Tackling China—the World's Most Lucrative Ecommerce Market

Emilee Valken

July 24, 2020

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.

Why China?

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.

China Ecommerce Logistics Specialists, GMV | Pattern

“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.

China Ecommerce Growth on Tmall During 2020 | Pattern

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.”

Alibaba Marketplace Growth in China Ecommerce | Pattern

Things to know about China

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.

The Chinese concept of face

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.

Customer service and delivery

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.

Customer Service and China Ecommerce Trade Partner Team | Pattern

“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.

Sales holidays in China

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.

Standing out in China

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.

Marketing in China on Ecommerce | Pattern

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.

4 things to consider in a China ecommerce trade partner

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:

  1. Make sure you have access to data.
  2. Get someone with category and localized market expertise.
  3. Make sure they have on-platform and off-platform channel capabilities.
  4. Find experts in evaluating your product category ecosystem.

China ecommerce partner evaluation process | Pattern

Next steps

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.

China Ecommerce Data Trade Partner | Pattern

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Sept 27, 2022

Global Ecommerce Weekly News: 27th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon drives renewable energy push with 71 new projects Amazon is planning to add 2.7 gigawatts of clean energy capacity through a couple of new projects as the company attempts to use 100% renewable energy by 2025. The ecommerce business will soon have a total of 329 renewable energy projects, generating 50,000 gigawatt hours of clean energy, which is equivalent to powering 4.6 million US homes every year. [Read more on Reuters](https://www.reuters.com/business/sustainable-business/amazon-drives-renewable-energy-push-with-71-new-projects-2022-09-21/) Amazon launches Prime Early Access Sale Amazon is launching a new 2-day shopping event for its Prime members only, beginning on the 11th of October. Across 15 countries, Prime customers will have access to the shopping event, with thousands of deals on offer globall, ranging from fashion to electronics to essentials. The event has the purpose of giving Prime users the chance to spread the cost of items over the winter months, 6 weeks ahead of Black Friday. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/26/prime-early-access-sale/) --- Other Marketplace News --- Shopify unveils new localisation tool Shopify is launching a new localisation tool, called Translate & Adapt, which works with Shopify Markets to offer localisation for sellers who are looking to expand into new markets. The tool translates a user’s online store into different languages, including product pages and information pages. Merchants are also able to create different shipping terms for each market using the new tool, which allows international expansion and offers a more localised consumer experience, unveiling new potential. [Read more on Ecommerce News](https://ecommercenews.eu/shopify-launches-new-localisation-tool/) Etsy is set to invest hundreds of millions into its marketing platform Etsy CEO claims that the company is on route to spend more than $570 million USD on marketing this year. Even during a time of macroeconomic pressure, inflation and rising interest rates, the company is preparing itself and its sellers for the upcoming holiday season and is focused on retaining interest from buyers. [Read more on Yahoo News](https://uk.news.yahoo.com/etsy-600-million-on-marketing-ceo-154054219.html) --- Other Ecommerce News --- Meta looks to cut costs by 10% in the coming months Meta employees are facing job redundancies as the company plans to cut its costs by 10% over the next few months. Meta reported a 22% YoY increase in costs and expenses, totalling over $20 billion USD. The cuts are expected to come in the form of job redundancies as a result of department reorganisations rather than formal layoffs. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/22/meta-to-slash-costs-by-10-over-coming-months/) DHL teams up with Quadient to offer smart locker deliveries in the UK DHL and tech company, Quadient, have partnered to offer smart lockers parcel pick-up throughout the UK. The new contactless, secure locker stations will give recipients more choice and flexibility to receive their parcels at a time and location best suited to them. The partnership plans to install 500 locker stations across the country by the end of 2022. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/21/dhl-partners-with-quadient-to-offer-smart-locker-delivery/) The online fashion market is set to be worth nearly $170 billion USD in 2025 The European online fashion retail market is set to grow 50% by 2025, with an online turnover of $170 billion USD, which is 33% of the retail branch’s total. Cross-border marketplaces prove to be the largest drivers of this growth, with online websites and apps like Vinted largely pushing the market’s online growth. Zalando recently became the largest cross-border fashion retailer/marketplace, responsible for 11.7% of the online market’s share. [Read more on Ecommerce News](https://ecommercenews.eu/online-fashion-market-worth-e175-billion-in-2025/)
Sept 22, 2022

How an Amazon SEO Agency Should Be Serving Your Brand

If you’re in the global ecommerce space, you are most likely aware of Amazon, and probably selling your products on the marketplace. With over $470 billion in sales in 2021 alone, Amazon stands as the third largest company in the world based on revenue. The ecommerce giant is a household name in the U.S. and working hard to grow its market share across five continents worldwide.

Having your products available on Amazon and being competitive there, though, are definitely two different things. If you want to really succeed on Amazon, you’ll need specialized insight into how Amazon works and how to make it work for you. So, for many brands, it’s a great idea to work with an Amazon Search Engine Optimization (SEO) agency.

At Pattern, Amazon SEO optimization service is one of our key competencies. We understand that technology, data-driven insights and expertise  are the most important tools brands can leverage to win top listing spots on digital marketplaces. With expert teams and years of experience, we help brands conquer the Profitability Death Spiral as they compete with other products and sellers online. We offer Amazon SEO agency services as a core solution to brands that need more resources to get ahead. 

What is an Amazon SEO Agency?

An Amazon SEO agency serves brands by improving their products’ rank and listing performance on Amazon. They make strategic decisions about ad spending and placement that lead to higher traffic, conversions, and revenue for ecommerce brands.

A great Amazon SEO Agency partner will:

Prioritize Your Success

Unfortunately, many Amazon SEO agencies profit in unfair ways from your brands’ perceived success based on the ROAS numbers they provide. This is done through including branded search terms in ROAS reports, which naturally skew listing performance

Let’s say, for instance, your brand is called “Annie’s” and you sell lollipops. Your brand has a very high likelihood of winning the top listing spots on Amazon for lollipop search terms that are paired with “Annie’s,” your brand name. So, SEO agencies will spend your ad money on those terms and report a very high ROAS. 

To avoid scenarios like these, it’s best to look for an agency that either calculates their profits on metrics other than your ROAS scores or weighs branded search terms differently in the performance metrics reports. Regardless of your Amazon SEO agency’s cost structure, you should align onbranded search terms before committing to a scope of work.

Provide Detailed Competitive Insight

A great indicator of a high-quality Amazon SEO agency is the level of insight they can provide into your competitors’ listing positioning and how it compares to yours. Data fanaticism is so important at Pattern that we’ve developed proprietary technology to display this exact information with precise detail for every brand we work with. In fact, you can find our free version here to see how you compare to some of your top competitors based on ASIN.

It’s certainly possible to improve your Amazon search performance with blind spending strategies. But a truly great solution will help you to know where your dollars are at their most powerful and competitive.

Reduce Your Ad Spend Over Time

Amazon’s A10 algorithm prioritizes customer satisfaction—it wants to show consumers the best products that align with their search intent to improve conversions and sales. So, the best way to gain momentum on Amazon is to work on incremental wins. 

Improving your performance on more obscure search terms that align with your customers’ search intent is a great way to increase ROAS for the long term. A10 will reward your success with better rankings on higher-volume search terms and the virtuous cycle can help you conquer your most-coveted listing spots. And the best part? This process of gaining momentum, if done right, will naturally decrease your ad spend over time as Amazon recognizes your value and works with you to keep your products at the top of consumers’ search results.

Amazon SEO Optimization and More

As an Amazon SEO specialist, Pattern knows how to help your brand win better success for long-term profitability on Amazon. With our data-driven tools and brilliant teams of ecommerce experts, we help brands with listing management, content optimization, Amazon ad strategies, and more.

Contact us to learn more about our SEO optimization services.

Sept 20, 2022

4 Ecommerce Marketplace Consultant Must-Haves

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. 

What is an Ecommerce Consultant?

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.

1. Brand Obsession/Specialization/Passion

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. 

2. Proven Results

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.

3. Wide Range of Marketplace Expertise

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.

4. Network of Resources

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.

Achieve Your Ecommerce Goals With Pattern

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.