“In carrying out e-commerce, the most important thing is to keep doing what you are doing right now with passion, to keep it up.”
– Jack Ma
I have been living in China for four months now as a part of the AGLA program. In my first of two rotations in the program, I work at Tmall Global (www.tmall.hk). Tmall Global is the platform for non-Chinese companies to sell directly to Chinese consumers without much of the hassle in setting up a standalone storefront. As a part of the global team, I help American and Canadian companies enter the Chinese market. Interestingly, most of my meetings are in Chinese, not English, but I am able to help brands because the cultural barrier is much more important than the language barrier. For instance, China is a mobile-first market meaning that consumers will spend much more time on their mobile phones and check that first before (and maybe never) checking the same information on their computers. So with this in mind, below are a few of the things I have learned to help brands with in terms of entering the Chinese market.
Key Opinion Leaders
The most similar marketing approach to the West is that of Key Opinion Leaders (KOLs). I think there is not much difference between using celebrities in the USA and China to help brand your company’s image. The small difference is mostly that Chinese KOLs seem to be more omnipresent. The same KOL should do a live streaming, live advertisements, advertisement, product placement etc for reaching into the same audience. The use of KOLs in China is most similar to the use of internet celebrities in the United States- very famous among their niche market and can really amplify branding messages through various channels.
The major issue here is to find a KOL that is key for your demographic and not to just copy and paste the celebrities one uses in the West. Although a celebrity in the West may also be famous in China, his/her brand in the West could be very different from his/her image in China. For example, Ziyi Zhang, of “Crouching Tiger, Hidden Dragon” and “Memoirs of a Geisha” fame is easily the most recognizable Chinese actress in the West. However, on the Chinese mainland, Fan Binging has consistently topped highest grossing actress lists according to Forbes China[i].
Key Opinion Leaders are frequently used in commercial advertising in the West and in China, but catching eyeballs over the airwaves in China is an entirely different advertising adventure for Western firms. For example, take a look at these two online advertisements for the opening of a Victoria’s Secret store in Canada and in China.
As we can see in the examples above, when creating advertisements for a Chinese audience you really have to catch eyeballs. With an online population of 731 million[ii] China dwarfs whole regions of the world. One may think that you could easily garner at least 1-5% of this population. Quite contrarily, more shoppers means that there are more brands online which means that consumers have more places to shop and merchants have more competitors that can steal their thunder. Advertisements in China must be eye-catchingly fun and interactive.
It is difficult to truly build the interactivity that Chinese consumers want into a commercial advertisement. The answer is live streaming events through a mobile device in order to maintain the gaze of the consumers. In addition, one must do more than what those in the West are accustomed to. Observe how brands utilize QVC and HSN live streams. What you will notice is that the live streams are a product demonstration advertisement showcasing a specific product. Now watch how American Brands use Alibaba’s Tmall mobile live streaming.
Live streams are truly momentary for most brands in China; they are not archived and re-watchable events. The consumer must be a part of the live stream at that time or miss being a part of the action. Chinese live streaming is entertainment that keeps viewers watching your product, unlike the USA where it is usually a direct selling opportunity. Chinese consumers are looking for the full and fun shopping experience , not just to hear the features of a product. Live streaming in China is much more about keeping the consumer interacting with you during the live stream than immediate sales volume; you are building brand image. Key elements to include in a live stream are: KOLs, quizzes, coupons, hongbao, product demonstrations, interactive brand history lessons, store walkthroughs, and contests to win your products.
After attracting consumers to the Tmall Global storefront, the next challenge is to keep them on site long enough to facilitate a purchase. Note the difference between Patagonia’s United States and China country storefronts[iii]
Note that the Chinese interface actually has a long page for scrolling through. This snapshot is just one of about 11 scrolling pages comprising the storefront homepage. A scrolling homepage makes it easier to quickly navigate in a mobile first society with high speed internet. The United States is computer first mobile second society where consumers will spend the time to download flash plugins and peruse the many sleek videos on the site within just a few clicks of the mouse. In China, you need almost everything at your fingertips in a few scrolls of a mobile device of you may lose customers. Customers in China on a mobile device want to be able to see coupons, favorite the site, view the brand profile and much more within one to three swipes of their fingertips.
Jack Ma’s quote on e-commerce is very applicable to entering the Chinese market as a Western brand. Acutely understand the Chinese consumers’ hopes and aspirations in order to help them fulfill their dreams through your products. Persue this mission with the same vigor as a startup company introducing its first product, because for many in China this will be their first experience with you brand.
Ohh … But there’s one more thing … Red Packets VS Discounts
If given the choice, Chinese consumers would prefer to receive a small amount of direct cash from a merchant in the form of red packets than receive a larger discount on an item. The mobile device games that consumers play on a merchant’s app in order to receive a red packet is just not translatable to the Western world. You must be in China to partake!
Prior to his work with Alibaba, Mark Fleming worked as a venture capitalist and served as an economic advisor. He recently graduated from the Kellogg School of Management in 2016 and is learning Mandarin Chinese while living in Hangzhou, China.
[i] Flannery, Russell. “Actress Fan Bingbing Repeats For A Third Year Atop New Forbes China Celebrity List.” Forbes. May 14, 2015. Accessed February 23, 2017. http://www.forbes.com/sites/russellflannery/2015/05/13/actress-fan-bingbing-repeats-for-a-third-year-on-new-forbes-china-celebrity-list.
[iii] Patagonia screenshots here with citations for Feb21 at 11:00 am china time