese online shoppers search for imported cheese on marketplaces, Swissmooh is always among the top results. However, at the very beginning, the growth was quite slow because the company wrongly outsourced its business. After realizing this mistake, Michael decided to collect his team specialized in Chinese online marketplaces.
“I built a team of three, who really pushed to sell on Tmall,” said Michael, “Then we started to educate Chinese online consumers about cheese. Slowly, things started to kick off.”
With a thorough analysis of Chinese online shoppers, Michael and his team clearly defined their targeted audience as young mothers who are active on Chinese online marketplaces.
“You have to understand what consumers need and want,” Michael emphasized.
According to Michael, there are three crucial factors to work on while opening an online store on Tmall:
- How to differentiate itself on Chinese online marketplaces: To open an online store on Tmall successfully, brands need to understand why they are better than their competitors.
- How easy online shoppers will find the store through organic search results: Make sure the store will be on the first page among the same products on Tmall.
- How many feedbacks the store has: Being the first in the organic search results doesn’t grant 100% trust from Chinese online shoppers. Therefore, in order to build credibility, it is essential to earn feedbacks both from customers and third-parties.
618 and Double 11: The Yearly Carnival for E-commerce businesses in China
For any Chinese consumer, the best time every year is on June 18th and November 11th, when all stores on Chinese online marketplaces offer massive discounts. Even though these times seem to be celebrating moments for buyers, E-commerce businesses in China always experience enormous pressure during these periods.
“One simple thing that changed on Chinese online marketplaces can give E-commerce businesses in China a massive headache, which leads to fewer sales.”
To Michael, the first half of the year is not as intense as the second one. However, to prepare for the shopping festivals, he and his team would begin to come up with a plan for their E-commerce business in China starting from February, in terms of the amount of inventory, marketing strategies and so on.
“Every event on Chinese online marketplaces is about a bargain. You need to have enough time to give online shoppers a bargain, which drives traffic to your store.”