China is an ecommerce goldmine—there are 800 million internet users in the country with over half of the population active on its most popular channels. That being said, China is also an intimidating unknown for brands considering international expansion outside the US.
In a recent webinar hosted by Pattern, experts from our international team dove into the fundamentals of the Chinese market and what brands should know as they think about taking their product there.
The level of growth occurring across China’s ecommerce channels—even in the midst of the COVID-19 pandemic—is exciting. The area’s Gross Market Value in 2019 was $1,935 billion, and its biggest platforms are pulling numbers to rival Amazon.
“I really think the top two players of China will eclipse all of Amazon Global in the next several years,” said John LeBaron, Pattern’s Chief Revenue Officer.
The ecommerce platform Alibaba, which encompasses Tmall, Tmall Global, and Taobao, is dominating the Chinese marketplace, accounting for 50.4% of online sales. According to Joanna Perry, Pattern’s Head of Global Marketing, Tmall grew by 10% in the worst of the pandemic and Alibaba at large has a GMV of $945 billion.
Consumers love these platforms, and the brands that are effectively using them are finding lots of success.
“If you’re not already selling into China and you want to start,” Perry said, “I think we would all agree that Tmall global selling crossborder is the best place to start.”
China’s approach to customer service and distribution differ from the US, and those distinctions are important to keep in mind as you consider if expansion is right for your business.
“You’ve got to understand that the culture is different and they might have a different paradigm when they’re dealing with you,” said Chris Vincent, Chief International Officer at Pattern.
According to Vincent, one of the most important things to keep in mind as your brand considers China is the idea of face.
“It’s almost like dignity and prestige wrapped up into one thing,” Vincent said. “Face really can stop people from giving you an honest answer about things if they think that it will diminish their face or make them lose face.”
Maintaining face is particularly important to keep in mind when building business relationships and partnerships within China. It can also impact your growth in the market.
Desiree Wong, Senior Consultant for Pattern, said Chinese consumers equate the brands they’re using to their social status. In previous years, affordable luxury brands have been huge business for just that reason, so focusing your marketing on face can help.
Most customer service in China is carried out via live chat, and according to Vincent, 80 to 95% of all transactions for your brand will touch customer service in one form or another. This is because Chinese shoppers are very careful about what they purchase. They need to know that they can trust the businesses they’re buying from and that the products they see are the products they’ll get. That’s why brands need to offer stellar customer service.
“A well-trained customer service function is worth its weight in gold in China,” Vincent said.
Chinese consumers need as much information as they can get before making a purchase. Wong says brands should use 360 images, videos, and live-streams on platforms like Tmall to provide that information.
“For each single product, you’ll need even more than the A+ content on the Amazon US to illustrate what the benefits of the products are and also how it would look if they received the products so they won’t have any surprises,” Wong said.
Chinese consumers also expect to get their products very quickly, said Vincent. With 1 day shipping being standard in the Chinese market, considering the logistics of your shipping as you enter that market is another thing to think about.
Similar to Amazon Prime and Black Friday, sales holidays in China drive billions in revenue and can lead to lots of growth for brands who do them right. JD’s 618 festival, a sale occurring on June 18th, and Singles Day, China’s version of Prime Day, are great examples of major market holidays there.
In fact, Singles Day crushed Amazon’s US Black Friday sales numbers in the first 20 minutes of its launch. It goes to show the value in that market.
There are many ways your brand can stand out in China. According to Wong, using capabilities like live-streaming and interacting with customers through microblogging are a few examples. Tmall has the ability to reward customers based on their engagement with brands, and that engagement can help you stand out. Providing marketing through local influencers who can spread the word about your product and increase its face value is one way you can increase engagement.
Thorne, a supplements brand based in the US, made their entry into China with the help of Pattern by holding a sports event and inviting influencers and media to spread the word. This in addition to other marketing tactics brought Thorne $2 million in sales their first year. Read more about Thorne’s success in China here.
Having a partner that's just as invested as you in your Chinese ecommerce store and growth is important, but it's even more important that you choose wisely when going with a China ecommerce trade partner.
We suggest you consider these four areas when evaluating a trade partner to do business with in China:
Pattern is launching a store in China for US supplement brands that are looking to sell their products in the Chinese market. As Chris Vincent stated, launching a store on your own can cost upwards of $100,000 and 25% of expected sales volume goes straight back to marketing. This can be difficult for companies that currently have no brand awareness in China.
Whether you’re a supplement brand wanting to launch in the Pattern store, a brand looking to expand into the international marketplace, or you already trade in China and are looking for a partner to help you succeed—we can help. To learn more, schedule a demo with one of our China ecommerce experts below.
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Peak season is almost upon us and with all signs pointing to it starting earlier than ever, with Christmas gifting searches now ramping up in August and September, it’s time to start preparing for peak. In this article, we’re sharing our top five tips for planning and preparing for peak season with Google Ads and the strategies required to get your Paid Search ready so you can drive success over this crucial period.
In 2021, gifting search terms started increasing in popularity in August. The general trend is that people are looking, researching and weighing their options early, so it’s best to start your Paid activity early to ensure that you’re capturing that early research traffic. This will help drive revenue alongside aiding those consumers who are in their research phase.
From 2020 to 2021, spend during Cyber Week actually only rose 2% but in the weeks leading up to it, it increased by 16%. However, Cyber Week is still the biggest period during the latter half of the year, accounting for 23% of all online spend by consumers over peak. Being prepared and starting early will help you to maximise your time during this period.
According to Google, 48% of global consumers have stopped buying or using a service due to privacy concerns. Privacy is front of mind when consumers are shopping online and we know that Google is phasing out 3rd party cookies in 2023. This is going to make it much harder to track users online and it’s something that brands need to think about this now – waiting isn’t an option.
From a Google Ads point of view, you want to ensure you have set up the Google Ads tag across your site and have enabled ‘Enhanced Conversions’, which ensures all conversions are tracked and allows you to monitor other actions such as ‘Add to Cart.’ This is relatively easy to set up, especially if you use ‘Google Tag Manager’.
It’s also vitally important that you build up your first-party data during this time as this is data you own and it can be used when targeting consumers that have provided your brand with their email address. Pattern’s own experience shows that by segmenting and using first-party data, you can see a 10% improvement in revenue and ROI.
A full-funnel approach is now more important than ever as consumers become more discerning and have more choices than ever of where to shop.
Pattern has seen success with Google Ads’ ‘Discovery Campaigns’ (image-based ads that appear on Google platforms such as Gmail and the Google app), which have driven success both from a traffic and revenue perspective.
The performance of these campaigns is significantly enhanced by adopting a segmented and nuanced approach to first-party data and incorporating these into your campaigns. Other options for a full-funnel approach include YouTube and testing bidding on keywords that are more representative of the research phase. (e.g. ‘best baby clothes’ for a baby clothes brand)
Earlier this year, Google announced that they were moving away from Smart Shopping and launched Performance Max. This is a new campaign type that incorporates features and placements from Smart Shopping but expands them onto other platforms such as Gmail but also alternative creative options, such as images and videos.
Since Google has already started automatically upgrading Smart Shopping campaigns to Performance Max, expect to see some fluctuations in the first 2 weeks following the switch over but results generally seem positive. We recommend upgrading sooner rather than later to limit any potential impact to peak period.
Peak period will be even more competitive than in 2021 and you’ll need your budgets to support this period, we recommend boosting budgets in October to start capturing that early peak traffic. As we enter November and the Cyber Period, start early and make sure you are capturing those consumers looking for early bargains, ensuring you are being nimble in your optimisations and reacting to the data that you are seeing.
Overall, peak period is vital to help drive your sales and by preparing early, you will see strong results and drive success for your brand. If you want to discuss how your brand can navigate this next peak period, contact us to discuss your options with our performance team now.
Entering the ecommerce landscape is a huge undertaking for any brand—it usually requires a large investment in resources and expertise to really be successful. Any brand can quickly get in over their heads trying to navigate the nuances of SEO, fulfillment and logistics, distribution control, listing optimization, and meeting the numerous other requirements and administrative tasks to show up well on marketplaces.
Unfortunately, because it’s so easy for third party, gray market, and unauthorized sellers to obtain and sell products online, many brands find themselves pressured to execute an ecommerce plan without the right resources to succeed on marketplaces and their other channels.
So, for brands looking to enter the ecommerce space or improve their current and future performance, it makes sense to partner with an ecommerce consultant.
Pattern’s global presence and proven success with hundreds of brands has allowed us to develop highly effective ecommerce consulting services. We can guide your brand to navigate issues both large and small in marketplaces worldwide. To maximize your ecommerce efforts, you’ll need to understand what an ecommerce consultant does and how to select one who drives the right value for your brand and products.
An ecommerce consultant is a specialist in the ecommerce space who can give you personalized guidance on how to market your products and grow their presence on digital marketplaces.
An ecommerce consultant should be able to analyze your brand, audience, category, opportunity, and current roadblocks and help you understand how to utilize your resources (or what resources are missing) to be most effective in capturing your opportunities in the ecommerce space.
Not sure how to evaluate a consultant? Here are 4 key attributes to look for as you make your choice.
At Pattern, we prioritize brand obsession for a reason—we know that a brand-centered mindset makes a crucial difference in the outcomes and results our partners achieve. So in our experience, when you begin your search for an ecommerce consultant, it’s important to look for a partner who is specialized in ecommerce, invested in the product, and passionate about helping brands build and improve their strategies. Typically, this means finding someone that consults exclusively for ecommerce marketplaces, rather than choosing a consultant who offers many different services.
It’s also important to avoid choosing a consulting partner who can’t deliver the right experience for your brand. The best indication of whether your potential consultant can do that is to review their history, data, and results with other brands. Ask if they’ve helped others in your selling category, if they’ve solved specific issues your brand is facing, and why they feel you are a good fit. The key is to leave the conversation feeling confident that you understand your consultants’ capabilities and whether or not they match up with your needs.
It’s best to pick a consultant who knows how to guide a brand onto and through multiple marketplaces worldwide. You’ll want to take a look at your long-term strategy and think about the regions and platforms you’re currently on and where you might want to take your brand in the future. If your consultant is truly great at what they do, they’ll be able to help you perform well enough with your current product roadmap that it’ll be a no-brainer to expand your presence at the right time.
The most effective partnership with an ecommerce consultant will be able to give you both recommendations and point you to solutions for making those changes in your planning, processes, and execution. Your time and money is valuable, so you want to make sure that you’re spending it as efficiently as possible as you follow your consultant’s advice. So, before you commit to an ecommerce consultant, ask about the resources and concrete solutions they typically recommend to the brands they work with.
Finding an ecommerce consultant that checks the boxes can be a difficult task. At Pattern, our entire focus and drive centers around giving brands the tools and resources they need to succeed on domestic and international ecommerce marketplaces.
With over 100 global ecommerce consultants across 10 global offices, we have the right tools to partner with brands across the world to achieve better ecommerce success. We give specialized advice, then make sure our partners have all the adequate SEO, social media, CRM, Amazon multi-channel fulfillment services, and ecommerce outsourcing services they need.
Interested in ecommerce consulting services? Set up a call here to learn what Pattern can do for your brand on global marketplaces.