Ecommerce has come a long way in China in a decade, and Chinese online shoppers should be considered among the most sophisticated in the world. In this blog we outline the opportunity for US brands who are looking to expand into China and grow their sales in one of the world’s largest international markets.
China’s growing economy provides a huge opportunity for brands looking to expand into new markets, and shows no signs of slowing down. In fact, online sales of consumer goods rose by 14.8% in 2020 according to official figures, now making up about one-quarter of total retail sales. With a rising population who are accustomed to shopping online, even the Chinese government has put in place plans to target further GDP growth of more than 6% in 2021.
Chinese ecommerce is dominated by three big players Alibaba–which runs Tmall, Tmall Global, and Taobao–JD.com, and newer entrant Pinduoduo. In addition to this, smaller specialist marketplaces have sprung up to be expert in particular product categories, and larger brands tend to have a Chinese direct-to-consumer site as well.
Boasting 779 million annual active consumers in China in 2020 alone, Tmall–owned by parent company Alibaba–has been able to retain the top position for share of Chinese ecommerce sales with its constant focus on innovation and improvement. With circa 60% market share in China, the marketplace acts as a first port of call when searching for products and product content.
The domestic and cross-border versions of Tmall are both available to Western brands. Those with a business entity in China can use the domestic version of the marketplace. Those without a local entity are encouraged to use Tmall Global and trade cross-border.
At the height of pandemic lockdowns across the globe last year, many brands rethought their ecommerce approach and turned to China, a resilient market post-coronavirus and a driver of global consumption. Tmall has worked hard to add brands and merchants to the cross-border platform as a pull for more users, and during 2020 the number of brands trading on the platform increased by 60%.
To support this growth, Alibaba has created several initiatives to help brands pick up the pace of digital transformation in the market. Alibaba has created warehousing in Western markets so brands trading cross-border can store their product at home–and Tmall exports the product to China when the order is placed. For new brands starting out, this can be cheaper than arranging warehousing for cross-border orders in Hong Kong, and will also likely mean orders are received more quickly than if the brand is shipping orders from its home market to Chinese consumers itself.
China’s scale and willingness to embrace online shopping makes it an attractive market to expand to for USA and UK brands. While this is true, there can also be reasons why this market may be difficult to crack. Entering China requires significant investment in brand awareness and acquisition marketing, as well as a willingness to take a longer-term view on breaking even.
In our upcoming webinar, we’ll discuss key components to prepare for branching into the China market, launching onto Tmall, marketing techniques on both Tmall and other external drivers, trading and marketing KPIs, and finding the right trade partner.
Throughout the webinar there will be opportunities to ask any questions you have regarding growing your business in the China market, launching on Tmall, and other questions around going international.
To learn more, Register Now for our webinar: Accelerate Your International Presence–China, or request a demo and get started today.
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.