Weibo social media crisis learning from Sesderma in China
With almost 400 million monthly active users by the end of 2017 on Weibo, without a doubt, every foreigner brand would consider Weibo as an important social media channel to build up awareness in China. We can imagine if one brand could appear on the top search topics, it may be because they have successfully created a big issue, but on the other hand, the popularity maybe also comes from unexpected negative feedbacks which a small issue could turn into a serious PR disaster in the blink.
We can always learn from other’s case and prepare tailored social media crisis management for our own brand in advance, and this time we learn from Sesderma’s experience.
Sesderma hit No.27 on the Weibo top search topics
On the daily social media monitoring, we found that Sesderma, the well-known Spanish dermocosmetics brand was on the hot search list on Weibo, but they were dealing with the crisis out of a careless mistake in China. Their account has more than 7,000 fans, but the brand name search volume was 14 times more, we can assume the negative news brought in lots of people who aren’t familiar with the brand Sesderma before. What caused the PR crisis exactly? Let’s get back to where the issue started.
2/17 12 pm: Sesderma’s controversial post
Their intention was to educate the fans how to apply their product for a better result and created the post in a soft and self-deprecating way, but the critical part is they said “you” are poor and “you” don’t have money, so they misled the perspective and turned out to discriminate against the fans. Unfortunately, since then, the post started to accumulate passive comments in a quick-speed.
2/18 6 am: One user posted the negative feedback about Sesderma’s post (share:2,865 / comments:514 / likes:3,477)Not only the improper content, but the way Sesderma managed the issue. The user found Sesderma directly deleted the original post and without responding to fans’ anger. The post just went viral afterward, and it easily pushed Sesderma on the hot search list on Weibo.
2/18 8 pm: Sesderma apologized sincerely to their fans
After waiting for more than one day, Sesderma had an official post to apology for their careless mistake. According to the comments, most of the fans could accept and left their support notes, but Sesderma continued to occupy the hot search topic position, until late afternoon on 2/20. Social media crisis comes easily, but it’s definitely hard to disappear.
3 takeaway to prepare crisis management on social media in China
1/Respond timely and as long as the mistake is confirmed, a sincere apology and open communication is needed
In many cases, actually, the crises are avoidable, if we can manage the potential crisis timely, and organize the crisis management team if necessary with members from involved departments, to create a open dialogue with fans within 24 horas.
2/Self-deprecating humor is easily taking over on social media, but extra care and attention for this kind of content is crucial
Sometimes self-deprecating humor is delicate, it’s better the content can be viewed and checked by different people to taste the respond. And keep the first person perspective clearly through whole content, as we can see in the Sesderma’s case, as long as you change the perspective, self-deprecating post could backfire quickly.
3/Chinese local team represents the foreign brand in China, so it’s important to work closely with headquarter to deliver the brand value
Even though many foreign brands have local subsidiary or agency to execute all the Chinese market marketing communications in China, but work integrally and have regular meeting is essential to keep both parts on the same track towards the ultimate success.
If you are interested in developing business in China through online marketing and e-commerce, 2 Open are glad to listen to you, please feel free to contact us by e-mail: INFO@2OPEN.BIZ, or just leave us a message below, we will get back to you as soon as possible.
Business Theory and Practice in China – Not what you’d expect
Have you ever asked somebody how to do something in China and gotten an unclear or contradictory answer? Worry no more my dear reader, getting to know things before actually doing them in China is extremely difficult, here is why!
Not all questions have a vague answer to them, we are mainly focusing on business related topics, to be more specific, new business models that are being implemented, for instance, WeChat account management, DSP advertising purchases, or cross-border e-commerce are among the main ones that seem to have a variety of answers to them.
Why? You might be wondering, well, these fields are fairly new and still need to mature a bit. This is the main reason why there is no general consensus yet, it basically comes down to who you are asking. A logistics company won’t give you the same answer as the Chinese Customs Administration, nor will an online e-commerce platform or a Chinese businessperson, everyone has a different perspective on the matter, finding out what works for you might be difficult.
In reality, nobody is 100% sure on how things should be done, in fact, it seems like everybody is experimenting with it. The information lacks, is unclear, or contradictory, so you ask yourself, what should I do in order to carry out my business in China?
Your first, and probably wisest option, would be to get in touch with 2 Open, we are used to deal with these types of problems all the time. Facing new challenges and pioneering is one our main strengths and we would be more than happy to help your business achieve its full potential.
Your second option would be to run a pilot test. Getting things right before actually starting is a smart thing to do. Try running some test orders and look at the problems that arise with its delivery process. This will not only give you the knowledge you need but will also let to know the experience you’ll be having later on. Even though this might not be as comfortable to do as it sounds, it certainly is the best way to go about it.
Apart form running this pilot test there is another important aspect you should keep in mind, that is trust. Uncertainty and risk taking are a part of these tests and having an honest trustworthy person on the other end is something that will help you solve any problems you might encounter. Trust issues within your working environment could harm the pace and results of your projects, this is something you might not want to take for granted.
All in all, trust is not enough, you also need to be patient, getting things right requires time and effort. Getting ahead of yourself without the knowledge required could costs you some precious time and money. Plan things ahead and gather all the information needed in order to succeed in the volatile Chinese market.
At 2 Open we have the experience and knowledge to develop your business in China. We not only know how solve problems but we also take that uncertainty on your behalf. Our team is passionate and enthusiastic about every project, our goal is to understand our clients business needs in order to provide the best possible services. 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.
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This article was edited by Andres Arroyo Olson from 2Open.
All you need to know about Ecommerce in China
The first quarter of 2016 is already behind us, are you still figuring out how to start your e-commerce business in China? For some of us e-commerce still feels like a new business model, however, China has long passed this stage, various data suggests that it has already become a traditional industry in China. Traditional or not, let us sort out the current e-commerce situation and forecast its areas of development.
Ecommerce is on its way to become a traditional industry in China
Ten years ago the ecommerce in China was brand new. Taobao was the most popular C2C online platform. At that time, people who had the technical skills and knowledge of search engines could get over 80% of return of investment on a Taobao shop. Nowadays, Taobao offers more than 1 billion products, has over 10 million sellers, and around 320 million active users. These huge numbers only come from one of Alibaba Group’s marketplace so you might be able to reckon the whole picture. After ten years high-speed development, China’s ecommerce is not a new industry anymore; its development is now as mature as the real estate or the catering industry.
Traditional industry vs Ecommerce
In recent years, the traditional industry has been strongly affected by the online market, some companies have managed to adapt their business to the new online scene, but some have failed at this task. This trend of transitioning from offline to online businesses will speed up this year, and although there are currently more traditional businesses than online ones, online businesses will eventually catch up.
It seems that both business models cannot co-exist, however, if the resourceful traditional industry would explore Chinese digital marketing and ecommerce solutions, they would be able to achieve better results with half the effort.
Develop a 020 (Online-to-Offline) business model
In coming years, online retailing will be a fully integrated part of the market, it will help companies grow, and sale more efficiently. On the other hand, they will also have to implement the offline part of it, a successful integration of a good O2O business will, without a doubt, thrive in market. Suning began handling deliveries for Alibaba, in order to push Tmall Supermarket into the massive market, and Jingdong is promoting Jingdong Daojia, all the actions from the leading Ecommerce companies indicate that the O2O model is inevitable to come.
Ecommerce in the rural areas
Last year ecommerce in rural areas had a rapid development. Alibaba made a long-term project to promote online shopping in order to expand its business coverage. The central government formally issued a document to help the promotion of rural ecommerce and facilitate the integration of online and offline. Alibaba, Jingdong and Suning are also pushing the development of ecommerce in rural areas so we should expect an huge increase this year.
Great development of CBEC (cross-border ecommerce)
Over the past 2 years, CBEC has become one of the most popular business models in China. It has given import business a lot of opportunities; moreover, since the Chinese middle class has grown considerably (first place in the world with over 100 million), it turns out to be a very profitable business. The main consumers are people between the ages of 30-40 and have great acceptance for foreign products, this will bring a lot of overseas ecommerce companies into the Chinese market.
Here at 2Open we specialize in ecommerce and digital marketing. Our goal is to understand our clients business needs in order to provide the best possible services. 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.
It’s official! Taxation reform will start on April 8
On March 24, 2016, the Ministry of Finance of the People’s Republic of China released an article on its website to finally put an end to the on-going rumours. Turns out that all the gossips were right all along, so brace yourselves because the taxation reform for imported retail products through cross-border e-commerce is coming.
According to the article approved by the State Council, starting on the 8th of April 2016, China will implement the import tax policy for cross-border e-commerce retail sales (business to consumer, or B2C), and also adjust the tax policy on personal postal articles.
Currently, items for personal use are considered to be personal postal articles, these types of items represent a reasonable number of cross-border imported goods and will be taxed according to the new tax policy on personal postal articles. The new personal postal article tax is targeted on non-trade imported goods; it combines tariffs, import VAT and consumption tax. Generally speaking, the tax rates of personal postal article tax will be lower than those of imported goods for trade.
Products for cross-border e-commerce retail sales are imported through postal channels and these work differently than the traditional trade of files and correspondences, this is the main reason why unfair competition exists between cross-border e-commerce retail imports and general trade imports within the same category. This is the main reason why cross-border e-commerce imported goods will be considered as merchandise and charged with tariffs, import VAT and consumption taxes.
As a response to consumer’s reasonable demand, the single transaction limit for cross-border e-commerce retail goods will be increased from 1000 RMB to 2000 RMB, furthermore, the annual limit will also be increased to 20000 RMB. For cross-border e-commerce retail goods within the 2000 RMB price limit the tariff will be 0% with an import VAT and consumption tax of 70 % of the current statutory tax. As for the goods that surpass the single transaction or annual limit, they will be charged with full taxation under the general trade model.
Taking into account current regulatory conditions, for the moment, only cross-border e-commerce retail imports that can successfully provide trading, payment, logistics and other related electronic information, will be taken under the scope of the new policy. Personal belongings and imported goods that are unable to provide related electronic information will remain subjects to current regulations. Meanwhile, to optimize the taxation structure, simplify customs declaration and tax payments, and improve customs clearance efficiently for passengers and customers, China will adjust tax policies on personal postal articles. The changes include a reduction from the current four tax items (tax rates: 10%, 20%, 30% and 50%) to three. Under the new policy, tax item 1 is mainly for commodity from MFN with zero tariffs; tax item 3 is mainly for high-end commodity with consumption tax; the rest will be subject to tax item 2. Tax rates for the three new tax items will be 15%, 30% and 60% respectively.
We will have to wait and see how this affects cross-border e-commerce in the following years. Any enquiries you may have about how to increase sales and manage a successful ecommerce business model do not hesitate in contacting us. Our group of specialist will be more than happy to assist you.
This article was edited by Andres Arroyo Olson from 2Open.
What you need to know about Cross-Border ecommerce for China
Nowadays cross-border ecommerce is in the rise in China. It seems to be a viable and legal way to import or export products into or out of China avoiding significant tariffs and quotas. Apart from the traditional model of cross-border ecommerce, that is, overseas online shopping, we have classified 4 specific operational models of cross-border ecommerce according to their different business schemes.
- Overseas online shopping
- Direct delivery platform
- Self-support B2C model
- Guide and rebate shopping model
1. Overseas online shopping
Overseas online shopping is perhaps the one that is most familiar to Chinese consumers. It is a sort of procurement service for people who want to buy the overseas products. Consumers purchase the products from foreign retailers or individuals on web pages or mobile apps, and then they get the product by transnational logistics. There are two major ways so accomplish this.
Online shopping platforms
One of the main points an online shopping platform has to do is to attract third-party sellers who meet the logistics requirements. Sellers settled in the platform usually have overseas purchasing power; they regularly purchase the specific product based on consumers’ needs and after the order is received from the customer they transport or mail the product directly to China. This is a typical example of a C2C model, the online platform profits from access fees, add-value services, and transaction fees imposed to the seller.
Representative platforms: G.TAOBAO.COM/JD WORLDWIDE/USASHOPCN.COM
“Moments” in Wechat is becoming a popular way for promoting products online. Although its warranty is mostly based on social relationships, fraud could also occur. With customs restrictions the service would be regarded as smuggling, so there still time to wait for the integration of it in the overseas online shopping environment.
2. Direct delivery platform
Direct delivery platform, also named “dropshipping”, is a model in which the ecommerce platform sends the order from the customer to the manufacturer or wholesale directly, then the latter delivers the product to the customer according to the information provided, it is important to notice that the product is sold with its retail price. Because the end-supplier is the brand vendor/factory, this model could be considered a B2C model. In this case, most of the profit for the direct delivery platform comes from the price difference between the retail price and the wholesale price.
Representative platforms: TMALL.HK/YMATOU.COM/KJT.COM
3. Self-support B2C model
When it comes to the self-support B2C model, most products need to be prepared by the online platform before shipping. There are two types of self-support B2C platforms:
Comprehensive self-support B2C platform
For now the only leading comprehensive self-support B2C platform is YHD.COM, which is supported by Amazon and Wal-Mart.
Vertical self-support B2C platform
This model means that the platform focuses more on a certain area to choose the product category, such as food, luxury product, cosmetic or clothing.
Representative platforms: WOMAI.COM/MIA.COM/SASA.COM
4. Guide and rebate shopping model
For a simpler understanding we will split this topic into two parts, the conduction part and the transactional part. Conduction refers to all the means and channels through which customers are led to the product or service: news, online forums, blogs, or ads, all constitute a part of conduction and focus on attracting the consumer. As for the transactional part it involves the submission of the order to an overseas retailer and any monetarily transaction that comes with it.
In order to guarantee product quality and adequacy, this types of platforms usually cooperate with an overseas ecommerce group. Normally the guiding/rebating platform in China joins their pages with the overseas ecommerce pages and once the transaction is done, the overseas ecommerce gives about 5%-15% commission rebate to the Chinese platform. Later the guiding/rebating platform refunds part of the commission to the customer.
One of the main advantages of this model is that the integration of new products and the development of the business itself are relatively simple. Also, because it is a joint between two online platforms, the conduction part results more rewarding since both parties can attract a huge number of customers in a short amount of time and meet the customers’ demands.
As for the disadvantages, long-term projects might be a bit more difficult to carry out since the business depends on two separate ecommerce platforms. Management of the supply chain could also become a problem due to distance and time zone differences.
Representative platforms: ETAO.COM/HAITAOCHENG.COM/123HAITAO.COM
Cross-border negotiations seem to bring a lot of advantages if one is intending to do business with China. Choosing the right model for your business’ needs is crucial for the growth and success of it. Here at 2Open we have plenty of experience with these types of business models and our team of specialists will be more than happy to assist you with any enquiry that you might have.
This article was edited by Andres Arroyo Olson from 2Open.