Leveling up your China ecommerce strategy

It’s no surprise that China’s global ecommerce influence is growing. It’s home to four of the ten largest marketplaces in the world by gross merchandise value (GMV). Since 2013, China has reigned as the largest ecommerce market, and it’s expected to continue growing through 2027.

Brands selling in China are taking advantage of a huge growth opportunity. But there are challenges, nuances, and strategies that are unique to Chinese marketplaces that Western brands should be aware of. In a recent webinar, our China marketplaces team shared their expertise on:

• The three categories of omni-channel marketplaces in China
• Strategies for major shopping events like 6/18 and Singles’ Day
• The ecommerce equation for success in China

Watch the full webinar below, or read on for a helpful summary.

‍

China omni-channel marketplaces

There are three main categories of ecommerce marketplaces in China:

1. Shelf-oriented: Think “Amazon” and you’re on the right track. These marketplaces focus on branded, digital shelves, like a search results page with all the products laid out in tiles. Brands present product images and descriptions, and compete for placement on the first page of the digital shelf. Mature brands looking for high volume sales generally target shelf-oriented marketplaces like Tmall, Alibaba, and JD.com.

2. Content-oriented: Marketplaces that focus on content are using live streaming and video sales models. Influencers stream and demonstrate products, unbox goods, and interact with live audiences via chat. Platforms like Little Red Book and Douyin (the Chinese TikTok) also appeal to global users, not just Chinese consumers.

3. O2O: “Online to offline” marketplaces drive consumers to brick-and-mortar retail through instant shopping and in-store pickup. Tmall Supermarket is a good example, and it appeals to customers who don’t want to wait for shipping on items like food, paper products, or other household goods. Supermarkets, cafes, and restaurants use this model to offer coupons and promotions for in-store redemption.

As you can see, there are nuances to the way Chinese shoppers are engaging with online commerce. Brand leaders need a different strategy to succeed in China, and it may require new marketing strategies and selling models. A trustworthy, experienced trade partner can help brands adapt their approach as they look for expansion and growth in China.

Sales events for Chinese online marketplaces

Online shoppers love a promotional sale; while Americans scramble for deals on Black Friday or Prime Day, Chinese consumers make big purchases on Singles’ Day/Double 11 (11/11) and 6/18 (held June 18th and commonly written 618 in China). All channels will participate in these national shopping holidays, not just ecommerce sites.

Here are some trends for 618 that brands should plan for if they’re looking to grow in China:

• Pre-sales: Many Chinese marketplaces used to run pre-sales, where consumers could add items to their carts in advance and still get promotions and discounts. This trend seems to be fading in favor of on-the-spot flash deals.
• Pricing: Chinese consumers are increasingly favoring high-quality goods, and brands must be prepared to compete on price. They should also ensure pricing is consistent across marketplaces and offline channels.
• Diverse ecosystems: Marketplaces are using their associated social media platforms to drive traffic to their ecommerce sites (e.g., JD.com using WeChat live streams to direct consumers to their ecommerce arm).
• Omni-channel marketing: Brands are coordinating closely with offline retailers to offer the same deals, promotions, and marketing messaging customers will see on marketplaces.
• Content-driven: Live streaming is king, with a number of brands using influencers and key opinion leaders (KOLs) to speak to consumers. One fun example: a number of brand CEOs appeared on influencer live streams to answer questions, demonstrate products, and build consumer confidence.
• Cooperation: This year’s 618 saw a lot of cross-platform cooperation, with other marketplaces being allowed to promote their 618 deals on WeChat despite its JD.com relationship.

Brands looking to compete in the dynamic world of Chinese ecommerce need to be prepared for these nuances in order to grow. They must be able to rely on a trade partner to plan for major sales holidays, engage in localized marketing strategies, and work across platforms to achieve the right balance of revenue and profit.

The ecommerce equation

Pattern believes ecommerce success comes down to a surprisingly simple equation:

Revenue = traffic x conversion x price x availability. How do each of these elements apply to China ecommerce? Here are key questions to consider.

Traffic: Are you finding and reaching the right audience? Are your product listings optimized for Chinese consumers? Have you earned any marketplace badges or prominent placements? Are you thinking about offline channels, too?

Conversion: Have you created high-quality listings that engender trust? Are you speaking to the audience in a culturally relevant way? Have you focused on good customer experiences? Have you partnered with the right influencers or KOLs?

Price: Have you set up a global MAP (minimum advertised price) policy to protect your brand’s reputation? Are you making sure offline/online prices are consistent for your customers? Are you tackling unauthorized sellers?

Availability: Do you have the right forecasting capabilities? Will your products be in-stock and reach customers quickly? If you’re selling a consumable product, are all your ingredients whitelisted for import to China? Will you be able to meet demand and avoid delisting?

Key takeaways

Successful selling in China requires time, data, and great relationships. Whether you’re embracing social selling, aiming for big numbers during a promotional holiday, or working to combat unauthorized sellers, you need help. A trustworthy and transparent China trade partner can help you overcome roadblocks and achieve continued growth.

Learn how Pattern can help you reach a new world of opportunities in China. Get in touch with our team.

‍