Considering Launching Your Brand in China? 3 Ways to Know You’re Ready to Go Global

Rachel Olsen

July 14, 2022

Executives seeing success in their current ecommerce strategy view China as the next step to increase their profitability. When you look at the numbers, it is easy to understand the logic—the U.S. currently has a 22% ecommerce penetration rate, while China sits at around 50%. And when you consider that China’s population is 4 times that of the U.S., you can begin to understand the magnitude of the opportunity. It has the largest digital buyer population in the world, and in 2021, China contributed to over half of the world’s ecommerce retail sales.

It’s clear that achieving next level ecommerce success might require a brand presence in China, and, if you’re prepared to make a long-term investment in growing your product presence and sales globally, expanding into China can be a great move.

As you think about growing globally, brands typically find greater success when they have a partner guiding them through the process. As the expert in ecommerce acceleration, Pattern has the global resources and local market expertise necessary to make a successful transition into new marketplaces, including China. Partnering with Pattern means your brand has access to our global network of fulfillment services and logistics, top-level data analysts and insights, proprietary technology, and local experts to help with in-market regulations and customs laws—we can help you execute a profitable, long-term strategy tailored for your brand. 

3 Ways Brands Will Know if They are Ready to Expand into China

1. Understand the Required Investment

Most brands think of expanding into China as a quick way to boost their product sales, or something they can experiment with for short-term gains. This may be somewhat true when expanding into new domestic markets, but expanding into China requires a much bigger commitment and many more resources than brands usually expect.

Almost every brand that Pattern launches in China finds success on Tmall, Alibaba and other marketplaces, but starting with the right mindset is key to their performance. We like to ask brands, “Are you willing to lose money for the next five years in order to expand to China?” 

This certainly isn’t the standard timeframe that most brands experience, but it helps leaders understand that this move is about long-term strategy, rather than short-term wins. It takes a huge effort in acquiring resources, establishing a solid strategy, and staying persistent over time to really see improvement in your profits. 

Pattern’s local market experts provide brands with additional, crucial insights you’ll need to factor in as well, like understanding regulatory and customs costs, multimedia resources you’ll need for China-specific listings, product filing needs for your brand, and other hidden fees you haven’t considered yet.

2. Conduct Extensive Market Research

It’s easy to get excited about the profit potential in China, but the size of the opportunity also signifies the difficulty in taking advantage of it—the competitive landscape of ecommerce in China is much larger and more intense than it is domestically. It’s hard enough to compete in U.S. ecommerce when you’re on the second page of Amazon. How do you compete when you’re showing up on the 200th page of Tmall? 

Every brand must do its research. You’ll need to know things like: which comparable products already exist in China? Is your product already manufactured or sold there? Is there demand for this product? How does your product work with the cultural nuances of China vs the U.S.? What is your pricing strategy and promotional expectations?

Another big consideration is the dynamics of the products you’re trying to sell. For instance, many people don’t understand that most buyers in China don’t trust ecommerce sellers. There’s a huge amount of fake items, so every product you sell needs to have an authentic and informed customer service touchpoint. If you’re not prepared to provide the manpower and resources to execute exceptional customer service, implementing that support late in the game can be a big setback to your successful expansion.

3. Develop Strong Online and Offline Activation Strategy

Once you’ve done your research to understand the dynamics of your product in China and how it fits into the landscape, you’ll have to develop a solid activation strategy for going forward, both on- and offline.

The sheer volume of transactions in the China marketplace and the number of products available makes succeeding there much trickier than on U.S. marketplaces. Brands typically have a much harder time achieving consistent performance in China, especially if they’re already struggling with getting product to perform well domestically. So, before you expand to China, you’ll need to have a clear, foolproof online strategy for advertising, product listings, optimizations, and more to guide you on your way

An offline activation strategy is a must, too. For instance, the cost and hassle of distributing your products in China can be a big surprise to brands. In order to get product into China, you’ll need to decide if you’d like to establish domestic representation, which means working with a trading partner (which has its own additional costs), or using the cross-border distribution method, which requires setting up an expensive flagship Tmall store in China. 

Your offline strategy also needs to include ways to introduce your products to consumers so they can physically interact with them to continue building trust with your brand and expanding your customer base. Pattern helps our partners to achieve this with product placement opportunities at in-person events, brick and mortar stores, and other locations.

Another consideration: it’s smart to avoid working with a Chinese trading partner as you expand to help you stay in control of your brand. Pattern’s brand partnership approach involves buying your inventory and managing all the logistics necessary to get your product into market and, ultimately, in the hands of your consumers.

Reach Marketplace Success in China with an Ecommerce Accelerator 

Expanding to China marketplaces is a great idea for brands looking to take their ecommerce success to new heights. If you’re prepared to make the investment, you’ve done the necessary market research for all aspects of your product’s performance, and you have a great activation strategy in place for both online and offline success, you’ll be set to take advantage of the huge opportunity with Chinese consumers.

As a Pattern partner, you can access our extensive expertise and resources to succeed both domestically and internationally. We have an established presence in China (with over 150 employees, 3 offices, and our own audit warehouses) and teams of highly experienced global experts to help your products perform their best and increase profitability for your brand as a whole. 

Contact us to learn how we can establish or improve your business on a global scale.

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MAP Pricing vs MSRP: What's the Difference? (blog header)
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MAP Pricing vs. MSRP: What's the Difference?

“MAP” and “MSRP” are two of hundreds of acronyms floating around in the world of ecommerce, and they’re two of the easiest to confuse and misunderstand. While MAP and MSRP do play similar roles, they also have key differences that can work in tandem to support and protect your brand on marketplaces.

So what are MAP and MSRP and why do they matter? Here’s what you should know: 

What is MAP?

MAP (or minimum advertised price) is the minimum amount that a manufacturer or wholesaler recommends resellers advertise their products for. MAP pricing policy is essentially a one-way boundary you set to protect your brand, protect the margins of your resellers, and maintain fair competition across all of your distribution channels.

When setting a MAP policy strategy, remember the important things you’ll want your MAP policy to do are:

  1. Protect the interests of your brick-and-mortar resellers, giving them the margins they need to display and carry your product as well as sell it.

  2. Stay small enough that it discourages resellers from heavily discounting your products and keeps competition fair.

  3. Accurately reflects on the brand image and value you want to reflect.

“Advertising” and “recommends” are the key terms here. MAP policies should only recommend the price that is advertised online or in-store for a product, not attempt to fix the actual selling price of the product—that’s illegal—or recommend the actual selling price. That’s MSRP’s job.

Benefits of MAP

MAP not only keeps competition fair, but allows you to control your brand identity and promote consumer trust of your product and brand. Here are some of the benefits of having MAP policies:

  • Better brand protection and control

  • Creates a level playing field for retailers

  • Reduces bad customer experiences

  • Provides an accurate performance analysis

How Can Brands Effectively Enforce MAP?

It’s critical that MAP policies are structured in such a way that a brand avoids violating anti-trust laws. One way brands can effectively enforce MAP is by simply monitoring online product prices across digital channels to identify fluctuations in the market. 

At Pattern, we help brands not only develop a MAP policy, but also enforce it. Enforcing MAP policies and gaining marketplace control includes finding unauthorized sellers, which Pattern’s data finds. Once Pattern finds the unauthorized sellers, Vorys eControls (Pattern’s legal partner) steps in and handles the takedowns of unauthorized sellers, continuous enforcement of brand management, and reseller policy enforcements.

What is MSRP?

MSRP (or manufacturer’s suggested retail price) is how manufacturers standardize pricing across their resale channel and determine what price is fair for their product. The key difference between MSRP and MAP is that MSRP is the actual price manufacturers set and recommend retailers charge for their goods while MAP is the advertised price. 

MSRP doesn’t necessarily have to be the final price of a product—it’s most often a starting price—but it is determined by taking into account all of the costs associated with the distribution and manufacturing process for a product and the margin amount resellers need in order to make a profit. MSRP also establishes value. For example, if a brand wants to build a premium brand, the MSRP can reflect the actual or perceived value of their product.

Benefits of MSRP

Setting up an MSRP for your product includes the following benefits:

  • Maintains brand equity

  • Establishes brand and product value

  • Standardizes costs across marketplaces

How Can Brands Effectively Enforce MSRP?

Like MAP pricing, MSRP has to be set up as a one-way policy and not an agreement between a manufacturer and a reseller to avoid landing a manufacturer on the wrong side of the law. It’s a recommendation, not a contractual bind. As mentioned for MAP policy, Pattern helps brands effectively enforce MSRP with our proprietary data and expertise to protect their brand. 

How Do MAP and MSRP Work Together?

MAP and MSRP have different applications that may prove useful in different scenarios. For example, MAP policies are typically more useful in marketplaces where competition is fierce and price erosion happens easily if sellers are left unchecked. Ideally, however, MAP and MSRP are a dynamic duo that work together to serve the interests of your brand, support your resale channels, and protect your resellers.

Setting an MSRP establishes value for your product and lets your resellers know you’re serious about controlling channel conflict, maintaining pricing equity, and protecting their margins so they’re more confident setting pricing at the MSRP level.

MAP is the second half of setting a pricing policy. Setting a MAP price for your product, in addition to an MSRP, further standardizes pricing across your resale channel and gives legitimate resellers a fair environment to compete in while setting boundaries against unauthorized sellers harming your brand.

MAP combined with MSRP creates a stronger level of brand protection, giving your brand more sustainable, profitable growth.

Maintain Brand Control With Pattern

MAP policies can be tricky to draft, because there are so many legal lines to tiptoe around and so much nuance that goes into pricing. They can also be tricky to enforce without the right tools. At Pattern, partnered with Vorys, we have the tools and resources to help you maintain brand control on all marketplaces. 

As an ecommerce accelerator, Pattern can help you identify MAP violators and regain control of your brand online so that your image and your resellers are protected. To learn more, contact us today.

Athlon Optics Walmart.com Launch Has Record Setting Sales within 3 Days
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Athlon Optics Walmart.com Launch Has Record Setting Sales within 3 Days

Athlon Optics sells scopes and other optical accessories like binoculars for anyone who may be hunting, shooting recreationally, or competing.  After achieving significant success on Amazon, the brand wanted to launch on Walmart. As a growing marketplace with huge growth forecasts, Athlon saw their competitors already staking claim on walmart.com and saw opportunities for increasing their sales.

As a prestigious brand in its category, with loyal consumers, Athlon does so much with very few resources. With less than twenty employees in the entire company, managing everything from customer service to product development, their ecommerce team needed support to scale to a new marketplace.  And, they needed a partner who had a relationship with and deep understanding of walmart.com to accelerate their growth. Pattern is a one-stop shop for Athlon, providing the resources and expertise, so Athlon could also save budget and stop outsourcing so many different aspects of their marketplace business.

Athlon Optics Prepares for a Seamless Launch

Sometimes brands who transition from 1P to 3P with Pattern have no proprietary sales, marketplace data or content such as product images, video, or optimized copy. These circumstances create a more hands on transition for Pattern and may interfere with launch expectations. 

But Athlon was the consummate partner and overly prepared to transition to 3P– buttoned up, organized, and ready to take on walmart.com’s list of launch needs. Athlon provided all the required assets on time and was very organized.  The images were shot, formatted, and categorized as A+ content that Pattern ported over.  This process dramatically reduced wait times and lag times within the platform.  Plus, since the content was optimized for marketplaces, all images, copy, and listing information uploaded in the first pass. 

Pattern’s Walmart Expertise Leads to Success

But the content worked because of Pattern’s resources and marketplace expertise.  Pattern provided Athlon with a very clear outline of needs and expectations for seamless launch and this process has become a playbook for other brands on walmart.com.  The team’s mutual partnership and Pattern’s diligent follow up with and detailed attention to Walmart processes and logistics prevented Athlon from getting lost in the weeds. 

Three Days is All it Takes

The successful, thorough, and quick transition to 3P with Pattern secured Athlon most likely the fastest ramp-up periods for any brand on Walmart.com.  

Together we achieved success such as:

  • 'Best in class' turnaround–98% faster onboarding than average brand on Walmart.

  • First sale within the first week of landing at Walmart. 

    • Unprecedented turnaround considering the ramp up usually needed to gain momentum and traction with reviews on Walmart. 

  • Exceeded initial first month growth projection by 34%.

Athlon was so impressed by the ease and simplicity of its launch and execution on Walmart that the brand wants to grow our 3P relationship with other marketplaces such as Amazon Canada and Target+.

And, in the meantime, look out for Athlon Optics in Walmart Deal Days in 2022.  A huge win for any brand tied to organic advertising and new traffic opportunities across all media.

Pattern Helps Brands Expand Marketplaces 

Pattern has the 3P partner experience and deep expertise on Walmart and other global marketplaces to help a brand expand their footprint to maintain sales momentum and a competitive edge. Pattern, an ecommerce accelerator, takes on the responsibility of your stock and provides the expert resources needed to successfully launch and continue to grow your revenue on global marketplaces. 

Learn more about Pattern’s expertise and partnership on Walmart.  Contact us today.

Amazon A+ Content
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Amazon A+ and Premium A+ Content: Pros and Cons Brands Need to Know

Long gone are the days when Amazon listings were limited to a simple product description, five bullet points, and eight pictures. As the platform, and number of sellers, has grown, sellers have had to be more and more strategic and eye-catching to increase traffic and conversions on their listings.

Brands on Amazon have plenty of attractive options available to design their Amazon storefront, which reside in two of Amazon’s content tools: A+ Content and Premium A+ Content (or  A++ Content).

Here’s the pros and cons of brands using A+ Content vs. Premium A+ Content:

What is Amazon A+ Content?

Amazon A+ Content is a standard feature available to all Amazon Sellers and free as one of the many benefits of Amazon Brand Registry. 

With A+ Content, a product listing can have more than a plain text description and standard photo reel–it can include high quality multimedia photos and videos alongside eye-catching information to share the product story, and not just the product appearance.

Some noteworthy features that Amazon A+ offers are:

  • Multiple, varied images of a product

  • Strategically concise introduction

  • Video

  • Bullet points

  • 360° product views

  • Matrix comparison charts

  • “What’s in the box” section

What is Amazon Premium A+ Content?

Amazon Premium A+ Content, or Amazon A++ Content, is a tool that goes a level beyond basic A+ Content, giving brands the ability to showcase their product’s most important features and benefits with a modern, visually appealing structure. 

In August 2022, Amazon announced Premium A+ would be available on Seller Central for free usage during a promotional period. Previously, Premium A+ content was available only by invite for brands using Vendor Central and could cost anywhere from $250K and $500K per product. 

With Premium A+ content, a brand visually communicates using imagery and video, and relies much less on text due to strict character limits for product descriptions. According to Amazon, implementing Premium A+ content can increase your sales by 20%.

For the first time ever, Premium A+ expands the usable real estate of the page, using the entire width of the screen for a sophisticated and modern feel.

Some noteworthy features that Premium A+ offers are:

  • Video

  • Full-width imagery

  • More space

  • Clickable Q&A

  • Interactive comparison charts

  • Carousel modules

  • Mobile-friendly and voice-friendly product pages

  • Testimonials

Pros and Cons of Amazon A+ vs. Premium A+ Content

Although their purposes are similar, there are some key differences between A+ Content and Premium A+ Content. Here are the pros and cons for each tool:

Basic Amazon A+ Content

Pros:

  • Free and unlimited use for all Vendors.

  • An effective tool to enhance customer experience and product listings.

Cons:

  • Less features than Premium A+.

  • It's not as visually appealing as Premium A+.

Premium A+ Content

Pros:

  • There are 16 extra modules to choose from that are media-rich and make an impact.

  • You have two more available module slots than Basic Amazon A+.

  • Overall, there are more possibilities for hyper-engaging content.

  • You can expect a sales rate increase of up to 20% with Premium A+, according to Amazon.

Cons:

  • Amazon has positioned Premium A+ content as more of an exclusive tool, requiring eligibility based on past content to qualify for Premium A+ content. 

  • Character limit restrictions are more strict than Basic Amazon A+.

Elevate Your Amazon Content with Pattern

Ultimately, both of these tools exist to help you and your brand provide customers the best online shopping experience possible. Although Premium A+ offers plenty of exciting new options for enhancing customers’ buying experience, it may not be for everyone. Optimizing your Amazon listing with A+ or Premium A+ Content can provide the best opportunity to build a strong reputation for better brand-recognition and customer affinity. 

Our creative and digital marketing experts at Pattern can help brands use A+ Content and Premium A+ Content to increase conversions and give buyers an amazing experience.

Learn how Pattern can help you increase conversions on Amazon. Contact us