The Chinese Cross Border E-Commerce Market: Three Reasons to Tap Into China’s Digital Generation
Despite growing at a compound annual rate of 8.5% through to 2022, there is still…
By Pippa Horn
Most companies get it: China is big. The market is big. But many companies are hesitant to pursue a China strategy – put off by its complexity, costs and challenges. One CEO summed up his concern with a pithy bit of sarcasm; “Call me when China stops being weird.” In other words, there are differences in China in terms of strategy, timing, costs and expertise compared to selling in their domestic market.China is one of the most digitally innovative countries in the world, which means that companies have a host of opportunities to get on the Chinese map – but not without presence of its most powerful app, WeChat.
WeChat is an essential app in China, just as Google is to the rest of the world. WeChat Official Accounts are a powerful means of gathering followers and redirecting them to a website or e-commerce platform. Above all else, it offers brands the opportunity to claim back the ownership of customers and their data – let’s take a look at some of the other benefits of a strong WeChat presence:
1. More than a digital wallet
WeChat Pay is a payment feature integrated into the WeChat app that allows users to complete transactions directly through their smartphones, providing a seamless user experience for both businesses and cross-border commerce.
Accepting WeChat Pay is a must for just about any business type. A number of places outside China, such as London’s Camden Market, are seeing increased uptake usage of WeChat Pay. While Chinese travellers can pay by credit card if they have to, most of them prefer to pay by WeChat.
Companies such as JGOO provide businesses with a full service we chat pay solution, including terminal provision, installation of terminal or integration to POS, training of consumer facing staff, service support and set-up and maintenance of online payments.
2. Online-to-offline integrated marketing
Chinese tourists are known to be avid pre-trip researchers, especially when it comes to bargain shopping. But how can brands and retailers get on their radar during this itinerary planning phase?
This is where the ubiquitous tool WeChat comes in. Because consumers tend to research the expansive ecosystem in preparation for their trip, all those users’ activities leave traces for advertisers to target them. How? One targeting technique that has proven successful is to push out ads while the target audience is still in the mainland.
A pre-departure advertisement can plant a seed to encourage Chinese travellers to include a retailer or shopping centre on their itinerary. Once the seed is planted, advertisers can drive in-store traffic by launching another round of ads targeting once shoppers have arrived in the UK.
3. Mini programs: your China portal that all of the top players are using
E-commerce has become we-commerce. When a customer pays for something with WeChat, they are added to your database, allowing your company to offer special promotions, loyalty programs, and functionality such as store-finders to these users.
As an example, WeChat KOLs (key opinion leaders) such as Xiaoxiaobao Mama are making over £5 million (US$6.65 million) in monthly sales via their WeChat mini-programme – which is essentially a sub application within the WeChat eco-system that is easier and less costly to build than a stand-alone app. Users are able to access any possible web-app through the browser after scanning a QR code or performing a direct search.
4. Ease of customer relationship management
Social CRM’s refer to the integration of social media platforms and social media technologies with CRM platforms – the idea is for businesses to build a more direct and personal relationship with customers by following them on social media and reacting accordingly.
WeChat acts as a direct communication channel for brands to track customer’s feedback, mentions of the brand, and complaints consistently. For example, Air France’s WeChat account has a customer service chat function, which has the capability to respond to customer queries in Chinese or English. Customers can use the service to perform tasks such as choosing seats, specifying baggage needs and cancelling flights. Even for a brand still mainly outside China, having a China-based team for full CRM via WeChat creates a personal touch that Chinese consumers love.
5. Cultural element
Whilst most companies understand the potential of the market, we are still seeing a large amount of hesitation when it comes to pursuing a China strategy. The most prevalent reason for market failure is lack of cultural understanding – with the classic example being eBay, the successful American C2C commerce giant that replicated its American model in China and got destroyed by local competitor Taobao.
WeChat is able to differentiate itself in this respect since it aligns with the Chinese way of life. It is a trusted platform that over 1 billion monthly active users incorporate into their way of life. It is a platform that is familiar, one that offers a seamless and trusted path to purchase, and most importantly, a platform that was born out of China.