Challenges at China's markets for foreign brands - Ashley Dudarenok

Ashley Dudarenok

The China market is of a magnitude brands cannot ignore, although some of the foreign brands still take this major consumer market not serious, says China veteran and marketing expert Ashley Dudarenok to Euromonitor. "It’s mostly European and American brands that have organizational challenges," she adds.

Euromonitor:

Do brands need to be on marketplaces in China? Why? 

Yes. Tmall and JD are too large to ignore, but there are other, specialty marketplaces that may be a better fit for your brand. Chinese consumers prefer these websites to the official direct to consumer website for most brands. 

What are the benefits of working with a marketplace? 

You have access to a large consumer base. Being exposed to a large consumer base helps brands to gain more attention than was previously possible. 

What are the challenges of being on a marketplace? How do you overcome them? 

It is extremely competitive on the big marketplaces so there is no organic traffic. You’ll need to spend about 20-30% of your revenue on advertising. It is extremely competitive on the marketplaces. It’s important to test to make sure that you will have the volumes to justify the cost. Experiment with social media and collaborate with key opinion leaders to see if there is demand for your product. Start with a small marketplace to see how volumes are growing enough to justify a presence on the larger marketplaces. 

What are your metrics for gauging success on Chinese marketplaces? 

There are two categories for metrics: Success: usage, bounce rate, transaction metrics (products sold, number of customers) and business metrics (gross merchandise value, customer acquisition costs, and customer lifetime value). User satisfaction: The marketplaces are strict about ensuring a good customer experience. You need to be under a 7% refund rate and a 4% dispute rate. 

What are the organizational challenges brands face? 

It’s mostly European and American brands that have organizational challenges. The brands think that they can sell the same way in China as they do in their home markets. It’s not true. You need to adjust product lines, brand positioning, and customer activation strategies appropriately. It’s also important to provide customer service around the clock. As a result, many brands are underfunded on Chinese marketplaces.

More at Euromonitor.

Ashley Dudarenok is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more branding experts at the China Speakers Bureau? Do check out this list.  

The war between US and Chinese platforms - Jeffrey Towson

Jeffrey Towson

Chinese platforms are going global: Ctrip, Didi, Alibaba, Baidu, UnionPay. Global platforms try to enter China: Airbnbn, Uber, Google, Facebook. Peking University business professor Jeffrey Towson welcomes us to the US-China platform war, and explores on his LinkedIn page the battle field.

Jeffrey Towson:

Point 3: Complementary and inter-connected platforms can be particularly powerful. A single platform is good. As mentioned, it can have lots of strengths, particularly when competing against a traditional vertically integrated merchant (VI). Especially, if you can get a network effect and some economies of scale going. 

But complementary networks can be even better. This is when you actually have two different (Multi-Sided Platforms) MSPs serving a common set of users. The two MSPs can sort of amplify each other. For example, Microsoft Word (an MSP) is helped by being on the Microsoft Operating system (another MSP). They both have a user group in common and amplify each other. A mapping application (sometimes an MSP) linked into Wechat (another MSP) is another example. Complementary networks are very common in China, where much of the mobile world has collapsed to a few powerful ecosystems (Alibaba, Tencent, Baidu). 

However, inter-connected platforms are arguably even better. This is when a platform (or set of features) is actually integrated within another platform - to the point that the whole thing becomes inseparable within a service. The feature the user group sees and uses is actually being delivered by several interconnected platforms. For example, advertising-based media (e.g., Yahoo, broadcast TV) is increasingly inter-connected with advertising networks (i.e,. platforms that match advertising buyers with available inventory in real-time). That’s how the ads on Yahoo, Baidu and Google get placed in real-time based on who you are or what you are looking at. There are actually +2 interconnected MSPs delivering this service.

More at Jeffrey Towson´s LinkedIn Page.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more strategy experts at the China Speakers Bureau? Do check out this page.