Australia China
Business Council
Setting up an Online Store for China
@AusChinaBC
Welcome
Alison AireyCEO
ACBC
@AusChinaBC
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@AusChinaBC
Presentation
Ms Honor McLennan, Assistant Director (China Team)
@AusChinaBC
Presentation
Mr Ryan Molly, CEO Redfern Digital
Setting up
an Online Store in China
FOOD &
BEVERAGE
CLOTHING &
FOOTWEAR
MOTHER &
BABY
HOUSING &
FURNISHING
BEAUTY &
COSMETICS
ENTERTAIN-
MENT
ELECTRONIC
DEVICES
WATCHES &
GLASSES
JEWELRIES &
ACCESSORIES
Safety 90%
Pricing 68%Ingredients 65%
Pricing 70%
Style 68%Texture 56%
Comfort 55%
Safety 90%
Ingredients 58%
Quality 70%
Safety 60%
Safety 71%
Quality 65%
Quality 67%
Safety 60%
Function 66%
Safety 58%
Design 80%
Pricing 65%Material 65%
Design 84%
Pricing 69%Material 59%
Fresh fruit
SeafoodFresh milk
Sneakers
Casual wearSportswear
Infant formula
Prepared foodDiapers
Toys
Pots
Kitchenware
Skincare
CosmeticsFragrance
Outdoor gear
Fitness gear
Water purifier
Cleaning robotsAir purifier
Watches
Sunglasses
Diamonds
PearlsGold
7
TOP CONCERNS
MOST NEEDED PRODUCTS
PURCHASE INTENTION IN THE NEXT SIX MONTHS
22.9%HIGHER SPEND
20.4%LOWER SPEND
19.5%HIGHER SPEND
20.5%LOWER SPEND
26.6%HIGHER SPEND
18.4%LOWER SPEND
20.0%HIGHER SPEND
29.4%LOWER SPEND
29.9%HIGHER SPEND
12.7%LOWER SPEND
21.4%HIGHER SPEND
19.0%LOWER SPEND
24.6%HIGHER SPEND
25.6%LOWER SPEND
28.5%HIGHER SPEND
20.6%LOWER SPEND
30.4%HIGHER SPEND
20.5%LOWER SPEND
Chinese consumers show strong interest in purchasing Beauty & Cosmetics and Mother & Baby
when it comes to general cross-border shopping online.
Which one is right for me?
SME (In-market)
Large (In-market)
Large (Market-entry)
Domestic WeChat Mini App
Vertically Integrated
Douyin Store
Paid Media Launch
CBEC Tmall & JD
CBEC WeChat Mini App
Paid Media Launch
Daigou
Domestic Tmall & JD
Vertically Integrated
Offline Retail
Paid Media Launch
Daigou
CBEC Tmall & JD
CBEC WeChat Mini App
Paid Media Launch
DistributorDistributor
MARKET ENTRY MODELS
SME(Market-entry)
Little Red Book: A social e-commerce
platform. Users come to RED for trusted, quality content. It is an ideal place for new
brands to create word of mouth and build its brand presence in the highly competitive
Chinese online market.
Douyin Store: Douyin allows users to both link to stores on e-commerce platforms such as
Taobao and set up a native e-commerce shop. Setting up a Douyin store allows
followers to buy products directly on the app.
Youzan is one of the most popular WeChat store developers.
Benefits of these platforms include:
●Easy to offer discount codes●Import products directly from Shopify
●Receive payment v ia WeChat and Alipay directly to overseas bank account
Tmall Global Tmall is the cross-border arm
of Tmall.com, with a user base of 601 million. It is a B2C platform and one of the
most popular cross-border market places in China where international brands can
run their own stores.
Kaola is one of the largest e-
commerce hypermarkets in the Chinese market.
JD Worldwide is the cross-border arm of
JD.com and it’s the second largest B2C platform in China. JD is known for its
excellent logistics network.
Social Media & Grassroots Ecommerce, Flagship Stores and New Retail
Hema is Alibaba’s rapidly expanding offline
retail store. It’s the digitization of the entire value chain.
WeChat Mini Program are built within the
WeChat platform. Users no longer need to leave the WeChat ecosystem.
10
Setting up on WeChat
Why use Mini Programs to engage online users?
• A new way of connecting to users and prov iding serv ices• Easy to access and grow on WeChat, delivering a heightened user experience
• WeChat account (own media) + mini program = social commerce platform• Integrate membership system and shop functions – CRM features
• Multi-channel traffic acquisition• Easily accessed and disseminated within the WeChat ecosystem – closed loop
• Higher exposure (the mini program is automatically saved once it’s clicked into)• Personalization for the followers
1.2
Billion
1
Billion 746
Million
2
Million
MAU on
WeChatMini Programs
Launched
RMB of Daily
Transactions through Mini
Programs
Mini
Program MAU
Current numbers on WeChat…Setting up an account on WeChat
• WeChat is the largest social media platform in China, with over 1.2 billion monthly average users
• A cheaper alternative to setting up an entire website• When a user subscribes to a brand’s WeChat account, a personalized
welcome message can be sent to them, alongside options for learning more about the brand
• An automat reply system can be set up for followers
Managing Costs of E-commerce Platforms
Tmall Global:
• One-time deposit fee: RMB50,000 to RMB300,000
• Annual serv ice fee: RMB30,000 to RMB60,000
• Commission rate per transaction: 2 - 5%If the store sells products across multiple
categories, then the applicable fees are equivalent to the highest category fee.
JD Worldwide:
• Refundable deposit fee: USD15,000• Annual serv ice fee per store: USD1,000
• Commission rate per transaction: 2 - 8%
Kaola:
• Initial deposit: RMB10,000 to RMB100,000
• Annual serv ice fee: USD1,000• Commission rate per transaction:
2 – 10%
Xiaohongshu (Little Red Book):
• Deposit fee: Varies depending on the category and brand, but on average,
is USD3,500 for foreign brands. • Annual serv ice fee: RMB10,000 to
RMB60,000• Base commission rate: 5%
LRB dropped its commission rate from 15-20% to 5%, citing the COVID-19 outbreak
as the reason.
Discounts and Promotions
Steady normal price + normal
coupon
Platform marketing strategy
CRM to increase loyalty
Promotional price + promotional
coupon
Sales Pricing• Stable daily prices to increase the credibility of the
brand
• Discounts can be controlled by issuing coupons and discounts or by reducing the price
• It is difficult to establish brand image if the price is
too low• Brands can prov ide KOLs and Taobaoke customers
with exclusive coupons• Offer benefits through a CRM system (membership
system) specifically for new and old customers
Discount Strategy• Use discounts to reduce price if it is higher than
competitors• Use discounts to pull up the ATV if the price is similar
to competitors
Sales strategy (Promotions)• Hold promotions during the traditional and popular
holidays
• Conduct campaigns throughout the year, e.g. centered around a specific theme or for product
launches• Rev iew campaign results and adjust strategy
accordingly
Drive
traffic to
E-commerce
store
01
02
03
BundlingA popular strategy for brands is to package multiple types of SKUs at one time. It gives consumers an opportunity to discover what SKUs they like.
MerchandiseBrands can come up with creative merchandise offerings that goes with their main products to encourage purchase. E.g. Alcohol brands designing shot glasses to sell with their alcohol, or baby food brands designing bibs or toys to sell with their main products.
Limited EditionBrands can develop limited edition products for specific holidays or campaigns to enhance the feeling of exclusivity, and drive sales during that time.
04 VIP/Loyalty SchemesEnsure that customers have a reason to purchase again by offering VIP and loyalty schemes with unique, added value benefits.
Tips for creating repeat purchases
Content Format
Graphic
contentQ&A
Live-
streaming
In-APP Advertising
Options
• Banner advertising
• KOL live-streaming• App opening ads
• SEO management
• Taobao Express• Diamond Booth
• Tao Bao Ke
• Pin Xiao Bao• You Hao Huo
Examples:
Recommendat ionqualit yproduct sdaily
•Productintroduction +
brand story
Unboxing, t est ing,and responding insync
•Product packagingand texture display
•Try-on haul
Post s for brands’follower community,able t o interact with
cust omers
•Product s
introduction +Int eractive cont ent
Recommendat ionsect ion for onlyqualified cross-
border product s.
•Product
introduction +brand story
In-APP Marketing Case Study: Taobao & Tmall Global
One of the biggest issues foreign brands encounter
when entering China is that they underestimate
the budget needed for an effective marketing
strategy. Yearly budgets for brands can range
between USD 10,000 on the lower end to over USD
1,000,000 for larger brands
Marketing services that your budget may look to
cover include:
i. Baidu Search Engine Optimization & Search
Engine Marketing
ii. Public Relations
iii. Website Development
iv. Paid Media
Paid Media and BudgetingTo increase brand awareness and drive traffic to online stores
01
02
03
Social Media/E-commerce
Paid MediaPaid promotional tools built into the platforms
Product SeedingSending products to grassroot users to generate noise about the brand
Key Opinion LeadersKOLs can promote the product or service to their follower base
Types of Paid Media in China
• Social media has evolved rapidly with the emergence of
multi-platform strategies for brand communications, becoming one of the main sources of information on
brands for potential consumers.
• Brand marketing has evolved from simple online
engagements to an online-to-offline approach.
• In a broader sense, social marketing helps to develop
a brand experience circle.
Brand marketing and social media are evolving together.
Source: iResearch; Kantar CIC
The 2000s
Social media as a platform to increase
brand awareness
The 2010sSocial media as a platform to engage
and communicate with consumers
The 2020s
Social media lies at the core of
creating a brand experience circle
The evolut ion of social media
Social media is a key touch point
connecting the other elements
in a brand experience circle.
Source: iResearch; Kantar CIC
Brand experience circle
BRAND
Offline
Distribution
Social
Marketing
Media
Advertising
Embedded
Marketing
Offline
Events
Online
Distribution
• A complete brand experience circle
will make sure that consumer
expectations are met and exceeded,
which can contribute to building
positive IWOM (Internet-Word-of-Mouth).
• This can help to improve the brand
image, allowing more people to
become engaged in the circle,
attracted by recommendations from friends, family members or KOLs.
Content Marketing: Own Media
To develop touchpoints for reaching consumers across different social media platforms, brands should create official accounts and develop a content marketing plan for their own media pushouts.
• Understand different styles and formats for
each of the platforms
• Specialize content according to
demographics and interests to increase
engagement
• Stay on top of trends or hot topics
• Always have a call-to-action
• Create content that invites user participation,
e.g. challenges, giveaways, contests, polls
• Develop content pillars to focus on for each of
the platforms
• Consistent brand style, design, image and
identity across all platforms
WeChat, as the largest platform, is a great tool for brands to build communities
and encourage customer loyalty.
Closed Systems and Restrictions on Direct LinksMany of the major social platforms in China are closed systems or have restrictions on what
outside websites or platforms can be directly linked.
Closed Systems
The closed systems make the
platforms’ content difficult to index for search engines.
Alibaba’s platforms are not indexed
on Baidu, which forces customers to
search for products on the platform and not the search engine.
Restrictions on Direct Links
Restrictions on links to external websites prevent
the diversion of user traffic off the platforms
WeChat regulates external links, especially to competitors. Direct links to e-commerce
platforms such as Taobao and Tmall, news
aggregate platforms such as Toutiao, and several short video platforms such as Douyin
and Kuaishou are blocked.
Weibo implemented new regulations restricting
access external links, with exceptions for government authorities, authorized media,
major web portals and some official businesses.
What about Websites?Chinese consumers have a different purchasing journey, as they will often
search for and discover new products
directly on e-commerce or social media platforms, rather than through a search
engine. However, ahead of trade shows, brands may still want to set up a Chinese
viewable website as a form of company
validation.
A website can be valuable as:
• A reliable source of information on
the company
• A lead generation platform
(more so for B2B)
• A customer serv ice touchpoint
• A brand validation tool
• Server
• Domain
• ICP registration
• Police registration
• Content translation
• SEO and maintenance
Hosted in Mainland China
Requirements for setting up a Chinese website:
Not Hosted in Mainland China
• Server
• Domain
• Content translation
• SEO and maintenance
* Domains can be purchased from a registry** ICP stands for Internet Content Provider. An ICP license is a state-
issued registration that allows a China-based website to legally
operate in the country. Having an ICP license allows companies to host their websites on a server in mainland China and is required for
all businesses that have an e-commerce site in China. The server is usually leased through a service provider such as Alicloud or
Amazon Web Services (AWS).
Search result for “Man-made meat”(Plant-based meat) on Baidu
A website that is invisible or has no traffic makes
no contributions to either marketing or sales.
Based on students’ search behavior, websites
should be optimized to the most relevant
keywords (SEO), thereby boosting the website’s
v isibility on search engines.
• Brand Keywords
• Product Keywords
• Target Audience keywords
Website marketing
Before attending tradeshows in China, brands can set up their WeChat accounts and prepare the QR code to their account. During tradeshows, to direct consumers or business partners to engage with the brand afterwards, brands can display their QR code.
WeChat QR codes are widely used in China and are an effective method of encouraging new consumers or business partners to stay connected after the trade show. Brands can add tags to anyone that scans a specific version of the QR code to indicate who the followers are, e.g. which QR code was scanned.
Connecting during Online/Offline Tradeshows
Example of RedFern Digital’s
WeChat QR code
Make it as easy as possible for people to access your products
• Brands need to ensure that they are across
as many sales channels as possible, then invest in paid media to create massive hype
to drive traffic volume.
As many outlets as possible!
Case Study: PenfoldsCategory : Wine, AlcoholBrand: Penfolds
Origin: Australia
Ecommerce & Social MediaOnline channels: JD, Taobao, Tmall, WeChat, etc.
JD Tmall
Expanded sales channelsIn 2014, Penfolds expanded onto e-commerce
platforms in China in order to gain access to a
wider range of channels for sales and promotions.
Investments and localization in ChinaMany foreign wine brands sell tea products from abroad by
working with Chinese distributors. Penfolds works with Fuyi
Group(富邑集团), which helps the brand to act quickly and meet the needs of Chinese consumers.
Consistent design and productionPenfolds uses designs and productions that are of high quality
and consistent with its branding for the China market. Using
consistent packaging designs and communication styles, the
brand is able to delivery their brand identity to the Chinese
audience, building up brand recognition in the China market.
Promotional channelsPenfolds also frequently collaborates with WeChat KOLs to bring
traffic to sales channels and uses an omni-media strategy across
platforms.
MAKING BRANDS CHINA RELEVANT.
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CWIP
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SB
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S S P
WHATDOWEDO
Brand Audit Sampling
Creative Solutions Branding
Social Media Strategy
Digital Integration
Ecommerce
Production
Brand Packaging
SEO & SEM
Research
Paid Media IP Monitoring Web Development Consumer
@AusChinaBC
Q&A
Ryan Molly
Setting up an Online Store for China
Thank You