{"id":8842,"date":"2021-11-09T07:30:47","date_gmt":"2021-11-09T07:30:47","guid":{"rendered":"http:\/\/TheNextWeb=1372361"},"modified":"2021-11-09T07:30:47","modified_gmt":"2021-11-09T07:30:47","slug":"how-to-successfully-expand-your-brand-into-china","status":"publish","type":"post","link":"https:\/\/www.londonchiropracter.com\/?p=8842","title":{"rendered":"How to successfully expand your brand into China"},"content":{"rendered":"\n
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The Chinese market is one of the most appealing for brands looking to expand into new territories. And it\u2019s clear why \u2014 the ecommerce market in China is $2.7 trillion<\/a>, four times the size of the US ($843 billion<\/a>), and is growing twice as fast. What\u2019s even more exciting is that the share of ecommerce sales to total retail is expected to be at about 52.1% in 2021, growing from 44.8% just a year before.<\/p>\n

While this is promising, I\u2019ve found that there\u2019s a widespread delusion among many executives that since there are 1.4 billion people in China, they\u2019ll definitely be able to sell something<\/em> due to the market\u2019s sheer size.<\/p>\n

But that\u2019s not necessarily true, and we know many examples of a brand that failed to do so. Companies ranging from Tesco and Uber to eBay and Google have been on that path and had to exit or rebuild their strategy entirely.<\/p>\n

So let\u2019s dive into what\u2019s the right way to approach the opportunities the Chinese market has to offer.<\/p>\n

It\u2019s all about ecommerce<\/h2>\n

Since ecommerce sales are about half of the total retail in China and even more than that in particular categories, I\u2019d advise any brand interested in this market to focus on a digital-first strategy.<\/p>\n

If a brand is used to offline distribution, its management and owners will repeat their usual strategy when entering China.<\/p>\n

They think the following way: \u201cHell, we entered the USA, Brazil, and Japan. We know how distribution works, how advertising works, how to build relationships. We will enter major local retail chains just like we entered Walmart, Carrefour, and others. Each store will provide us with an expected monthly sales volume (100-200 kilograms or 200-500 packages on the shelf). That\u2019s it\u201d.<\/p>\n

But if you want to export to China, the biggest mistake is repeating your strategy from other regions, even if it works outstandingly. In China, things are different.<\/p>\n

Beware retail<\/h2>\n

In China, retail chains are overloaded with demand from all kinds of suppliers. You will have to pay for the shelf space, for a listing, promotion, and generally be offered pretty terrible terms. This means you will pay a lot, and you\u2019ll get a wildly unpredictable result. Put simply, the market is saturated, and you\u2019re new here.<\/p>\n

Even if you\u2019re large enough, you will be working through distributors with no control over your sales. And unless Chinese consumers already know about you, the retail chains have a minimal incentive to let your products on their shelves.<\/p>\n

Ecommerce is different. Online marketplaces have infinite shelf space. Anyone with a bit of reason can put a product there. Compared to the time, effort, and cost of offline distribution, ecommerce is quick, effective, and scalable.<\/p>\n

So the first question is to assess whether you\u2019re ready to go online as your market entry strategy. If so, your team needs to understand how the ecommerce market works in China. Unlike ordinary retail, it\u2019s pretty much unique regarding customer behaviors, habits, and the local ecosystem.<\/p>\n

The local ecosystem helps you<\/h2>\n

In China, selling online is much more efficient because of the uniquely powerful marketplaces and supplier\/vendor ecosystem. We do have bloggers and influencers in the US and Europe, but they\u2019re more than just influencers in China. They are the media, and they control consumer trends.<\/p>\n

We may have Instagram Live, but brands market their products through endless live streams performed by popular influencers, bringing their audiences to you. On platforms like Taobao or Douyin, they take the products they\u2019re interested in and help you convert their audience into your customers. You instantly get connected to them, communicate with them, follow up, and market your products even further.<\/p>\n

You might think that it\u2019d be hard to top Amazon in terms of network power. But in fact, Amazon is just 5.8% of the US retail sales ($234 billion versus $4.04 trillion). And while it\u2019s generally pretty good for consumers, suppliers have had significant and constant issues selling their products through Amazon, including some that have led to antitrust lawsuits<\/a>. Unlike Amazon, Chinese ecommerce platforms help businesses grow.<\/p>\n

Most importantly, platforms like Taobao and Alibaba provide us with data on sales for each product category and for each merchant \u2014 something you\u2019d be surprised to see on Amazon. That allows anyone to adjust their product offering and adjust their listings for improved results.<\/p>\n

The cost of customer acquisition through the Taobao live streaming or Douyin is much smaller than the investment required for offline retail. And most importantly, the ROI on the amount of money and efforts invested is significantly higher. Online sales are comparable in volume to offline in China, and for some products, even more significant.<\/p>\n

Almost any brand, small or large, can start selling on Chinese online platforms, and for the following two to four years, you won\u2019t even have to think about offline retail at all. And then, when the audience has already had a taste of your products \u2014 when you have proven there\u2019s a demand for them \u2014 and have a few years of performance data, you could go to retail chains, show it to them, and get placements with more ease.<\/p>\n

Essentially, you\u2019ll de-risk your products for the Chinese brick and mortar retail outlets, and who\u2019s not interested in profits with minimal risks?<\/p>\n

Get local help<\/h2>\n

To market your products effectively, you will need to find a TP \u2014 a trading partner handling marketplace operations and managing live streaming platforms and blogger relations. Finding the right partner is a big part of your success. There are several agencies whose entire job is to help you find the right contractors. But you can\u2019t just outsource these responsibilities straight away.<\/p>\n

You need to have people explicitly focused on Chinese markets, talking to your trading partner, providing messaging points, basic marketing materials, and other details. Nobody knows your product better than you, and nobody will do that job for you.<\/p>\n

A good trading partner always asks many questions and demands data to run successful campaigns, helping you flourish within the Chinese market.<\/p>\n

Some of the companies that tried to enter China and failed believe there was something wrong with their brand. They pity themselves and explain to all others they just were too different and unique for this market, and there was nothing they could do about it.<\/p>\n

The problem is not that your brand is unsuitable for selling in China or that you do not have enough money. The problem is neither in legal questions nor logistics. It\u2019s about your competencies, experience, and psychology.<\/p>\n

Success in China depends on whether you have people in your team who have experience working with the unique challenges of the region or at least are willing to learn and adapt because they understand it\u2019s a different beast.<\/p>\n

To successfully sell products in China, you need to look at companies that have operated there successfully for many years. Or, even better, at the ones that failed and rebuilt their operations. If Pizza Hut can make its product appealing to Chinese consumers, you can do that as well.<\/p>\n

Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Chinese market is one of the most appealing for brands looking to expand into new territories. And it\u2019s clear why \u2014 the ecommerce market in China is $2.7 trillion, four times…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=\/wp\/v2\/posts\/8842"}],"collection":[{"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8842"}],"version-history":[{"count":0,"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=\/wp\/v2\/posts\/8842\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8842"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8842"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8842"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}