All posts tagged: Marketing

How to choose the best Chinese E-commerce channel in 2020

China has rapidly become one of the biggest retail E-commerce markets in the world, which as a result, has created interest from foreign brands seeking new opportunities to enter the Chinese market with minimum effort and maximum return.  As an outsider, entering the Chinese market may seem intimidating and overwhelming due to its rich eco-system of platforms and apps. In this article, I will discuss how to choose the best E-commerce channel for your brand in China.

Every company hopes to be successful which often encourages brands to use only the biggest and most popular platforms to do so. However, some of the most popular Chinese platforms are unsuitable and often when a brand signs up, its products become unnoticed due to ambitious competition. 

Furthermore, popular Chinese platforms can sometimes be ineffective as they often require a lot of investment for traffic and marketing, yet, not every company is willing to spend hundreds of dollars when entering the Chinese market. 

Here is a list of the 5 best Chinese E-commerce platforms for brands in 2020.

Different types of E-commerce platforms in China 

The Chinese market has developed lots of successful E-commerce platforms. All of which, cater to the needs of the consumers and products.  However, this can be confusing for new companies entering the Chinese market as they are often unsure as to which is the best platform is for their brand.

Most brands tend to approach one of China’s most popular platforms, Tmall. Tmall is an Integration of the Taobao app. However recently, brands are reporting more and more that their sales are decreasing dramatically on Tmall, and those who set up their store on this platform without fully researching if there is a demand for their product in China beforehand, will struggle to make money. 

In 2018, Kantar released a whitepaper to show which businesses best suit the different types of E-commerce platforms:

Best fitting E-commerce platform in China: audiences

Platform size: The platform’s audience size matters. However, it is also essential to bear growing trends in mind. For example, four years after its creation, Pingduoduo became larger than JD (Jingdong) based on its registered and active users. 

Location: For luxury businesses, it is necessary to aim for the wealthier cities in China. Whereas other businesses might instead target second or third-tier cities dependent on their products (rent and operations are also cheaper in those cities). However, the brands that target top tier cities may find their competition to be much more ambitious.

Case study 1: Online to Offline market entry of Aldi. 

Aldi has been selling goods online in China since 2017 via Alibaba’s online retail platform, Tmall. The platform is a great tool to test the local needs in those second and third-tier cities, with less ambitious competition.  In 2018, Aldi launched an online flagship store on its site.

After creating brand recognition and a strong marketing image, Aldi opened three different stores in Shanghai. After the first store opening, Aldi launched a mini-program on WeChat, to offer instant delivery to customers within three kilometers of the Shanghai locations.

Foreign brands often struggle when coming to China as they are unfamiliar with local tastes, shopping habits and are unable to adapt to the market quickly.  However, Aldi overcame these struggles by collecting its own data via online platforms and applying that knowledge to its offline operation. 

Business model: different types of E-commerce accounts 


When entering China’s E-commerce space, both the platform’s business model and your brand’s business model should be “on the same page”.  Here are some models to choose from:

  • Regular Local Enterprise: registering on a platform as one of the local businesses (even fully foreign-owned corporations), requires a Chinese business license. 
  • Regular Overseas Enterprise: registering on a platform as an overseas business that wants to use a cross border channel, to be a platform supplier, or have an overseas brand marketing station (for marketing only, not for sales), also requires a foreign business license and foreign bank information. 
  • Flagship store: available for Local and Overseas Enterprises on various platforms. Flagship means “branded” and requires a trademark. 
  • Supplier of the platform: Is not an actual account, but more of a supplier contract.  Suppliers provide products that are sold on Tmall, JD mall, Tmall’s membership store, Alibaba’s Hema and many other markets. They also require a manufacturing and hygiene license. 
  • Personal store: a personally owned store where anything can be sold, usually a small business/DYI type of store. This requires a Local ID. 
  • Exclusive Distributor: similar to a local enterprise, an exclusive distributor is a representative of one or two brands that have an exclusive distributorship right with those brands. For Tmall it would be a TP (Tmall partner) and would require a brand’s letter of authorization. 
  • Brand station: In RED/Xiaohongshu. The brand station is a brand account that is used for communication and marketing. 

Brands have multiple options to choose from with regards to Chinese E-commerce platforms. This can vary from working abroad, to working with local partners or hiring a local team. 

According to a platform’s business model, brands will need to structure their marketing and sales operations accordingly. On PingDuoDuo with group buy priority, brands will need to consider a special price structure for different group sizes. On Xiaohongshu, a review and advise platform brand should work closely with content creators in order to generate traffic and sales. JingDong requires strong marketing on its platform, as well as knowledge on PPC type of advertising.  

It is important to understand local shopping and product searching habits. It is also important to remember the specifics of each E-commerce platform and the top priorities for your brand planning to operate on local social E-commerce or media.  Localizing your brand’s message or even brand name is also critical for the brand’s success.  

Brand investment levels 

Different E-commerce platforms in China require different levels of investment. Some Chinese E-commerce platforms take a commission from the sales you make and also charge for platform usage fees, template feels, marketing tools fees and take deposits. There may also be other hidden charges for using their platform. 

TMALL:

When opening a flagship store on Tmall, it requires an average investment of 30,000 USD (dependent on the type of commodity, as it can vary from 20,000 to 100,000 USD). 

Minimum monthly sales volume of the store: One million RMB +  

Marketing: To try and reach one million US dollars in sales per year, it is likely that you will need to spend at least $10,000 USD each month on marketing. This means roughly 12% of your gross will go into advertising.

Agent (TP) fees: 10-20% 

JingDong: 

Managing a business on JingDong (JD.com), can be as expensive as Tmall, or even more. Enterprises will have a commission of 4-6%. Local businesses will be expected to pay 1000 RMB /150 USD as a monthly platform usage fee, whereas foreign enterprises will be paying 1000 USD per month. However, the store design template is free. JD also has a lower safety deposit (10,000 – 100,000 RMB dependent on the industry, and 100,000 RMB applies for high-risk products such as cars, electric bikes, etc.) 

Pingduoduo 

This platform is probably the most cost-efficient as no commission is collected from retailers for using the platform. Whilst the safety deposits are also very low, with a maximum payment of 10,000 RMB/1500 USD. It is free to enroll and the advertising on the platform is still reasonable (CMP is the cheapest of all of the platforms above). 

RED 

It will cost 300 RMB annually to use this platform. The safety deposit is around 20,000 RMB/3000 USD. In order to use advertising on RED, another 20,000 RMB shall be charged to the ads account. 

HI-COM’s action plan for brands wanting to enter China E-commerce:

  1. Market study: a comprehensive study of product/brand deficits in China. Study of competitors. Gathering data about industry-specific local shopping habits and tastes. Evaluation of pricing strategy of competitors. 
  2. E-reputation: creating a digital footprint on various Chinese wiki sites, blogs, and magazines, in order to create trust from Chinese consumers. 
  3. Brand localization: lite version. Localizing a “lite” version of a brand’s website, and hosting in China. Localizing brand name, brand attributes, marketing collaterals. 
  4. Brand awareness social media campaigns: the creation of social media campaigns that highlight the brand’s differentiating factors, educate the local audience about the usage of the product/service, evaluating results. Social media listening. 
  5. Creating social media channels: choosing one or two most efficient social media accounts, creating a 6-month publishing plan.
  6. Using KOL for brand awareness and lead generation. 

This is the first 6-9 months of a brand’s market entering plan, which might need some extra input dependent on the industry.  It should also be noted that brands should only move on to the next step when the previous steps have created positive results.

If you have any more questions about Chinese E-commerce platforms and how to enter the Chinese market with minimum costs, feel free to get in touch as we’d be delighted to hear from you.

HI-COM is a multilingual localization and communication agency dedicated to providing professional localization solutions, content and social media management to businesses around the world. HI-COM helps companies enter the Chinese digital ecosystem with a simple and hassle-free approach.  Contact us for your free consultation today!

Kate CHERNAVINAHow to choose the best Chinese E-commerce channel in 2020
read more

Setting Up Your Weidian Shop in 2019

Weidian is often described as the “Shopify” of China. With over 80 million stores on its platform, its simplistic design makes it very popular. Weidian is easily accessible on mobile phones and uses convenient payment methods such as Wechat, Alipay and Union pay. In the Chinese market, its biggest competitor is Taobao.

Zahra SAFDARSetting Up Your Weidian Shop in 2019
read more

The Children’s Book market in China: statistics and translation challenges

Our topic for today is all about China’s children’s book market and children’s book translation. A new study has revealed some interesting statistics on children’s book sales in the Chinese market, which continues to grow year on year. Did you know that in China, over the past ten years, the entire books market has grown by 19% each year? The sector recorded growth of 14.55% in 2018, thanks in particular to the dynamism of children’s books

Kate CHERNAVINAThe Children’s Book market in China: statistics and translation challenges
read more

China’s Dazhong Dianping: English guide, 2019

As stated in our previous article, Chinese tourists are very easily influenced by the opinions of others. When traveling, they refer to their own “review and advice tools”, the king of which is Dazhong Dianping. Featuring similar functions to Yelp, it lists local retailers, restaurants, bars, cinemas, and other services. in China and abroad and it is the go-to tool for Chinese tourists. For example if a restaurant has a seemingly never-ending list of raving reviews on Dianping, the Chinese will flock there in their droves without any hesitation. Here is our Dianping English guide for you!

Kate CHERNAVINAChina’s Dazhong Dianping: English guide, 2019
read more

Brand name translation

When it comes to dual localization, brand name translation, especially into languages such as Chinese, Japanese, and Arabic, can be very sensitive, and despite the fact the end result may only consist of one or two words or characters, the amount of time, research, and effort involved to arrive at this point can be enormous. This is especially the case in China, where one character may have several meanings, and these meanings may morph into something completely different when paired with another character.

Kate CHERNAVINABrand name translation
read more

Social media strategy for foreign brands in China

Social media strategy is something you cannot easily set up alone. In China’s mobile phone dominant social media market, managing Chinese accounts for foreign brands is becoming more and more difficult. Not only do you need to pay attention to trends, content styles, and creative ideas for different types of social media platforms, each one has it’s own analytics and data processing tools. Mastering your Chinese social media skills is therefore crucial for branding and community management in China.

Kate CHERNAVINASocial media strategy for foreign brands in China
read more

Kate Chernavina’s Insights into Chinese Influencer marketing in 2019

HI-COM’s marketing director Kate Chernavina has been featured alongside other industry leaders in business magazine, BW confidential, commenting on influencer marketing trends on Tmall, and differences in KOL cooperation. She spoke about the role of Micro KOL in Chinese digital ecosystem, product review marketing, and more. 

Kate CHERNAVINAKate Chernavina’s Insights into Chinese Influencer marketing in 2019
read more

Top 20 Chinese Social Media Sites of 2019

Have you ever wondered which Chinese social media sites are the most popular?

Every second 486 Wechat articles are published in China, 166 rooms booked on Qunar, 115,740 Q&A’s on Zhihu, and 3,472 orders placed on E’leme, and over 62% of people open the WeChat app more than 10 times a day. The role of social media in China is huge as it not only entertains but also influences food, life, and fashion choices, provides makeup and homestyle reviews, and advises on holiday spots: therefore consuming a large amount of the work time of white-collar citizens.

Kate CHERNAVINATop 20 Chinese Social Media Sites of 2019
read more

How to translate a website: 11 tips from professionals

How to translate a website in order to enlarge your audience and reach local markets? When coming to emerging markets such as Brazil, Russia or China, booming imports and e-commerce markets have made these counties and cultures impossible to avoid. In this article we will describe how to translate a website and show you how to avoid problems when localizing it.

Kate CHERNAVINAHow to translate a website: 11 tips from professionals
read more