It goes without saying that because of the COVID-19 global outbreak, the offline economy is suffering severely. This has been the case across all countries.
At a time like this, cross-border e-commerce gives businesses an opportunity to sell in other countries based on the demand. One such country is China, which, after dealing with the pandemic is back to business.
Chinese consumers, unable to travel, are looking for the opportunity to buy products they need from all around the world without even leaving their home.
According to the data from the General Administration of Customs, in the first half year of 2020, cross-border e-commerce import volume increased by 24.4%.
Also, products that come from the most popular destinations for Chinese tourists, have been selling out on Tmall Global. Since travelling abroad for Chinese tourists is still impossible at this moment, consumers are seeking overseas products through cross-border e-commerce.
This shows the increasing opportunities for e-commerce in China right now. If you’re looking to introduce your brand to the China market – the time is now!
Not only because of the unlimited opportunity in China, but also because it is a good way to reduce the risk from shrinking demand in the local market by expanding to a new market.
In this post, we’ll share:
- What the customer journey in China looks like
- Factors to keep in mind when creating your China entry strategy
- Intro to Chinese media channels and strategy
- How to decide on the right budget for your business
- Kickstarting your first campaign in China
What does the customer journey in China look like?
In the west, most brands have their website to sell products though they also sell on platforms like Amazon and other top e-commerce websites. But in China, majority of brands rely on the e-commerce platforms to sell their products.
The customer journey usually begins on platforms like WeChat, Weibo, Douyin etc. Customers read and search for product information on these social media platforms. They also take a look at user experience shared in short video, long video, and live-streaming platforms. If they find that the recommendations from others meets their requirement, they will then switch to e-commerce platforms to make the purchase.
Another thing to note is that Chinese social media is ripe with opportunities for creating sponsored content. Combined with advertising, brands use content marketing by producing content themselves and partnering with KOLs (i.e. influencers) to make their products visible to Chinese consumers.
Altogether, e-commerce business in China is also well integrated with social media and online communities. There are several influential e-commerce platforms similar to Amazon in China, such as Tmall Global belonging to Alibaba Group and JD Worldwide which forms the last step in the customer journey.
Questions to keep in mind while planning your China entry strategy
While creating your China market entry strategy, there are some important questions you should keep in mind:
Will you have a legal entity in China or overseas?
Will you establish a branch in China and register a company there? Or use your overseas business entity? This will influence the process of building your Chinese website/landing page, set-up of your Chinese e-commerce sales points, your digital advertising accounts, social media accounts and all other digital assets.
Will you use a local operational team?
Do you have a local (Chinese-speaking) operation team to follow the orders and serve customers? This is crucial for handling certain parts of your operations.
What will be your approximate investment period?
Having a realistic expectation and being aware of the investment return period for your business in China is also important for brands wanting to enter Chinese market. For instance, the profit margins for health supplement industry is high, but companies must be aware that the investment return period is long as well.
Top Chinese media channels and entry strategy
Media Channels in China can be divided into 3 levels:
- Omni-Channel Media: Platforms such as WeChat, a multi-functional one-stop platform that fits into a variety of scenarios in a user’s daily life.
- Core Social Media: Platforms such as professional networking channel – LinkedIn, social network channel – Weibo, and interest-driven social network Douban and Xiaohongshu. Channels in this level are relationship-centric.
- Derivative Social Media: Includes short video channels like Douyin (TikTok) and news feeding channel – Toutiao. Channels in this level are content-oriented, where audiences are inclined to use one-way communication to obtain information about their area of interests.
How AdChina.io creates an entry strategy for customers
AdChina.io is not just a self-serve advertising platform, we also help customers create their ad strategy if they need it.
To find the right channels for our customers and create their China market entry strategy, we consider 3 factors: The industry, target audience, and objective.
The most important factor to consider while planning your China market entry strategy is your industry. There are regulations in major media channels that limit advertising for some industries in China. For example, some channels do not accept advertising for health supplements or certain apps. We evaluate this and decide the channels and the right proportion of advertising, content marketing and KOL marketing.
Your target audience
The second factor is the target audience. Except for omni-channel platforms such as WeChat, which is used by pretty much every Chinese mobile user, different channels have different user groups. We find the most suitable channels for you based on your target audience.
Your campaign objective
And last but not least, an important factor to consider is your campaign objective. This objective can be divided into branding and sales.
If your main objective is sales volume:
We focus on e-commerce channels, creating content, finding relevant KOLs and advertising on the e-commerce platform.
If the main objective is branding:
Here, the strategy would skew towards content marketing and banner ads on important media channels.
Kickstarting your first ad campaign in China
Based on your campaign goals, we will create a 3-step action plan.
1. Creating your account set up
The first step is account set-up. As part of your China entry strategy, you need to set up an e-commerce sales point, official communication channels (website and social media accounts), and advertising accounts depending on the channels we’ve decided to go with. This step may take some time and need a collection of documents, normally would be around 1 month.
2. Creating your first test campaigns on key channels
The second step is testing. We will start with a smaller budget to do some test campaigns. This will help find the most suitable marketing message and the best performing channels. By doing so, we will learn from the testing period for future campaigns. The length of the testing period varys case by case, but generally we use the first 1-2 months of the campaigns to do the test.
3. Test, rinse and repeat
The third step is running the campaigns on a day-to-day basis. During this time, we regularly coordinate with customers to share campaign progress.
Every month, we’ll share advertising and content marketing plans for specific campaigns. Not just that, we will also report on the marketing performance for the previous month.
The campaigns are continuously optimized based on the learnings from day-by-day performance.
For customers who want to run the campaigns themselves on our platform, they can do so easily.
Entering a new market can be stressful. Especially if it’s a market like China which holds a lot of opportunity, yet is quite different from the western market. We hope this post gave you a clear roadmap of the steps involved in creating a successful China market entry strategy.