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.
2Open with Chinese E-commerce companies and Spanish suppliers
In 2 Open we like to be updated. We are constantly attending events that are related to our business scope (Digital marketing and E-commerce in China) so that we can have all the relevant information on the current situation in order to provide our customers with the best posible services.
In this case, 2Open attended a networking event in Spain that involved Chinese e-commerce companies and Spanish suppliers. The topics covered in the event were related to E-commerce and Digital marketing strategies, more specifically, to the different ways brands have to adjust their products so as to sell them through e-commerce platforms with particular emphasis on the booming of Chinese cross-border e-commerce, its advantages ,and the new fiscal legislation that will be implemented starting on April 8th.
Apart from the information exchange, we were glad to find out that some of our clients (SoloStocks, Amvos, Ecoficus) also attended the event. We also had the chance to talk with other brands who are interested in selling their products online in China and/or doing Digital Marketing to improve their performance.
All in all, it was a pleasant event filled with interesting people finding new opportunities. If you want to know how we can help you to maximize your Sales & Marketing efforts in the Asian giant, please do not hesitate in contacting us. We will be more than happy to talk about your current goals and situation and provide you with the best solutions for your business needs.
This article was edited by Andres Arroyo Olson from 2Open.
2Open at the Avante Awards
This last February 2Open was at the Extremadura’s Avante Awards Ceremony that took place in Badajoz (Extremadura, Spain). This event is held every year since 2013 and it recognizes and commemorates Spanish companies from that region who have had success in international markets. Not only do they award companies who have had an outstanding performance abroad, but also encourages people who show talent, effort, creativity and innovation to position themselves at an international level.
The event aims to incentivize Spanish companies from the region of Extremadura to export value outside of the country, companies who are featured in this event are companies who have had a struggles, obstacles and cultural barriers and have managed to overcome them. 2Open is a proud contender for this award in 4 of its 5 categories which are the following:
- Extremadura Exporta “Trayectoria”, This award focuses on the trajectory of the company. The obstacles and difficulties it had to overcome to gain its position in the foreign market in which it operates. Mostly, it rewards effort, persistency and success cases of a company’s path.
- Extremadura Exporta “Innovación”, This award is for companies who have innovated in someway. This could be by implementing new processes and/or techniques in its exported products or services as well as ways to penetrate a foreign market, differentiate themselves and gain competitive advantage.
- Extremadura Exporta “Joven” , This award is for the young entrepreneur or business man/woman who has managed to be successful at an international level.
- Extremadura Exporta “Agroalimentario”, this category is for the companies who have successfully exported food related products from the region of Extremadura to other countries.
- Extremadura Exporta “Conocimiento”, this award is given to the company who has had success in other markets by transferring knowledge and expertise. This is a new category for this third edition of the Extremadura Avante Awards.
Exporting is an unknown adventure for most companies but day by day, these companies overcome fears and obstacles and Extremadura Avante thinks that they should be awarded for that. We could not agree more, it is not an easy task, but companies like 2Open will encourage other to reach that so desired international level.
We would like to thank Extremadura Avante for giving 2Open a space in its event and for helping other companies to go abroad.
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
Wechat “moments”
“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.
All you need for your Chinese Landing Page
Landing pages have become more and more relevant over the past few years. With an increase in brand awareness and persuading power, they play a huge roll when it comes to online marketing and ecommerce. This article will focus on the basic structure of a successful landing page as the improvements that can be made to achieve better results.
What is a landing page?
Landing pages are often called guide pages, in general terms, a landing page is the first page that appears when a user enters a website, this could be either the homepage, product page, about us page etc. The channels through which the user enters the website are in most cases clicks on advertisements or results or search engines. There are a few things a landing page has to achieve and although it depends on its business scope, their aims can be simplified in the following way:
-Invite users to keep visiting
-Lead users to make a purchase
-Get users’ personal information
-Invite users to share or to comment
-Other activities, which can bring interactions, etc.
What does a landing page consist of?
Usually a landing page consists on 4 main parts:
- USP (Unique Selling Proposition)
- Core media
- Detail explanation
- CTA (Call-To-Action)
- USP (Unique Selling Proposition)
This is what we call “selling point”. In China, a lot of companies consider this as their core competence. It is a way of distinguishing yourself from other competitors; this is where a company presents its most attractive features about the products or the services it provides. It should basically answer the question: Why should consumers hire my services or purchase my products instead of the others in the market?The main headline of the landing page is also of great importance. It should be a sentence that explains your USP and it should attract the users’ attention. It is basically the first thing users read when they arrive in your landing page so therefore it must be concise and catchy.
- Core media
Media has been used to enrich a landing page, making a page more attractive through the use of pictures and videos or animations.When people are watching a webpage, an interesting picture or video can leave a better impression than a sentence.
- Detail explanation
This is a main part of your landing page. Here you need to put more detailed information to support your USP. It could be points that further explain in a more detailed way the main value proposition of your service or product. It could also include advantages of what your are providing the customer as well as useful real life examples that will continue to support your USP.
- CTA (Call-To-Action)
This is the deal-sealing part of your landing page. It should not be difficult for a customer to complete the purchase of the service or product at any given moment whilst he/she is viewing your landing page. It does not matter if it is a button, a link, or a form; you just have to make sure that it is obvious and eye-catching. Users must know exactly what they are doing on your webpage and all the relevant information that comes with it, both monetarily and logistically.
To sum up
We might take for granted the elements of landing pages, consumers do not really notice all of the work that has been put into a webpage, but as long as you would like to have a successful one, you should pay better attention to these details and think on creative ways to improve them. Nobody starts from the top, so why not give it a try and see how a good landing page can benefit your business?
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.
References:
2Open on Spanish radio: Business in China?
Recently, we were invited to a local Spanish radio program called “Onda Cero” in Cáceres City. Vicente Pozas, the host of the show, asked some interesting questions to our colleague David González regarding Digital Business in China. For a lot of people in Europe, China is a far away land with a different culture, different people, and different ways to make business. People are getting interested in China, it has had a huge economical growth in the past few years and interest of foreigners has grown accordingly.
The talk mainly focused on China’s development in certain technological areas, the business opportunities it offers, and the considerations that have to be taken into account if one should intent to do business in China. David González talked about the differences in population of major cities in both countries and the way e-commerce in China has surpassed any other country in the world. He also stressed the way the Chinese middle-class people have gained more purchasing power and how all of this can be translated into a broader potential market for any business.
After throwing out some interesting figures about China, he talked about failure and success cases that foreign companies have had when trying to enter the Chinese market, the limitations and the room for mistakes that exists in the country, and the complexity of making business with a Chinese businessperson.
Although the talk focused mainly on China and the way they make business, David got the opportunity to talk about 2Open, our business values, and the way we carry out every project with passion and commitment. The complexity and the obstacles that a business in China could present and how a company like 2Open can make the whole process a lot simpler and successful.
Here is the audio of the interview with David González on the Spanish radio show “Onda Cero”, sadly the audio file is only available in Spanish, but if you have a particular interest on it please leave a comment and we will post an English translation of it.
This article was edited by Andres Arroyo Olson from 2Open.
The commercialization of Wechat. User experience or profit?
January 11, 2016, Zhang Xiaolong, the man behind the curtain of the Wechat Empire, who had never given a public speech before, stepped onto the stage of Wechat Open Class and shared his opinion on Wechat’s values. The fact that Zhang stood out at this moment is a symbol of the crucial timing of Wechat’s commercialization.
Wechat has now approximately 650 million users; the process of monetization has never stopped in its five years’ existence. Long have begun the business services, such as Wechat payment, shopping, taxi ordering service, etc.
In his public speech, Mr. Zhang shared some of his concerns about the future of the Chinese IM giant. He said:
“Wechat Public Platform seems like a media platform, but we prefer the Public Platform to be more than that, we want to focus more on the developers and that is our goal for 2016. Where does this need come from? We found out that more and more start-ups initiate with a Wechat Offical Account instead of developing a mobile application because the latter costs way too much. A Wechat Official Account could achieve almost the same things but more cost-effectively.”
“It was not our intention to become a media platform, we have always wanted to build a platform to provide services,” Zhang said, “that is why we even created a Service Account in Wechat, but it has not quite met our requirements. Now we are developing a new form: Application Account. We hope that with this new form of Public Account, when users follow it, it will be as if they had just installed an application. This Application Account will be in silence mode for most of the time but when users need it; they will easily find it in the app. By doing this, we grant a lot of apps a lighter existing form and simplicity.”
The leader of Wechat also expressed a more strict regulation for commercial activities in Wechat “There will be more restrictions for marketing events in Wechat Moments, because meaningless content will take up users’ time. The same goes for other functions of Wechat, we hope that there is as little information as possible in Wechat, so that the users can focus on their tasks and finish them effectively.”
After trying to make money with advertisements, Zhang said that he wanted the commercialization of Wechat to be invisible and not a disturbing process based on monetizing of traffic.
One possible reason for the creation of the Application Account is that the current Service and Subscription accounts have impaired the users’ experience. Being buried in numerous and complicated piles of information distracts the users from their goals.
How to balance user experience and commercialization?
This is not a new challenge, and not just for Wechat, social platforms like Facebook, Twitter and Instagram, who already have a mature advertising model based on information flow, come across the same problem every time they try to launch new product for advertising. Unfortunately, there is no existing remedy for this headache.
At the moment, ads in Moments follow several basic rules: if users opt out or just leave it there, the possibility that this ad appears in your friends’ time-line is only 20%. The percentage will rise to 95% if you click, like or comment on it.
Each ad will be able to circulate for seven days, while every single user will only receive one ad within 48 hours. An ad with no likes or comments will be removed within six hours.
We have discussed a lot about the commercialization of Wechat, but is there a possibility that the commercialization of Wechat is not limited by the current models? Could it be possible that the commercialization of Wechat is outside of Wechat?
To understand this, we need to know some fundamental values of Wechat.
- Wechat provides us an essential ID in the era of Mobile Internet – a Wechat account. We use it to keep track of our life and business organizations use it to find us. Before Wechat, the cellphone number was the most important ID, or even earlier we had our e-mail address.
- Wechat has created Public Accounts, this not only solves the problem of digital identity for offline businesses, but also enables a new communication model: one user to many users information exchange, interactive feedback, rich media and mobilization.
- It provides the information flow the highest degree of freedom. We can contact our friends quickly and conveniently by sending messages, sharing information in Moments or through a group chat. All of this has created conditions for a more dynamic flow of money and information.
- This value is still yet unclear however, it would be an important one. Wechat could use Wechat Accounts to locate users and Public Accounts to locate businesses, accumulating trading data between users and businesses so that they could create a “Cloud of consumption”. Based on this cloud, Wechat may provide services like memberships to users or CRM to businesses.
In a word, the commercialization of Wechat is based on output and monetization of these four fundamental values instead of the commercialization of the Wechat as a mobile application itself.
What do you think?
Let us know.
This article was edited by Andres Arroyo from 2Open.
References:
http://www.vvjia.com/article/20151008153623
http://www.99eo.com/info.php?id=8272
http://www.meihua.info/a/65851
http://www.meihua.info/a/65896
http://technode.com/2015/08/24/wechat-ad-moments/