Since the dawn of online retail, e-commerce days are a big part of celebrating different national holidays. These shopping days are often created by different e-commerce platforms in China, running promotions for all the major holidays and using discounts to turn them into e-commerce days. For every company doing business in China: you should mark these e-commerce days in your calendar!
Jacco
What you need to know about using WeChat for B2B – 5 top tips
Although some might argue otherwise, WeChat is a brilliant tool for B2B. If properly used, WeChat offers incredible opportunities for brands to market directly to potential customers on a device that each person does not let out of sight throughout their waking hours. However, as this only applies for well-designed accounts, Brandigo listed 5 tips for running B2B WeChat accounts all brands should consider while opening an official WeChat account.
Fashion Blogger Sells 100 Cars On WeChat In 5 Minutes
On July 22nd, 100 people bought a car on WeChat. This is easily one of the most interesting WeChat ecommerce case studies to date. How were the cars sold? What sales techniques did they use? Why was this campaign such a success?
100 limited edition MINI Cooper, a total value of 30 million RMB, sold via the WeChat account of mega popular fashion blogger Becky Li (黎贝卡).
She has attracted sponsorship deals from an impressive lineup of international luxury and beauty brands including Chanel, Dior, Burberry, Gucci, and Hermès. As a fashion and shopping blogger Becky Li certainly reached the upper levels of China’s massive influencer economy.
In China they are more commonly referred to as key opinion leaders (KOLs). The bloggers posts about what designers they’re wearing and what products they’re using in an attempt to influence both the taste and shopping habits of millions of upper-middle class followers. They produce on average four times more views and close to eight times more engagement than the brands’ own accounts on WeChat, according to L2’s China: KOLs Insight Report.
This particular campaign had the “Perfect mix”
Becky Li is not a sales woman, nor is she an expert on cars, and yet this campaign managed to convince 100 people in under 5 minutes! How you may ask, well it was a clever mix of the right content for the right audience:
- For her more impulsive followers, she evoked their emotion by quoting a review from a follower who was a full-time mother.
- For her rational followers, she listed the practical features and functions, and subtly slipped in a celebrity testimonial.
- For those pursing lifestyle purchases she threw in an exclusive hand-over ceremony and cocktail party.
The “what, why and how” of an ICP license
For international companies wishing to battle in China, obtaining an ICP license is a must. ICP stands for Internet Content Provider, the license is issued by the Chinese government and allows you to host your website on the domestic server. This is basically a permit for you to communicate with your Chinese consumers online: your email, SMS, public account on Wechat etc. are all depending on it. Meanwhile, due to the rather heavy Internet censorship, websites hosted outside China either open very slowly, or worst case scenario, are not accessible at all.
Sounds complicated? No problem! We will sort out the basics about ICP license for you, so as to decide if you need such a license and how to get it.
What type of ICP license should I get?
There are two types of ICP license—ICP registration and commercial ICP license. Depending on the nature of your website (informational or transactional), you’ll need different ones.
ICP registration/ICP BeiAn (for informational websites)
The ICP registration, or BeiAn in Chinese term, is required for websites that are not intended for commercial transactions. Such registration is available for websites owned by either a company or an individual. Meanwhile, the procedure for registration is easier and faster. Your request will normally be processed within 1—1.5 months.
Commercial ICP License (for transactional websites)
A commercial ICP license is for companies looking to sell products in China, especially ecommerce platforms. Starting from 2015, Wholly Foreign Owned Enterprise (WFOE) holding a valid Chinese business license can also apply for a commercial ICP. While this new policy has somehow paved the way for foreign retailers, remember that it is a new regulation and do expect a lengthy and tedious process.
Why an ICP license is a must for your online business in China?
Basically, an ICP license gives you the possibility of communicating with your Chinese customers online. Sending out emails and SMS, opening a Wechat account under your company’s name, or having your company information listed online. Despite of the essential function, there are more benefits.
SEO ranking: Chinese search engines such as Baidu and Sogou offer better ranking to websites hosted locally.
SEM strategy: Only by obtaining an ICP license, can you promote your website through Baidu adword.
Better online marketing: One of the best personal communication channel in China is email. And to send emails in China, you need to have an ICP license. Otherwise if you are sending from a foreign server, the email delivery rate will be very low.
Better user experience: Typically when your website is hosted in China, it opens and responds faster. Moreover, you can also have a .cn domain by having an ICP license, which shows Chinese consumers more ‘authenticity’ and ‘reliability’ of your site.
How can I get an ICP license?
You can obtain an ICP license through the official website of the Ministry of Industry and Information Technology (MIIT) in China. It’s important to notice that the website, as well as the entire application is ONLY in Chinese, so you might need help from your Chinese colleagues or agencies.
You also need to prepare quite some documents for the application. Feel free to refer to below as a quick checklist of the documents you may need:
- Copy of your business license in China (valid and with company seal)
- Certificate for your domain name
- Information of your contact person (Chinese national only) in China
- Information of the company owner (can be non-Chinese national)
- Picture of your Webmaster or the legal person (taken at a certain verification point)
- Signed copy of the ICP license application form
Final tips:
It may sound a bit ‘intimidating’ to undergo all the verification and documentation process. But having an ICP license can indeed help you unlock tremendous potential for your online business in China. Bear in mind some final tips and hope they can make your application easier!
- Prior to your application, you need to set up an entity in China. You can either register yourself as a Wholly Foreign Owned Entity, or have an office established in China.
- The timeline for application could vary in different provinces/cities.
- One of the most convenient way is to file an application through your hosting provider.
- While an ICP license gives you more opportunities with your online business, it doesn’t give you’re a guarantee. There are more regulations regarding content, privacy, transaction etc. Make sure that you are playing by the rules.
Chinese digital consumers are a model for the future
With cellphones being the primary device for working, shopping and entertainment nowadays, a mobile platform should be a brand’s first priority when wanting to reach Chinese digital consumers. Chinese digital consumers consume content via mobile platforms while commuting, taking breaks at work, and during lunch – spending on average 26 hours per week on their phone. Right now, brands use their website blogs as flagship content marketing tools: they publish content on the website, push the content to other channels, and refer social media and mobile readers back to the website. However, with WeChat being the go-to-platform for Chinese digital consumers, WeChat will become the primary platform for articles and thus a crucial component to spread your content. If you haven’t already, read more about how you can maximize your social channel’s potential.
Cross-border ecommerce in China: localization
For international companies in China, MNCs and SMEs, localizing digital marketing strategy is hard. First, it’s a big challenge to sell almost anything in the (over-) saturated market. Second, find the right proposition is also tricky. Resting on the laurels of ‘foreign heritage’ is no longer the way out. With millions of foreign brands flooding into the market, the only way to differentiate yourself is to demonstrate your product value and the unique brand story behind.
Similarly, pricing also matters when it comes to positioning your brand. Most of the international brands believe that their foreign nature allows them to ask for premium price – yet this is only partially true. Many local brands (such as Huawei and Xiaomi) are now leading the domestic market, leaving the premium positioning unfeasible for foreign brands. Besides, mid-income consumers are increasingly interested in purchasing quality and affordable products directly from cross-border platforms. As a result, pricing should be competitive among imported goods, while reflecting your product quality.
Moreover, it’s also a good strategy to offer discounted prices during major ecommerce festivals in China.
Unique consumer psychology is one of the most drastic difference between China and the western world. It’s fundamental for foreign companies to get through some key points before rolling out any online activity in China:
Purchase cycle
In most of the European markets, consumers start their online purchase by searching through a search engine – even if they know what they want. In China, this is not the case. A typical online purchase path is: discover a product on social media channels (e.g. Weibo) → search for the product on marketplaces (e.g. Taobao & JD) → Place an order on the platform.
Digital Marketing Strategy
KOL
Words from peers and influencers are important references when buying online in China. Therefore, KOL marketing is incredibly effective in boosting brand exposure. KOLs usually operate their own account on social media, and collaborate with brands to deliver promotional content (video, article, live-streaming etc.). However, a common obstacle with KOL marketing is: making sure that you are picking THE RIGHT influencer(s), out of thousands of KOLs, for your target audience.
Social branding
By using a master App such as WeChat, companies are able to both sell and engage their audiences via content marketing. Moreover, WeChat also enables brands to embed loyalty programs into their official accounts.
Personalized communication
While social media such as WeChat is for making a social blast, when it comes to personal communication, email and SMS are still dominating in China. Brands are able to track & store user behavior, and use the information to personalize the message to each consumer.
As for SMS marketing, companies are able to add a unique signature to the text preview, enabling recipients to immediately recognize the sender. In the message, you can also include a URL directing to a webpage and track who has clicked on the link.
Customer service
Local consumers are used to immediate and personal assistance. In China, customer service across different platforms is available 7 days a week, 16 hours a day, at least. And of this almost around the clock service more than 80% takes place via Wechat, live chat or over the phone.
Timing also matters in customer service as 90% of the online shoppers will make inquiry BEFORE placing an order. Hence if the response rate is not good the customer will almost certainly be lost.
SMS integration is highly important in customer service. Consumers want to know where their packages are. SMS integration allows companies to update customers about their order, payment and delivery in a timely fashion.
In conclusion, finding your way in the Chinese market requires both innovation and localization. It’s essential for brands to deliver the right message, to the right person, at the right time.
Stay tuned to learn more about the ecommerce world in China
Or Sign up to our newsletter if you want a monthly digest of the latest Chinese Digital Marketing news!
The evolution of Chinese social media in 2017
The Chinese social media landscape is one of the most unique and dynamic ones in the world. As social media and the internet evolve and the gap between business and social is shrinking, brands cannot ignore the importance of putting effort in understanding trends and integrating them wisely into their business strategy. To be of assistance, Kantar media CIC has shared five major trends shaping social media and strategy in China and around the world.
Cross border ecommerce in China: the basics of TPs
If an international brand wants to establish online business in China, Tmall is the marketplace it can almost never avoid. To make things easier, brands can work with Tmall Provides (TPs). These agencies offer help from A to Z: establishing a Tmall store, sorting out legal issues, protecting your IP and strategizing your digital marketing campaign…Below are the basics that you should know if having a Tmall store is in your plan.
What exactly is a TP?
TPs are agencies certified by Tmall to help sellers with their marketing, logistics, IP protection, IT development and more. In fact, Tmall global accept foreign merchants ONLY if they work with a TP. Such agencies were selected by multiple criteria, including: # of years of experience working with cross-border ecommerce in China, bonded warehousing options and multilingual skills of staff etc. Besides basic store setup, TPs could assist with almost everything. Below is a chart listing out what TPs can do for merchants:
Why you should work with a TP
Besides the mandatory part, one of the biggest reason for collaborating with TPs is that they speak the local language. They are able to assist international brands with quick responses to consumer demands. They are the expert of the local market – knowing exactly how Chinese consumers are like. Finally, they have rich experience working with foreign brands – being able to bridge the gap between your brand image abroad and domestic.
How does it work?
In general, TPs charge brands in 3 ways: 1) fixed monthly service fee; 2) commission based on sales; or 3) mix of 1) and 2). Working with TPs could be pricy. Typically, a resourceful TP charges anywhere between 20,000 to 100,000 RMB per month (fixed fee); or a 5% – 10% of revenue share. Note that this cost is only going for TPs, excluding platform fees and commissions.
Is there any risk working with TPs?
Yes, there is. Despite that TP could be a great help for new comers in China, it can also bring additional challenges. First off, cross-border ecommerce is still a relatively new business in China. Hence, there are some TPs operating without extensive track record. Secondly, being certified does not guarantee quality. Companies themselves know best about their brand story and heritage. Therefore, close monitoring is required when working with TPs – so that your brand image in China doesn’t deviate from the origin.
What you should look out for when working with TPs
Select on service expertise
TPs usually offer one-stop solution, even though they may have limited experience in some regards. Determine what specialties are most important to you, and make the selection accordingly.
Select on product category
Tmall often classify TPs by product category, so as to better assist its vendors. For instance, TPs dealing with food & beverage would have different expertise than those handling baby care products.
Select on geographic location
Apart from national regulations, cross-border ecommerce pilot zones may have their specific procedures. Therefore, selecting the right location may give you easier access to online business in China.
(Resources from ‘China Cross-border E-commerce Guidebook’ published by the Consulate General of the Netherlands in Shanghai)
Want to find out more about TPs? Contact us info@agencychina.com for more information.
2017 China KOL report: what you need to know
The Key Opinion Leader (KOL) market in China is massive – not only in terms of revenue, but also the tremendous number of influencers available for brands home and abroad. To help companies better plan their digital KOL strategy, AdMaster and Weboyi.com released the 2017 China KOL report this month. Here’s what you need to know.First of all, when it comes to social media marketing, KOL is the main focus for most of the brands, for 63% of them to be exact. Setting up and operating a WeChat account is also important (49%). Brands also express their interests in Social CRM and live-streaming. Surprisingly, Weibo is losing its glory: only 22% of the respondents show interest.
As KOL marketing is gaining more and more attention, the cost of running campaigns increases exponentially. On Weibo, the price of influencer marketing in Q4 2016 increased over 7 times compared to Q1. On WeChat, the price of hiring KOLs in the cosmetics industry grew the fastest: more than 300% increase throughout last year! On both platforms, the price for the baby care industry increased the least.
Of course the high effectiveness of KOL marketing in China boosted the price. Nonetheless, it’s estimated that 69% of the statistics has been ‘marked-up’. Shuijun(水军), or unqualified followers, are hired by some influencers to fake up the number of views, likes or reposts of a social media post.
Facing the challenges, how should brand choose the most suitable KOL for them? The report offered us a selection funnel:
Step 1: Find out a few topics that your target audience would mostly be interested in.
Step 2: Search these topics on social platforms.
Step 3: Check out the users who are posting about these topics. You can filter by location, gender…
Step 4: List out which KOLs are these users following in common.
Step 5: Choose from the list of KOLs according to your product, budget and more.
In addition, digital KOL strategy differ when it comes to different industries. For example:
- Cosmetics companies tend to invest the most in KOL marketing. Many of them are working with KOLs with over 500K followers.
- Automobile and baby care tends to work with KOLs on Weibo.
- Food providers often adopt a ‘cross-over’ strategy by working with KOLs from fashion, lifestyle, entertainment and comedy etc.
In the next few years, KOL will still be one of the most effective digital marketing channels in China. At the same time, it’s also evolving new social trends:
- The new era of ‘social video’. As Apps for live-streaming and short video becomes popular in China, social video campaigns will serve both branding and conversion purposes.
- Influencers on specialty marketplaces. Red (小红书), one of the most trending ecommerce platform in China, is working with KOLs to write about and recommend fashion products. This strategy has tremendously boosted user interaction.
- Vertical platforms will be the next battlefield for brands. From 2015 to 2016, the numbers of KOL ads on Weibo and Wechat has decreased by 65%; while on vertical platforms (e.g. live-streaming), the number grew by more than a half.
- KOL marketing for sales. Before, brands collaborate with KOLs mainly for branding purposes. Nowadays, more and more platforms are enabling users to not only view posts, but also purchase directly. More and more brands now are using influencers for sales generation.
Digital KOL marketing is still a relatively new marketing channel in China. For international companies, it’s particularly important to do your market/consumer research to find the right influencers and the right channels.
AgencyChina can help you narrow down your best digital marketing strategy and help execute great KOL campaigns! Get in touch today!
China cross-border e-commerce platforms & entry strategy
If you are still only thinking about Tmall & JD when it comes to China cross-border e-commerce platforms, then you definitely need to catch up. In recent years, many western players, especially fashion retailer, have tapped into the Chinese e-commerce market. These platforms offer custom clearance and free shipping services, so that cross-border purchase is almost as convenient as buying from local marketplaces. Meanwhile, local internet companies such as NetEase also established its own cross-border platform, directly competing with Tmall and JD in global business.
Types of cross-border e-commerce in China
Chinese consumers almost exclusively shop on online marketplaces, instead of stand-alone sites from brands. In general, there are 5 different types of 3rd-party platforms in China:
Online malls
In online malls, customers are able to directly purchase items from independent merchants. The most famous examples are Tmall Global and JD Worldwide.
Hypermarkets
Hypermarkets adopt a B2B2C model, which is fundamentally different from online malls. Such markets (e.g. Jumei and Koala) purchase from foreign brands and sell in on the platform. Consequently, hypermarkets charge a markup from wholesale price to retail price.
Specialty marketplaces
Such marketplaces also buy goods directly from overseas suppliers. However, specialty markets only focus on a specific product category (e.g. fashion; baby care), target audience (e.g. young female; new mothers) or geographic location (e.g. Korean; Japan). Although traffic is lower, specialty marketplaces usually generate more qualified prospects and thus higher conversion rate.
Flash sales websites
Flash sales sites offer high discounts for brands that just entered China, or excessive inventories from high-end brands. Such websites can be an effective tool for foreign brands to test their product in the Chinese market, before investing substantially on ecommerce activities. Meanwhile in general, flash sales can be used as a digital marketing tool to boost brand exposure in China.
WeChat stores
Such stores operates on WeChat – the #1 killer messaging App in China. Verified merchants can open an in-app store and sell to millions of Wechat users. Wechat also offers its own payment system for customers and merchants to pay and collect money.
How should I choose the most suitable platform?
As with many other digital marketing tools in China, no single platform fits it all. Hence, it’s always beneficial to adopt a multi-channel approach. In general, there’re 2 ways to enter China through cross-border ecommerce platforms:
1. Fast growth strategy (high cost, fast growth)
Under such model, companies usually start by establishing a flagship store on online malls/hypermarkets. By doing so, brands are able to quickly boost traffic & brand visibility. Also, they are able to gather first-hand consumer feedback and optimize future plans. Nonetheless, setup cost and regulatory barriers are high, and brands need to invest tremendously to fight against competition within each online mall/marketplace.
2. Organic growth strategy (low cost, slow growth)
Smaller brands often follows the path of Wechat store (market test) → Specialty market/hypermarket (exposure) → online mall (stable business). Under this model brands face less financial risks, and are able to use social marketing to target their audience. However, initial sales volume will be low and heavy investment on branding is needed to attract prospects.
As cross-border ecommerce is booming in China, it’s critical for foreign companies to evaluate your goal and budget etc. before settling down for any platform.
(Resources from ‘China Cross-border E-commerce Guidebook‘ published by the Consulate General of the Netherlands in Shanghai)