The China Opportunity in Fashion & Beauty.
There are a lot of similarities between China & India in terms of the Size of the Population, but there is a big difference in the ways both the markets distribute international brands.
The CHINA OPPORTUNITY is that of 772 Million Internet Users, and the new import policies since 2014 benefit the Chinese Consumers & Global Brands.
At the TMALL GLOBAL MERCHANT SUMMIT today, I was taking copious notes, as we get information from the TMALL America team on how to enter the Chinese Market and the business solutions for international brands to sell into this massive consumer market.
Until 2014, the way to enter China was through a Joint Venture Partnership, or through a local distributor. Since 2014, CROSS BORDER is another option which is favorable as it entails #1 No Animal Testing #2 Same Packaging as the USA, #Lower Barrier to Entry #Test the Market #Lower tax rates (9-23%) and no VAT. The way to get started is by understanding the Brand to Market fit, checking the awareness of the brand in the region. TMALL GLOBAL is only for international brands and TMALL is for domestic brands.
THE TMALL GLOBAL ECOSYSTEM:
‘PREMIER DESTINATION TO NOT ONLY DRIVE SALES AND INTRODUCE PRODUCTS, BUT TO BUILD YOUR BRAND AND TELL YOUR STORY’.
FLAGSHIP MODEL: THIRD PARTY- B2C
The International Brand can create its store front via a Third Party (TP). This B2C model has time costs, investment costs, and third party costs.
TMALL OVERSEAS FULFILMENT - SUPPLIER MODEL
Supplier Model is the Wholesale model where Alibaba will direct import and keep the merch in a bonded warehouse (where there are no local taxes) and ship out the merch once there is an order.
MARKETING ON TMALL GLOBAL:
TMALL not only a Sales Channel but it is also a marketing channel, where consumers have ‘Chill Time ‘(LIVE STREAMING is very effective and popular), Celebrities KOLS, Offline Events, Content Strategies and Hub.
PROMOTIONAL CAMPAIGN PLANNING:
1) Event & Promo Campaign Drivers
2) Sync Marketing Investments with platforms’ event Calendar.
Key Pointers to find the right partner for your Brand in the China Market.
Checklist of information to ask from the Third Party Service Provider: 1) Ask for the offering, and 2) Case Studies and 3) of course, TP’s who work in the same category as your business. 4) Check for referrals from other international brands, 5) check the capabilities in Customer Support & IT support i.e technical expertise (in China there is a saying ‘DATA TALKS’ 6) Check for the culture nuances, and values alignment. 7) level of transparency is important and Brands must be very involved in the business for it to succeed.
The Panelists also recommended visiting China as well to visit the TP offices.
After whetting the TP credentials, check their Team Credentials (these are people who are going to work on your account) - their Attitude, Passion, Professionalism for your brand is paramount.
REPORTING INTEGRATION BETWEEN HEAD OFFICE & THE THIRD PARTY
Ask for customized information in terms of the reporting that you are looking for, from the market, Daily Reporting is available on Apps in China and there is an interface (in English for the Brands). Ask for integration of reporting between HQ and your internal report systems.
Your Brand will not just sell on its own, but it needs to be nurtured which requires patience, determination and lots of hard work.
TRENDS IN CHINA.
Try to gather information on the trends in the Chinese Market, for the market signals, and the rising trends. What works for the brand in USA, may not work in China. For example, whitening creams are big in China whereas Tanning Creams will have a nil to a very niche market.
ONLINE VERSUS OFFLINE MARKETING
Online Marketing drivers are the CHINESE INFLUENCERS: the KOL’s on WeChat, Weibo, Live Streaming.
Offline Marketing drivers are the Pop-Up Stores (which must be ‘Experience Driven’) and be a Brand Immersive Experience. Chinese consumers are buying international brands because of the lifestyle it connotes and the Education.
CUSTOMER SERVICE
The customer Service people are strong advocate for your brand and instrumental in high sell-thrus.
All in All, this is the summary of the various presentations at the Conference.
Excerpts from the TMALL GLOBAL MERCHANT SUMMIT, NEW YORK , JULY 25, 2019.