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14 SEP. 2017

“JIA YOU!” – How to “Give Some Gas” to Your Fledgling China E-Commerce Business

Marta Dealcaraz

Business Director

In the past, penetrating the China market seemed as difficult or insurmountable for most companies as penetrating the Great Wall. Going back to the 1980’s and 90’s, unless you were Coca-Cola or General Motors, it seemed like the China market was off limits. Fast-forward to 2017, and it appears that China is just a mouse click away - with e-commerce giants like Alibaba, T-Mall Global, JD.com and others offering “easy” access to reach the lucrative Chinese consumer from virtually anywhere in the world. 

But is succeeding in the China e-commerce game as “easy” as most think?

While there are some amazing success stories of foreign players who have entered China through e-commerce, the reality for most is quite different. Most new players will enter into the e-commerce market in China with high expectations, but soon have the unpleasant reality hit them in the face. Many of these companies will inevitably try to change to another platform or partner with an effort to boost slow sales, only to later realize equally unimpressive results. Some of them will fail so miserably, that they will withdraw from China altogether and blame the e-commerce players for their disappointment.

Is it fair to blame your China e-commerce logistics partner for your failure?

Not really. In the rush to enter the China e-commerce bonanza, many companies and their marketing managers forget that rules of marketing and branding apply to China just as much (if not more so) as they do in other markets. It would be naive to manage your branding strategy on the hope that your Chinese e-commerce partner will do it for you. It simply will not happen. Your partner may allow you to access millions of potential buyers, but it is only a platform. Only you yourself are able to generate the needed demand by building your brand and marketing strategy for the Chinese market.

So what to do?

  1. Plan, plan, plan!
  2. Define your brand strategy first for China before you hop on the e-commerce platform. Take the time to analyze the market, do proper segmentation, study your competitors.
  3. Base your brand strategy on thorough research and insights – rather than “shooting from the hip” intuition. A local research partner who knows the intricacies of the market is fundamental.

For most brands, China is an entirely different “animal” compared to other markets. A cut-and-paste strategy you have used for other markets will not work. Rather, in many cases you will have to reinvent your branding strategy altogether to meet the ever-growing needs and sophistication of the demanding Chinese consumer.

Will this strategy be cost effective?

Yes. Going into China, albeit much easier than in the past, cannot be done on a shoe-string budget. Many small and medium enterprises make the mistake of thinking they can make a minimal investment in return for their fair share of the huge China market. Again, this is bound to fail. Investing an important portion of your marketing resources to enter the China market along with a sound branding and marketing plan is the wise thing to do, as it will help you generate sales more quickly and effectively and ensure a far greater chance of succeeding in such a competitive and cut-throat environment.

To summarize:

  1. Invest the time and resources to define your brand in the Chinese context.
  2. Localize your brand with the help of a local branding partner.
  3. Develop your e-commerce strategy in alignment with your branding strategy, and coordinate properly between your different local partners.

Following these simple steps will make the difference between success and failure.

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