Launching on Tmall
Over recent years, we've watched a number of foreign retailers step foot into the Chinese market through Alibaba's Tmall Global platform, which comes to no surprise given that Alibaba's retail marketplaces bring over 515 million active retail consumers on board.
Seeking a portion of China’s online market is no easy task due to its restrictive regulations and red tape, hence many opt for a partner in China to help. This way a retailer is able to make use of local expertise that makes operating in China smoother and allows it to reach consumers more effectively.
Yet, to open a storefront on Tmall Global is a selective process, there are many compliances to follow and it can be costly. However, this brings us to the main point - just because you’re on Tmall does not automatically mean you’re on to a sure winner.
Chinese consumers rely on the authenticity and reliability of Tmall for genuine overseas imported products, but nursing and educating them about your foreign brand is a necessity and will require additional marketing and content creation for support.
However, digital trends continue to evolve and new apps are constantly changing the marketplace, which means that brands need to look beyond Tmall if they are to successfully tap into the Chinese market.
The Chinese Live-Streaming Community
Source: le furet du Retail
Macy’s live-streaming during the Single’s Day 2016 event has become a case study on how a foreign brand can interact with their customers abroad.
The department store retailer may be a name familiar to you, but not necessarily for those based in second and third-tier cities in China. Through live steaming, Macy’s was able to bring viewers to New York and show its surroundings and environment – which helped to emphasize its philosophy of “the future is not retail, but the experience”.
Another case of note is AuMake, an Australian company running on a Daigou business model through a retail hub in Sydney's China Town, where suppliers can connect with their Chinese customers through live-streaming. The initiative helped more than 70 Australian suppliers partner with 150 Daigou sellers, drawing a live viewing audience of over 730,000.
The trend revolving around live-streaming has massively kicked off in the China market, and by integrating this concept with retail helps bring retailers and customers together on a united platform. Broadcasting in real-time creates genuine interaction and adds a personal touch to the shopping experience through a screen.
The Evolution of e-Commerce: Social Commerce
A shift to WeChat commerce has also been a popular trend, given the ecosystem of the app itself. The launch of micro-programs within WeChat last year has prompted retailers to recreate their app within the messaging platform, thereby creating a native m-commerce shopping experience for existing WeChat users.
Douyin is another new social live-streaming app to recognize (similar to the likes of Musical.ly), with the app hosting over 100 million users after its launch in 2016. The platform mainly attracts Gen Z users and has already caught the attention of brands looking to increase organic reach. Douyin’s 15-second video format can be used by brands to create marketing campaigns and challenges, prompting a user-generated based platform to market their promotions.
These social commerce platforms provide a gateway for brands to access specific consumer segments and communities. Mainly used as part of a marketing campaign, the sales conversion may not be as strong but these platforms do enable data tracking and visibility of a customer's pathway to purchase motivations.
Source: Parklu, Michael Kors Douyin Filter
The future is not purely just about retail, but the experience it gives as well as the connections that can be forged with your target market. China may be a land of golden opportunity, but it can also be challenging to grasp if one does not localize offerings and marketing campaigns.
In addition, the huge shift to social media app platforms by consumers means content and web pages need to be optimized for mobile devices. This is critical as ecommerce in China skipped over the use of computers and laptops and jumped straight ahead to mobile devices.
It is also key to remember that shopping for the Chinese consumer is a leisure experience - not a chore. Online shopping has to evoke a real experience, which is why content is just as important to educate your customers.
To get a foothold in China, know that you have to create a strategy for China alone and remain open to all of the different ways through which shoppers can be reached.
Tiffany Lung is a Retail Tech Analyst at tofugear specialising in International Fashion & FMCG industries. In the past she has worked in both London and Hong Kong with numerous retailers, both front-line and back-end retail.
Title Image Source: Tmall