Beginner’s Guide for
Retailers in China
Strategy, best practices and lessons learned from
those who have come before.
Executive Snapshot of Global Retail Disruption
Sponsored by:
www.remodista.com
Marketers are
lining up to get
into China, and
for good reason.
The opportunity is eye-popping. McKinsey
and Co. projects that China's online sales will
reach $420 billion annually by 2020,
becoming the world's largest online retail
market in the process. China's population of
Internet users stands at 500 million today,
and stands to grow by leaps and bounds as
the Internet becomes accessible to even
more of China's 1.4 billion-strong population.
Jack Ma, the billionaire founder of Alibaba,
China's answer to Amazon.com, says it best:
"In China, e-commerce is a lifestyle."
Simply put, there's never been a better time
to enter the Chinese market. The
opportunities are staggering—but so are the
challenges. What best practices can you, a
North American-based retailer, use to break
into the Chinese market? To see real return
on investment in the Chinese sector? And,
most importantly, to have the kind of staying
power in that marketplace that guarantees
longevity for your brand, year after year?
If success in China is your goal, these
lessons will help you get there.
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“
The Chinese consumer isn't
one-size-fits-all. They are as
varied and complex a
customer base as North
American customers.
-Remodista Think Tank Panel Discussion
China's Consumers: More
Alike than Different
”
It's a young, mobile, and modern
consumer population. In many ways,
Chinese customers are more sophisticated
If there's one mistake foreign retailers make
than North American and European
when entering the Chinese market, it's
consumers. They have their own social media
assuming that the Chinese consumer is
sites (Sina Weibo), their own commerce sites
fundamentally different from the Western
(Alibaba, Tmall), and they're constantly on the
consumer. The fact is, we're more alike than
move. You won't find a laptop in their hands
different. Yet, it's the subtle differences that
unless you put it there yourself; China's
brands entering the Chinese space must
buyers are wired for a mobile experience. The
understand in order to thrive:
mobile-only commerce world is coming in
•
•
China's social media platforms are their
own
North America, but in China, it has already
arrived.
Brand authenticity is key in a marketplace
flooded with knockoffs
•
The value of a friend's recommendation on
brands they can trust is worth more than a
hundred spiffy display ads on China's top
commerce sites
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Chinese consumers use their online tools in a
Chinese consumers want "the real deal" in a
highly sophisticated way. For example, North
marketplace flooded with pirated goods and
Americans use WeChat, a messaging app, to,
cheap knockoffs—and that's one big reason
well, message. China's buyers use it to reach
why a brick-and-mortar presence that allows
out to a brand's customer service team when
customers to interact with your brand,
they're on a buying site, to do transactions,
alongside a strong commerce presence, will
and to look at brand videos. If there's a way to
help you build credibility in China.
make an online tool useful in the purchasing
process, the Chinese consumer has figured
out how to do it.
Retail Trends in China:
Western Brands and
Authenticity Win the Day
According to China Digital Review, retailers
entering China often make two mistakes:
They assume Chinese consumers want a
"Chinese" version of their product
They assume that the Chinese only pay for
products that will help them gain
"face" (prestige), such as luxury brands
Yet the biggest international winners in the
Chinese retail industry include more than just
luxury brands. Western food products are
doing well (because they're perceived as
safer), for example. No matter your sector,
products with true authenticity will gain trust,
not a "Sinofied" version of it that feels like it's
engineered for one particular market.
“
A deal is a deal
until it changes.
It pays to develop
relationships with
your prospective
partners to
ensure that you’re
well represented.”
-Mitchell Binder, President,
King Baby Studio
”
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Best Practices for Diving into the
Chinese Market
To market successfully in China, reach the consumer with an authentic, relatable brand they can trust—
one that they feel comfortable recommending to their friends. Invest time to understand the business
environment as well: it’s a world where trademark and contract law is fundamentally different than in
other parts of the world.
WHO?
Avoid the Identity Crisis
Find a Partner
As soon as you think you might be entering
Because a deal is never done and the
the market (or somebody else might "steal"
nuance in China is primed for complication,
your brand, forcing you to pay large sums
it’s important to find partners who can help
to gain ownership so that you can legally
you navigate the waters.
market under your brand name).
TAKE ACTION: Staff up with people who
TAKE ACTION: Be quick to register your
understand China from the inside out.
brand trademarks. Talk to other companies
Invest in those relationships. You might
who have gone through contract
even find yourself singing karaoke with your
negotiations. Contracts are never
Chinese team before your first business
"completed" in China; signed contract are
meeting with them.
often re-negotiated over the life of a
business deal.
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“
Every deal you get into in
China is an ongoing
project. That's why
developing relationships
with partners who
understand the social
nuances is critical to
success.
-Kelly Stickel
Founder & CEO, Remodista
”
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Best Practices for Diving into the
Chinese Market (cont.)
Online Natives
The digital landscape is different in China.
The way they experience and utilize
technology and mobile commerce requires a
different approach.
TAKE ACTION: Research the top commerce
sites, like Alibaba and Tmall. Use Google
Insights to find the search terms they use
most frequently. Once you understand the
landscape, start small. Commit to the market
knowing it may take time to see a real return
on investment. The most successful
companies make long-term commitments in
China, understand the culture by having
experts on the ground, and focus on the
quality and authenticity of their brands.
“
It's not a race to get
North American
retailers in front of
the Chinese
consumer. It's a
global effort to offer
better products and
services to them—
and they know the
difference.
”
-Samantha Kent, Director of
eCommerce, JackThreads
www.remodista.com
www.remodista.com
“
We can’t overemphasize how
quickly the Chinese are
mirroring Western demand for
authentic, quality, premium
goods that reflect modern
consumer discernment.
-Chinese Digital Review, 2015
China was once a faraway "Middle Kingdom,"
but today, it's poised to be at the center of the
marketing world. Learning best practices for
getting your brand in front of Chinese
consumers, and mastering the nuances of the
business environment you'll experience, will
help your company have a long and fruitful
”
Get involved!
Are your teams prepared to tackle
these challenges? Learn, grow and
interact with other brand leaders in
our COMMUNITY SANDBOX:
relationship with the largest buying population
in the world.
Start small, find the right partnerships, hire
China experts for your on-the-ground team,
demonstrate that you understand the
VISIT THE REMODISTA
SANDBOX:
http://goo.gl/TEGQFv
business culture, and reach the consumer
with a message that's both mobile and
authentic. The time you invest in getting the
basics right in China will pave the way for
your brand's success for years to come.
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ABOUT THE AUTHORS
Remodista
RETAIL & MOBILITY DISTILLED
www.remodista.com
Remodista is a think tank examining disruption in global retail.
Our mission is to provide insight, education and innovation to
global brands through collaborative research and analysis.
REMODISTA FOCUS AREA:
China Commerce
McKinsey projects that China will become the world's
largest online retail market by 2020 with online sales
forecasted to exceed $420 billion annually, driven by a
growing consumer class and the world's largest population
of Internet users, now more than 500 million people.
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Kelly Stickel, CEO, Remodista
Ernie Diaz, Publisher, China Digital Review
Andrea Guthrie, Independent Global Consultant
Sheila Donovan, Global Marketer, Global DM Solutions
Kelland Willis, Product Development, SAP
Chau Banks, EVP,CIO and Channel Integration, NY&Co
Katy Tonkin, Director of International Search, Point It
Samantha Kent, Director eCommerce, JackThreads
www.remodista.com