Not quite a month we woke up with the news that two technological giants had joined forces in creating an alliance with huge chance of success. The alliance between Ingenico Group and Alipay is focused on payments innovation as part of a wider international push, but is also a recent demonstration of the growing momentum of Chinese companies in Europe.
The alliance is based in European mobile payments
Ingenico Group is a french company specialized in designing a wide range of payment solutions, whatever the sales channel or payment method is chosen, according to three main needs that merchants and consumer ask: a secure, easy and seamless experience.
In recent years, China has created a vast and well integrated digital ecosystem in which highlights Alipay– a Chinese equivalent to PayPallaunch by Alibaba– which is already China’s leading third-party online payment solution with no transaction fees. The company already has more than 400,000,000 active Users.
Although there are many reasons behind this alliance, the clear purpose was to tap into the huge Chinese tourist flow in Europe. As we wrote in our previous article “How to Acquire Chinese Tourists through Digital Marketing“, the Chinese tourism consumption is already estimated to be the highest in the World. Moreover, Chinese tourism market will keep growing even faster: in year 2019, estimations says that consumption will reach US 264 billion dollars.
The motivation to exploit the partnership is shared: on the one hand, Europe has become the major vacation destination by a sector of the population with high standard of living; on the other hand, Alipay seeks to exploit the existence of more than 120 million Chinese tourists arriving in Europe every year and an approximately cost of $ 875 on average, while offering a payment experience nearest to their day to day.
Chinese tourists in Europe will be able to pay via Alipay App at any store that uses the Ingenico solution
The announcement not only underscores the growing relationship in business between two increasingly interconnected areas, but also the enormous benefits that such collaboration can mean to both. With such a perspective, it is not surprising the happy ending. As Philippe Lazare, Chief Executive Officer of Ingenico Group said,
“We are very excited to partner with Alipay and contribute our unique omni-channel expertise, products and services to help them optimize the user experience and boost sales all over the world. Their choice for Ingenico is a tribute to our high success rate and ability to meet even the most demanding customers’ requirements.”
Chinese tourists are accustomed to using electronic payment methods, an innovation that fails to catch on among European citizens. Presumably, this cultural difference has become a barrier that discourages expenditure among Chinese tourists. As Jacques Behr, Ingenico’s executive vice-president for Europe and Africa said,
“Payment becomes a friction for business so we are removing this friction by allowing the retailers to capture sales to the Chinese tourist population.”
The measure therefore seeks to stimulate Chinese people expenditure in their major holiday destination, but also tries to take advantage of the huge market Alipay already has in China: more than 450 million users liable to become target audience, and a market share in mobile payments in China higher than 80%. As they themselves spelled out,
“We are building international business step by step. There is much still to do with our customer base, and is still expanding.”
Such collaboration not only benefits the Chinese people, but also means a qualitative leap in technological enjoyment for Europeans. The alliance seeks to provide to European online retailers and to customers the possibility to pay and accept payments through Alipay´s eWallet through some marketplaces. An excellent way to boost e-commerce and sales in China and Europe.
Although the operation has already begun, both companies estimate that Alipay won’t be fully operational in Europe yet.
Just to start
While Alipay makes its movements, the rest of the world watches. Only companies that have a deep understanding of Chinese market can cope with the changes that are to come.
In search of accurate and personalized information to your sector and business?
Some months ago, we identified some Insights on ZARA in the Chinese digital market that came to underline its first steps on Chinese Ecommerce and the main reasons which led the company to choose Tmall as its official flagship store.
Zara´s stay in China began ten years ago and would not be long before the Management decided to set up its own online shopping website The Zara China and publish an M-shop called Zara.
What has been the result of the policy undertaken in recent years?
The unstoppable rise of Zara
After its landing in Shanghai, Zara currently counts with 182 stores in China. The brand is undergoing a process of rapid expansion, but gradual: after settling in major cities, continues to expand its business model in medium-sized cities –Second and Third Tier cities-.
The expansion of Zara in China occurs while increasing its international presence; the company is already present in 90 countries with a network of 2.170 stores…and there are still much more worlds to conquer.
In a curious twist of fate, while Zara undertakes an ambitious international growth -focused on Asia-, some others Chinese counterparts are the ones which starts their landing in Europe. It is especially noteworthy the case of Chinese Mulaya. Born in a spirit reminiscent of Zara, it advances rapidly in the West as a flagship Chinese in women’s clothing.
Ten years to become one of the 10 most recognized brands by Generations Y & Z
It would be this August when the Chinese RTG Consulting launched its latest study 2016 RTG Brand Relevance Report. The Report comes to underline the relevance that some brands reach between so-called Generation Y and Generation Z in China, their consumer behavior and lifestyles.
Surrounded by Chinese –Xiaomi, AliPay, Wechat, Taobao- and some others well-known international brands –Apple, Adidas, Nike, Uniqlo, H&M, Converse, New Balance-, Zara has entered into the Top 10, after becoming the sixth Most Recognized brand in China for the generation under 36 years.
But results are better for the Spanish company when we dive into Clothing brands. If we look at the survey results, we find that young Chinese place Zara as the second most-recognized brand in their industry, just behind Adidas.
China is already the second most important market thanks to ECOMMERCE
Its huge success in China is due to the combination of three main factors we describe below more in detailed:
- Zara offers a constant renewal and an affordable luxury as concept.
- Zara decided to start playing at the Chinese ecommerce scene by the hand of Tmall.com, instead of trying to build its own infrastructure to cover the entire Chinese market.
- Its Electronic commerce policy not only supports the growth of its own Digital industry, but also the Company growth as a whole: it has become a safe way to promote the brand in places where physical presence does not yet exist.
After going through critical situations in its implementation process in China, the company has adapted to the specific conditions of the market to which it is addressed. Zara not only has understood that nowadays, any approach to the Chinese territory must have a policy consistent with the preferences of the target population and be brave and fast to react to local consumer tastes, but also that Ecommerce has become the board in which the battle occurs, an step into future and the key that makes the difference.
All we can we do for you
Inevitably, the present is already future and both are settle on the virtual world. Knowing the ins and outs of the digital industry, take advantage of Ecommerce for the growth of our business and not give up a proactive marketing policy are the keys for successful development in the country.
In the company, we have the experience of an expert team. We are used to deal with the constraints of the Chinese market and we seize opportunities.
Let us team together. Visit us in 2 Open.
Nutrexpa was not only one of the first Western companies operating in China in the early eighties, but also a perfect example to explain the hurdles that any company faces in its landing to China.
Nutrexpa paved the way and others followed its footsteps. Its story is an example of tenacity and adaptability to a country that was not what it is today. Many of its experiences are likely to be applied to any company that considers China.
Find the proper battle buddy. Be aware of market dynamics!
In the early eighties, it was impossible to land in the country without the assistance of a local partner and the Chinese authorities.
After over three years of negotiations between the company and the local authorities, the emergence of a suitable local partner –Li Bank-, contributed to the establishment of an alliance, and the subsequent creation of a Joint-Venture.
A tip! This first stage requires flexibility and guangxi. Negotiations with local authorities and the Chinese bureaucracy are not always easy -although is improving every day! -, and finding a proper partner can be difficult.
Do not lose your patience and keep working on building a suitable partnership. It´s worthy!
Sometimes in China, your product will turn into another
After inaugurating in 1990 its factory in Tianjin, Nutrexpa would focus on prospecting of its target market, and also in adaptive demands that China demanded of its product. There, Nutrexpa started producing soluble and powder cocoa drinks.
Nutrexpa had all the ballots to fail on its arrival in China
The biggest pitfall were the eating habits: no milk or cocoa were consumed in China.
How to overcome such a hurdle?
– First, the company took advantage of an extrinsic condition: in the early nineties, the Chinese Government launched a powerful awareness campaign about the importance of milk intake in children. So, stay tuned! Opportunities come and leave!
–Second, Nutrexpa made a big effort to get a closer approach to the taste of their potential customers. To do so, they devised some specific tastes to their products: strawberry, banana and vanilla. Adapt!
–Third, Nutrexpa invested huge amounts on nationwide coverage advertising campaigns –around € 10/12 million per year- , especially on television. This effort managed to position the brand as a product fully recognized in big cities but also among Tier 2 and Tier 3. Now replace TV and imagine the endless possibilities of digital marketing on advertising nowadays!
–And last but not least, the company decided to create a Chinese distinctive brand. It dropped its popular brand name –Cola Cao– to become GaoLeGao, whose literal meaning is tall and jolly.
Choosing GaoLeGao was a marketing tool by itself: the election of positive attributes in a children’s product, makes easier its choice to the detriment of other similar products.
Years later, the company would challenge itself over again with the introduction of Nocilla… in a country in which bread was not consumed.
An another tip! Adapt your products and services to the market. If the name of your brand, colors or labeling are inadequate, change them!
Also never forget registering the name of your brand in Chinese and in your own language! Product customization, labelling and marketing are crucial!
success is sometimes highly unexpected
Despite being widely accepted, the product never reached another audience than children. Neither GaoLeGao nor Nocilla were the most successful.
Surprisingly, Nutrexpa discovered that its Star-product in China was… Phoskitos! Its commercialization never fit in with major purposes of Nutrexpa; after almost thirty years, they took the decision of selling the company and leave China.
What can we learn from the experience of Nutrexpa in China?
When Nutrexpa came to China, there were no previous examples. Fortunately, we are in 2016 and your company has the advantage of landing in the country in the hands of an agency specialized in Chinese business development.
Visit us and boost your sales in this giant we call China!
In the first part of this article, we showed and identified 5 main points that differentiate a Chinese website from its western counterpart that we need to keep in mind in order to build a good one.
Let us summarize some of the main points addressed in the previous article:
- The style, design and structure are more complex and with much more information in opposition to the cleanness of the western websites
- Where to host your Chinese website is one of the first decisions to make. The most of the times we advise you to have a hosting in China. For that you will need a Chinese company to apply for an Internet Content Provider (ICP License)
- The Chinese Great Firewall blocks all websites that do not meet the content requirements that marks the Chinese government
- Your website needs to be ready to integrate with the main Chinese players. Google, Facebook and friends are banned in China; instead you will need to use the BATs (Baidu, Alibaba and Tencent).
After this little updating, we would like to further develop this post showing you 5 more crucial things to take in consideration when building a good Chinese website.
When building a chinese website, What else should I know?
6 – CHINA IS MOBILE. BE RESPONSIVE
Adapting our website to mobile is very important in any country, but in China is mandatory.
The Smartphone is, in many cases, the only way they have to access the Internet. Therefore Chinese users are much more familiar with the use of mobile devices. Keep in mind that almost the 50% of all Ecommerce transactions made in 2015 were done via mobile, compared to the also quite high 22% in the United States.
Don’t think any longer and start working on a nice mobile design… Mobile first!
7 – DOMAIN. WHICH ONE IS THE RIGHT OPTION FOR ME
In your approach to domains, three are the main options:
– Not that long ago, to have a .CN was a must. It was not possible to get it if you didn’t have a Chinese legal entity. This has changed over the time and now you can easily get a .cn domain, no matter where your company comes from, just providing a copy of your Company’s ID. As the Chinese international top level domain, your brand might be perceived as having a strong presence in China and might also bring some trust
– On the other hand, we have the .COM domain. Chinese Internet users are increasingly getting used to this domain. Major Ecommerce platforms like Tmall.com, JD.com or Sunning.com may bear much of the blame for this. It can be very good for foreign companies trying to sell their products in the Asian giant to have a .com domain as it might help to highlight the international feel of the brand
– .COM.CN is the ugly duckling in the middle still in use by many brands mixing the good things from the previous mentioned domains, but without reaching their full advantages. In any case it can also be a good solution.
Which language should I use?
Another point to think about is the language to be used. Does your brand have a Chinese name? Then you can also use its pinyin term. Pinyin is the romanization system for standard Chinese: Chinese search engines recognise the pinyin words in the URL and then link them to what they stand for in Chinese characters in order for the website not to lose coherence.
Don’t get crazy about the domain, they are usually not that expensive. So, in case you can afford it, try to get the three of them (.com, .cn and .com.cn), plus their pinyin variants and redirect them to the main one; depending on your strategy.
8 – CONTENT. DON’T GET LOST IN TRANSLATION
It is important to know very well your main target markets as the language will differ depending on it. It might be obvious to mention it, but it wouldn’t be the first time that a company’s target consumer is in Hong Kong, Taiwan or Macao and the language used for the website translation was simplified Chinese instead of traditional Chinese and the other way around. That is a major and silly mistake that takes a long time to revert.
I don’t want to mention either the fact that a Google translated web does not help at all, but I am doing it because I have seen too many. It is mandatory to let a professional team take care of the translations. In 2 Open we separate this process in three parts:
- Translation, interpreting the main message that the customer wants to transmit to the final customer, done by a marketing professional in our team
- External review, done by a professional translator outside the team
- Final review, done by another marketing professional in our team
You might not believe it, but in certain cases we still get minor complaints. This is because Chinese language can be interpreted in many different ways. Therefore translations are always a difficult point in the list.
Is Customization a mandatory requirement?
Let’s not forget about the Chinese cultural customization. Website localization embraces translating and localizing a site into different languages making sure all content (text, images and videos) is translated correctly in an accurate, cultural and technical manner.
As stated before when talking about content, we are also talking about images and videos. There are no written rules and it has similarities to the domain section we discussed above. There are brands like Nike or Zara that prefer to maintain their international feel using western models in their multimedia strategy. Many young Chinese users welcome this method, but not all of them. Depends on the strategy you want to follow.
9 – PAYMENT OPTIONS. CREDIT CARDS? NO, THANKS
In the previous post, we wrote about the BATs (Baidu, Alibaba and Tencent). In China, the online payments market is currently dominated by two of these two tech giants – Alibaba’s Alipay and Tencent’s WeChat payment with 49.2% and 20% market share respectively.
These companies try to increase their market share by adding more brands and merchants within their ecosystem; something that both companies effectively handle. Also cash is king, as cash on delivery holds a strong position. The fast and vast adoption of electronic payments via mobile is likely to counter this trend in due time.
It is actually China and not the US at the leading edge of the trends towards mobile payments technology. Just for putting an example, both WeChat and Alipay have long used the now famous QR codes to let Chinese netizens pay for purchases and transfer money. It seems they have jumped over some natural technological development processes. This kind of behaviours can be quite normal in undeveloped countries that start to grow very rapidly.
What happened is that they adopted the mobile payment technologies even before implementing some existing ones as a huge percentage of the Chinese population accesses the Internet via mobile devices.
Get ready to integrate Alipay in your website as first and mandatory option. And seeing how fast Tencent WeChat payment is growing, that would be your second natural option.
10 – SEO
Once your website is ready, you will need to submit it to Baidu creating a Baidu Webmaster Tools account (only available in Chinese). That way Baidu will be able to index the site properly and your great Chinese adventure starts!
Search engine optimization done in Baidu is not so very different as the one you could do for Google. Anyway, we would like to note a few differences I think you need to know:
– Meta description – unlike Google and Bing, Baidu still uses Meta descriptions as a ranking factor. Keyword targeted description match users’ queries and their demands, which would help with the click through rate (CTR).
– Indexation – Baidu’s web crawling bot, Baiduspider, is not as advanced as the one from Google. As a result, you will need to help Baiduspider to discover and index your pages in different ways. Without mentioning that you can go to sleep and wake up with huge traffic losses or de-indexed pages usually caused by a penalization. Be careful what you do!
– Link building – On Baidu, it is not about the quality of the publishers’ website, it is more about the unique relevancy of the content (as it relates to your content) and the quantity of links to your pages. Baidu penalizes duplicate content and it also disallows irrelevancy. Authority and quality of the publisher is not that important (for now). In short, the more the merrier as long as it is not duplicate.
– Baidu services – Baidu offers a lot of different products apart of Search; use them and leverage their integrated marketing power. The most useful are Baidu Zhidao (questions and answers service) and Baidu Baike (Wiki service), but there are tons of other services that might be helpful to increase brand awareness and for content creation.
As for the tracking, most people use Baidu Tongji and/or Google Analytics. Yes, you read it well; Google Analytics still works in China and it is the only Google service that still does. You will find many detractors, but for what we have seen there is no huge discrepancies between the data collected by both systems (usually not higher than 5%). And Google Analytics has more functionalities than Baidu Tongji.
It is also important to mention the typography. Chinese language is not easy to read due to the difficulty associated to its typography. With 40,000 characters, they are divided in strokes which amount can vary between 1 and 60. Therefore the font size should be at least 12px.
At 2 Open, we would be pleased to help you.Take the advantages the Chinese market offers.
With the cooperation of our Digital Marketing and Ecommerce Agency, China will be at your fingertips.
Do not hesitate to visit us We´d loved to hear from you!
This article has been edited by Paula Vicuña, from 2 Open.
China is an interesting country filled with peculiarities in the day-to-day life. Business culture is one of the many peculiarities that China has to offer. It is a country where business contacts play a more important role than in other countries, or should I say, a different role. For Chinese, it is crucial to have some “good friends” and with “good friends” I am referring to well-connected friends.
Chinese have one expression that refers to these types of relationships: “guanxi” (关系). “Guanxi” refers to all the personal influential networks that somebody has in the business field. It is the way they define the relationships they have and the networks in which they are involved. Chinese have a different point of view when it comes to “networking”, for them, the best contacts they have are the ones that they should be kept for themselves, they do not think it is appropriate to share this types of friends. Why should you trust somebody that you do not know?
Whether we like it or not, a “guanxi” is a fundamental part of the Chinese culture, especially for those who want to enter the Chinese market. It may end up being a huge barrier for those who are new to China and plan on developing their business here, however, if you have the proper references, multiple and unexpected opportunities can arise.
Now, with respect to Online Social Business Networking, there are many different ways in which one can get in touch with interested parties. LinkedIn is the most important one with around 6 million users in China, as a matter of fact; it is currently the largest business network worldwide. Despite the fact that it is not a Chinese social network, it is not blocked by the great Chinese firewall, nevertheless, there are other competitors that have to be considered if one intents to enter the Chinese market.
Apart from LinkedIn there are many other popular Chinese alternatives, here is a list of the most popular ones:
With more than 30 million users, it is the largest business social network in China. When it comes to the Chinese market it has more users that LinkedIn, it must be said that younger people use it more frequently. Most of people registered do not have much working experience. This is the main reason why is commonly used by companies to recruit younger people who just got their degrees.
It is the second largest in China with 20 million of users. This one is more similar to LinkedIn, which can be considered as a more professional alternative than Dajie. This social network is used for companies to find skilled professionals, it also makes is easier to find research and further specify the profile they are looking for.
It also has more users than LinkedIn in China, but in comparison with the other two, it is quite smaller (7million). This webpage is more oriented to professional managers or administrative works. As a result, the financial and investment sectors, as well as executives, more commonly use it.
In China, this one is smaller than LinkedIn, with just 5 million users. The main difference with respect to the rest is that you can get access to almost all the content without having to be registered. The most common use for this social network is recruitment. Most of the ads on this website are posted by job seekers and recruiters.
It is really small compared to the rest (1.2 million users). Although it does not have so many users, it is very well known from abroad and this one has an English version. Actually, the functionality is really similar to the one from Linkedin, and that is why it is very useful for the non-Chinese people.
All in all, it is important to remark the importance of networking in China. Many contracts and businesses are being agreed on depending on the contacts that people have (“guanxi”). So, if someone wants to succeed in the extremely competitive Chinese market it is necessary to get some “good friends” that might be able to help you and your business. Social business networking is a good place to start and can help you develop these relationships which will consequently further develop you business in China, however, if you want to jumpstart your business you should get in touch with 2Open. If you have any questions or require any information about our services, please do not hesitate in contacting us, our group of specialists will happily assist you.
This article was edited by Andres Arroyo Olson from 2Open.