Here we highlight 6 key festivals in 2018 on Tmall that your brands cannot miss, because they contribute to the growth of the platform, and also the merchants.
Have you ever tried to build a new overseas brand and fail in your attempt? In any approach to China, foreign brands often make some common mistakes when trying to sell their products in China mainland. Although such misconceptions are not exclusive to online environment, we will focus on those that particularly affect your approach to e-commerce in China. China is already the world’s first e-commerce market.
Are you going to miss its enormous potential?
First bug: China is mobile, and you better record it
It is not the first time we tell you this, and for sure it won´t be the last. As we mention before in our article “How to Take Advantage of the Latest Ecommerce Revolution?”, Ecommerce has been a great revolution for both companies and customers.
Nowadays, Chinese prefer to use their mobile devices rather than their laptops and according to the new trend, companies have already starting to adapt themselves to portable devices. Moreover, those companies using U-commerce are focused on improving the customer experience through customizing and navigation created in cooperation with the User.
Second bug: E-commerce may be an asset in your country, but in China is irreplaceable
We cannot fail to mention Frank Lavin, CEO of Export Now, when he says,
“In China, Ecommerce is the cake.”
This may mean that you will need to adapt your business to the new environment. Do not expect it to be China who suits you, this does not work this way.
Remember that whoever hits first, hits twice. Embrace e-commerce as the enabler of your business it is, and take advantage of the immense benefits that electronic commerce can bring to your company to start selling around the World!
Third bug: Social Media is there to stay. Register your account and start moving!
Not only around the 93% of the online searches in China are done in their own search engines –Have you ever heard Google does not work in China?– but also about a 68% of the customers take a look on the official Social Media account before buying.
Do not miss the opportunity to have a voice in that huge chicken coop is the network, start developing a tailored communication strategy for your brand and gain your piece of the cake!
Fourth bug: Domestic and lazy thinkers, or how the triumph from a day doesn’t make it daily
Do you think you will keep doing in China pretty much the same things you were doing before and as a result you will achieve success?
A basic rule you should never forget again is, no matter the experience and the many different markets in which you have entered before, is that new horizons always implies a new starting on your understanding of the target, so we definitely encourage you to start a market analysis.
Will your brand be competitive in China?
Do you offer something different regarding your competitors?
Is there a suitable market niche in the country ?
These and a thousand more questions require a prior discussion, keeping in mind that China should not be underestimated: the country enjoys some peculiarities you definitely must know before starting your landing.
We strongly recommend you seek assistance from professionals focused on the Chinese market, in order to enhance your chances of success in the country.
Fifth buf: Do not try to do everything by yourself, ask for advice
We are not tired of saying it, and will do so again: China is not a flat road. Do not try to embark on this mission unaccompanied, but pick very well with whom.
Look for complementary partners interested in joining forces, go to Government agencies dedicated to external actions and internationalization and definitely search for specialized agencies in the country to start outsourcing some tasks.
Already in search of a consulting expert in digital marketing and e-commerce? You have come to the right place.
Any approach to Chinese landscape ends falling into the same debate: Will China evolve or break over the next years?
Although experts do not agree (And neither do we!), in the team we believe it is important to name some of the most immediate challenges ahead for China.
Current challenges are also the challenges of the future
When we talk about China, no one agrees. The huge boost experienced by China in the last thirty years has not buried the doomsayers who year after year have sown doubts about the future of China. Faced with them there are some enthusiasts who proclaim that the next world leadership belongs to China. Who has the reason? Not everything is white, not everything is black. Both sides are right.
Reforms, Where to start? Ten points to keep in mind
China is characterized by the dynamism that has developed in recent years. In order to ensure the future growth of the country, Chinese authorities must address some issues of particular importance:
First, Local Government Debt:
Local and regional government debt have been a terrible headache for analysts. We would like to underline the explanation Nicholas Zhu, senior analyst at Moody’s, gave,
“For the local government direct debt, we believe the government is finding a handle by capping it at 16 trillion yuan ($2.45 trillion) overall and improving the structure by swapping some existing debt into bonds at lower cost and longer maturity.”
However, in recent times the central bank started to allow qualified individual investors to buy and sell the bonds through commercial banks.
Second, Reform State Companies:
The Government is attempting to reform the state-owned sector while continuing to maintain its currently control. To do this, some different attempts have been made, such as: mixed formulas, restructuring, mergers, open up protected service sectors to private and foreigners, them all focused on enhancing their competitiveness and autonomy on private-sector markets.
Third, Liberalize the Financial Sector:
Financial liberalization is a key in Chinese reform, and it is closely linked to the privatization phenomenon itself. Both reforms will be needed to maintain Chinese growth, and facilitate the creation of jobs and the reliably channels credit to companies. The success of economic reforms carried out, will be a determining point of stabilization or social destabilization, and are a sensitive issue in governmental action. As the country opens its doors further, as the former Australian ambassador to China, Geoff Raby said,
“Equally China will be more open to capital inflows.”
Investment in China is drived by Foreign Direct Investment, as a key which gives advantages to the supplier and also to the host. Moreover, is a thermometer of the future of the business, and China has already started to capitalize its benefits. At the same time, FDI depends on some key – factors:
- Capital Availability: China is already the world’s largest recipient of foreign capital.
- Competitiveness: Rests on the country’s capacity to develop its infrastructure, resource availability, productivity and workforce skills.
- Regulatory environment: A difficult legal doctrine and excessive regulation, have been a serious handicap for investment in China. Things are changing, but it is still far to be as it should be.
- Openness to trade –especially international one.
To achieve the Chinese structural goals, it is a necessary condition that the country’s growth rate is maintained over 5 years above 6.5%. Moreover, in China Dollar strength prevents avoid closing 2016 with deflation, and has contributed to high capital outflows in recent years.
Sixth, Chinese Demand for Hard Commodities:
A very important point to consider for countries that produce raw materials as iron, copper or aluminum. Its prices will drop sharply as long as its demand will go slower. This expectation is opposed to food, which will keep increasing due to the growth of Chinese middle class.
China´s export competitiveness are based on three main principles: low unit – labour costs and interested rated, and an undervalued yuan. Due to the paradigm shift, it is expected that China’s strength at this point has begun to crack; an opportunity for others countries after all!
Over the past five years, China has promoted with great vehemence its innovative sector. The technical, economic and human development are impressive, especially its efforts in Science & Technological graduates. According to Mckingsey Global Institute,
“China must generate two to three percentage points of annual GDP growth through innovation, broadly defined. If it does, innovation could contribute much of the $3 trillion to $5 trillion a year to GDP by 2025.”
China lives in a permanent Environmental crises: air and water pollution, deforestation and desertification, biodiversity, high rates of cancer and the growth of a middle-class who is adopting a Western –style consumer patterns have become a huge problem for future. China needs to change the course of its current model. Therefore, he has embraced renewable energy.
We cannot talk about Environment without mention Consumption. The sharp increase of in domestic consumer patterns and the Chinese middle-class prosperity, will need of a sustainable and growing consumer economy based on the need of big service sector reforms.
Companies must be ready. How to be competitive in China?
The rapid evolution of the world stage precludes long-term estimates. Having an updated database and the example of a specialized agency, is always a clear advantage in any approach to the market, but even more in China. It has never been enough for global business to know what is coming, but also knowing how to take advantage of every opportunity that arises in the market.
In search of a specialist Agency in the Chinese environment? Are you interested on Digital Marketing and Ecommerce?
How does Chinese Market work? How can companies promote themselves without Facebook and Google? How do people survive under huge competition there?
China is -still- a mystery for foreigners. The country means a huge cake, but before entering the market you will need to answer to this and other questions. To make it easier to you, in 2 Open we have taken a brief look of the Chinese market and done a list of the most basic tips you should consider before landing in China.
Gone wrong? It can go much worse
When many companies started their business in China for the first time, the things they used quite a lot in local made no sense in China.
Ebay is one of the biggest e-commerce platforms around the world and a perfect example to explain the experiences many foreign companies face in China. Due to its leadership, the company assumed that its landing in China would be no much different to that experienced in other countries, so in the beginning they refused to establish a partnership with JD.com. The company soon realized there were no more choice but to cooperate with them.
What are the most common problems that foreign companies face in Chinese territory?
Foreign enterprises in China often fall into the same shortcomings we analyze below. Let´s see:
First, Always try to show their high-end enterprise images
Foreign enterprises always show their best face: high-quality services, responsible attitude, respect to the customers… and so on. But in China, price is the key and can always be the KPI which attract the customers’ sight immediately.
Second, Focus on high-end target audiences but ignore the rapid growth of China
When companies like Blueberry entered China, they set the target group to those corporate users. As the earliest and past No.1 smart phone, Blueberry had already been famous in China. But within 7 years (2006-2013), they retreated from China and closed their Chinese official website.
When Huawei set off their business, what they did was to set the target audiences as all people who want smart phone. Since the average income of Chinese people is increasing, so that more and more can afford a smart-phone. Huawei was right about its strategy.
Third, Copy the promotion strategy directly to China
Many foreign companies would prefer to make a wonderful advertisement, an amazing poster and advertise in the subway stations, supermarkets… and everywhere. But they always find out that the ROI is quite low, since they might only get 1 customer for a 100 RMB budget. Does it outweigh? We don´t think so.
In China, since the civil quality is still on a shallow level, what the customers care most is whether they are interested in, but not what is a good design. That is why when Taobao.com stepped out their first step, they even promoted on some illegal websites which had huge traffics every day.
Fourth, Think too much about customers but ignore what the customers are thinking about ICQ. The instant messaging software also failed in China!
The U.S. companies are always stricts on protecting the users’ privacy. With such a policy, users can’t find the chat record if they log in on another PC, since the software will not memorize or save these records in order to protect the privacy to the most degree.
Its counterpart in China, Ma Huateng, found out this fault which doesn’t fit the Chinese users’ requirement. In response he created QQ, which is based on the technology of ICQ and make this software become the most-used IMS in China.
Fifth, Rely too much on the Western promotion ways, companies do not want to do things directly
E-mail, Mail and SMS promotion require low budget and have huge audience quantity. Well, they do not make sense in China. For many Chinese people, it is absolutely offensive if they receive advertisement in these channels since they have watched and received too many advertisements already. Moreover, for most Chinese these all are considered private.
They don’t like to be bothered by anything they don’t even know. In China, what people prefer is face to face, no matter if it is for sales promotion or negotiation. The Chinese only trust the people in real life. That’s why when Zhou Hongyi took the responsibility of Yahoo China, he fired all employees who only did E-mail promotion but never visited the clients.
What should you do, then?
First, Pay attention to Chinese culture
Chinese culture is totally different comparing with the Western cultures. Different political systems, different History, different religious beliefs. Thus, the culture strike shows extremely seriously in China.
Your company should do its best to avoid the culture strike and assume their role. We suggest you yo have a look to Lancôme experience in China.
Second, Explore the Chinese consumer behaviour and preferences
Knowing the Chinese consumer behavior and their preferences make the difference. What are the KPIs to attract them? What they care the most? What they pay less attention to? What channels they prefer to get promotion information?
All these questions need to be taken into account when setting up the marketing strategy in China.
Third, Know the correct channels
Due to the firewall in China, many foreign websites (Google, YouTube, Facebook, Twitter, etc.) are not allowed in the China mainland. Thus, use Chinese sources.
Fourth, Speak that language
Chinese people still prefer to speak Chinese. So, when doing business with them, try Mandarin: it is always more than welcome.
There are still lots of thing we need to explore and learn about China. In search of an Ecommerce and Digital Marketing Agency?
This article has been edited by Paula Vicuña, from 2 Open.
A picture is worth a thousand words
After the great success achieved by our two articles 10 Things You Need To Know To Build a Chinese Website (I) (II), in the team we have thought it would be a good idea to summarize and turn them into an infographic.
We hope you enjoy it as much as we enjoyed its elaboration 🙂
Are you looking for a digital marketing and ecommerce agency?
Visit us. Let´s have a talk!
There are plenty of Social Media platforms in China: while a few achieve great success, many succumb to a highly competitive scenario.
Result of its dynamism, it is essential to keep attention on the changes that China faces in the digital world.
From 2 Open, we have prepared a brief introduction about Weibo´s current situation.
Our goal is to give you some tips to fully understand what is going on with one of the biggest Chinese Social Media.
Do not hesitate to contact us for a more thorough analysis!
Weibo is a Social Media platform to produce, share and find out Chinese-language content.
As a leading platform, provides an easy way to express in real time and interact with people and corporations.
Its importance is not only due to its capacity to be an official/unofficial news source, but also because it allows people to express themselves in a public way.
The doomsayers come into the picture
Currently, Alibaba is the biggest Chinese e-commerce company: it provides C2C, B2C and B2B sales services via web portals, plus electronic payment services, a shopping search engine and data-centric cloud computing services.
Three years ago, Alibaba bought 18% stock of Weibo. Since then, several media have speculated that Weibo or even Sina might be acquired by Alibaba in a short time.
Encouraged by the rise of Wechat, many marketers have predicted the fall of Weibo. Well, the latest Earnings report proves they were wrong.
Is Weibo on the way out? Let the Earnings speak the truth
According to official Earnings Report of 2016 Q2 from Sina Weibo, the Net profit of 25.9 million dollars (net revenues of $ 146.9 million) increased 516% compared to the same period last year.
Moreover, Weibo 2016 Q2 data shows the Total revenue of Weibo is 146.9 million, including 127.2 million revenue from Advertising business, value-added services $ 19.7 million for value-added services.
Let’s review the users’ data on Weibo now
Monthly Active Users –MAU- is 282 million, increase 33% compared to the same period of last year. In addition, Daily Active Users –DAU- is 126 million with 36% increase compared to same period of last year.
Is noteworthy that 89% of them are mobile users.
The progress is closely related to their own media advantage
Three years ago, relying on its social communication advantages, Weibo attracted $ 600 million of Alibaba, while became an effective channel for celebrity campaigns, events, marketing and other commercial activities.
After that, Weibo focused on the advertising model. At the end, it decided to put aside Alibaba and manage the business alone.
In 2016 Q1, advertising investment from small and medium enterprises increased 147%. The quantity of SME’s and self-service advertisers reached 830K with 25% increase compared to previous quarter.
In 2016 Q1, investment in small and medium advertising revenue grew 147%, the number of SMEs and self-service advertisers reached 830,000 and a 25% increase the previous quarter.
Why both SMEs and big brands value Weibo a lot?
Both leverage it as an important channel frequently, specially because:
- Increase of traffic and users with 282 million MAU
- Optimized Algorithm of Ad Platform
- Active Internet Celebrities
The outbreak of short videos
We should add that speaking of its development path, the outbreak of short videos is also a milestone of growth of Weibo.
According to the 2016 Q2 Earning report, the playback amount of short videos on Weibo has increased 200%.
Meanwhile, the Internet celebrity economy is rapidly booming. Based on short videos, live-streaming broadcast and e-commerce, Weibo occupies the core position of social media with its incredible social power.
Margin improvement for future
The operating leverage will keep being prominent in the future. Based on the non-GAAP, the operating Margin rate of Weibo was 23.6% in the second quarter.
It is expected that the Weibo´s operating Margin rate could reach 25.2% in the third quarter, 23.4% in 2016 financial year, and 28.7% in 2017 financial year.
After seven years, Weibo proves to the world its strength and influence.
Do you still think Weibo is on the way out?
Our Digital Marketing and Ecommerce Agency have the experience of a team dedicated to know in depth the Chinese Social Media.
If you are looking to push your sales in China, do not hesitate to contact us.
Moreover, if you are interested in receiving to your mail the latest trends of Chinese Social Media, please suscribe to our monthly Newsletter!
This article has been edited by Paula Vicuña, from 2 Open.
All of us are very well aware of the magnitude of the Chinese online market and, although it is currently the largest Ecommerce market in the world, it is also the most changeable one.
From 2 Open, we want to enable your approach to China giving you some practical guidelines about the current state of Ecommerce in China.
Understanding what is happening in China needs time and a constant willingness to learn: sometimes its fast evolution makes it hard to follow the new trends, other times foreigners just find an incomplete analysis.
According to the analysis report done by Data Center of China Internet -from now on DCCI-, China has currently taken the first place as the greatest E-commerce country in the world, while the online shopping penetration rate of China is in the second place after United States.
The result of China E-commerce indicates the Chinese economic keystone in recent years, also their development trend of commerce in the future.
As a result, in 2 Open we strongly believe there are more opportunities in the future for E-commerce development.
There are a range of factors we should take into consideration in our approach to the country:
E-commerce market is booming, due to the existence of multiple factors which stimulate the development
In 2015 in China, penetration rate of online shopping reached to 56%. This means there is a huge space to further development comparing with the most-developed countries, and a great opportunity to companies coming to China.
Although there are many factors which are promoting the trend, the main reasons can be summarized in a set of main points:
- Population: Until June 2015, China has 668 million netizens, 594 million mobile phone users and 374 million online shoppers. This leads us to a great size of online shoppers and a strong demand in domestic market.
- Policy: China and its Government have adapted many strategies and measures to promote the E-commerce development. It is a fact that the confluence of two forces have achieved incredible results in recent times.
- Technology: The mature E-commerce relating technologies facilitates the promotion of various industries, especially those related to the Big Data, Internet security, Online payment and Mobile technology. A niche market that is worthy.
- Enterprise: Internet companies have finally joined and distribute to the whole industry, so the result has been that most of the traditional E-commerce companies are transforming to the New Model. Thanks to it, the industry chains of BAT (Baidu, Alibaba, Tencent) cover a large area in China and it is expected to keep growing in future.
- Ecological Integration: The whole industry is getting into a mixture between online and offline industry. Take a look to Alibabas example: they have relied on the industry chain of E-commerce to integrate video, games, travel, finance and other fields into a complete unity. That is the future!
- Basic Infrastructure: Internet infrastructure develops rapidly, especially the Mobile Internet. But also 4G is changing the scene: in the end of July 2015, China 4G accumulated more than 250 million users and 4G base stations were over 1.53 million, of which the construction of TD-LTE base stations were over 1 million. Nowadays, 4G smart phone has already accounted for 82.7% of the domestic smartphone market and seems there is still a gap to fill.
Accommodating to the human-oriented strategy, the E-commerce marketing gets a standout result
With the diversification of E-commerce, the elements influence on the marketing result also became complicated, thus the marketing KPIs should be clear for the marketing themes and goals.
E-commerce marketing has changed from past into a new model of advertising, which is accommodated to the Internet users.
The Model of procedural purchase facilitates the result of advertising, optimizing the convention, and achieves 3 times of ROI:
- The user is the focus: Advertisement position of E-commerce marketing is transforming into human-oriented.
- Procedural purchase is pushing E-commerce marketing into OTG (On-The-Go) model.
Rapid growth of mobile terminal and Big Data brings more commercial values
Now in China Ecommerce market, users, marketing and advertisement investors are in favor of mobile terminal. With the development of mobile technology, the traditional business was greatly impacted.
¿The result? Big Data sharing connects user, product and service together; each data channel communicate with others can release a higher-value data stream.
Vigorously develop of the “festival event”
In recent years, the festival promotion has become an important way of arresting customers. Since November 2011, it has already turned into a battle for the Chinese leading E-commerce companies.
But also the advantage of big data sharing and innovated technology did a tremendous support in the precise marketing and advertisement.
Take Tmall as an example: in 2015, the turnover of Tmall reached ¥57.1 billion just in one day. A huge amount that can still increase.
The tremendous transformation that China lives, cannot be understood without experiencing it by firsthand.
From 2 Open, we have a global perspective and the expertise any company thinking on coming to China needs to develop its business in the country.
If you are looking to take advantage of Chinese Ecommerce, we will be happy to help you.
This article has been edited by Paula Vicuña, from 2 Open
Are you looking for the latest news of Tech innovation in China?
The goal of this article is to shed some lights of why Penguin Intelligence is a work-tool to keep in mind on your approach to China.
Penguin Intelligence is the official data platform from Tencent Technology
Tencent Research Organization works such as a professional organization which publishes in-depth reports about the Chinese mobile ecosystem.
Penguin Intelligence performs research and advocacy concerning hot-topics. It also studies markets, trends and best emerging practices.
Their work is founded on a rigorous thorough understanding of every Industry Focus, Sector Dynamics, Case Studies, Data Analysis and Macro environment.
Penguin Intelligence is constantly optimizing the analytical model
Penguin Intelligence is your best choice if you want to figure out what is happening in Chinese Internet Industry. Unfortunately, their business analysis and reports are only available in Chinese for the moment.
Penguin Intelligence also counts with three original sub-columns:
- Penguin Investigation
- Penguin Analysis
- Penguin Portfolio
In addition, Penguin Intelligence includes an Open Platform, which is a huge cohesion of all wisdom from China technological business.
What will you find in Penguin Intelligence?
As we have mention above, Penguin Intelligence contains a full variety of reports, infographics and data.
There are more than thirty valuable Business research reports, hundreds of in-depth analysis reports that have been already published and the Platform keeps growing every day.
The influence of these reports / studies has touched up multiple areas of Internet and traditional industries.
Due to its importance, Penguin Intelligence currently enjoys high reputation and credibility in Governments and Enterprises.
To illustrate the kind of searches which can be done, from 2 OPEN we have compiled a brief list of some of the most striking examples that you can find on the Platform:
- In-depth reports and fresh data about Tencent ecosystem; WeChat public accounts: What type of articles get the most attention from readers?
- Many infographics and graphs about mobile ecosystem in China; iPhoneS sales in China
- Data about digital marketing customer behavior; Do customers prefer hongbao or discounts?
Relying on Tencent, Penguin Intelligence contains a large user base and massive data advantage of products in multiple fields:
- Social networking application: WeChat (Most-used application in China)
- Social networking service: Qzone, Tencent microblog, Tencent Video
- Instant messengers: QQ, QQ International
- Online payment system: TenPay (which is similar to Paypal)
- Cloud storage service: Tencent Weiyun
- Own search engine: Soso.com
- Media player: QQ player, QQ Music, KuGou Music, KuWo Music
- C2C auction site: paipai.com (now merged with JD.com)
The huge scale of Tencent Data is the cornerstone of Penguin Intelligence ability to mine and analyze data, and serving professional market insights and industry reports.
Do you want to discover a little more of Penguin Intelligence?
Do not forget to subscribe to our Newsletter to receive some special information about China!
This article has been edited by Paula Vicuña from 2 Open.