More and more companies are setting their sights on China and understandably so. As with any new market, however, China comes with a unique set of challenges. So, for those looking to capture the attention of Chinese consumers, we've gathered a few simple tips to help you get started:
1. Seek guidance
Especially when you're just starting out, it's important to have a few organizations and people in your corner offering candid advice. You can learn a lot by speaking with investors who have invested in Chinese companies, or with other startups and entrepreneurs who have succeeded or failed in China.
Online giants like Alibaba and Tencent have access to a wealth of knowledge about Chinese consumers and share some of those customer insights publicly. Another option is to seek out groups like the Global Innovation Forum, which connects entrepreneurs with local innovators, policymakers and influencers (including logistics and financial services companies helping small businesses sell to China).
2. Get to know your customer
The rising middle class has spurred demand for high quality goods and exclusive international experiences. Statistics show that Chinese consumers buying outside of China are most interested in luxury goods and retail (e.g., clothes, jewelry), health and wellness (e.g., vitamins, baby formula) and travel (e.g., hotels, transportation, experiences). Selling products and services customers prefer to buy outside of China, either while traveling overseas or online, will make it easier for you to gain traction.
But before you consider selling cross-border to Chinese consumers within China, consider how you can learn from the estimated 50 million Chinese citizens living overseas. The Chinese diaspora is a powerful community and remains influential among friends, family, and colleagues back in China. Many businesses find that their adoption among Chinese consumers happens organically through this diaspora community, as well as through powerful social networks like WeChat.
3. Get discovered
Getting your product discovered in China is challenging if you're an overseas business. Leveraging powerful Chinese e-commerce ecosystems, like Tmall, can be a relatively low-cost way to increase visibility and learn about the Chinese market before making a larger physical investment, like a storefront. Given the competition from large international brands who also leverage Tmall to sell their goods, smaller brands should consider working with a third-party operator to support their end-to-end operations and enhance their discoverability on the platform.
Alternatively, businesses can work with Key Opinion Leaders (KOLs), or deal sites in China, that can promote their product across a number of e-commerce channels and help them get discovered in their early days. DealMoon and 55Haitao are good examples of deal sites that businesses can pay to promote their company's products.
4. Make the checkout experience a breeze
Offering payment methods that Chinese consumers use daily is imperative if you want Chinese customers to complete the checkout process. Alipay and WeChat Pay represent two of China's most widely used payment methods with over a billion users between them. Since many Chinese consumers value convenience and familiarity when shopping cross-border, offering these payment methods will help you serve your customers better.
5. Use SMS alerts--especially for subscriptions
While SaaS and subscription companies are becoming increasingly popular in China, consumers are still getting used to agreeing in advance to make recurring payments for products. A best practice, especially when working with Chinese consumers, is to send an SMS reminder (or even better, a message on WeChat) before taking a recurring monthly or annual subscription payment. Chinese consumers tend to check their SMS and WeChat app more frequently than email.
6. Understand the culture of buying
Customers in China also like to scrutinize products from many different angles before making the decision to buy them. Take a look at Alibaba's numerous e-commerce platforms -- especially Taobao -- and consider increasing the number of product photos as part of the shopping experience.
In China, there's an accepted norm of haggling down prices. Unlike eBay, where prices go up in an auction, prices on Chinese websites like Taobao might start high and get negotiated down. Don't be surprised if some consumers write in to customer service and inquire about discounts.
7. Increase support
Given the widespread popularity of WeChat and other real-time tools in Alibaba's e-commerce ecosystem, Chinese consumers have come to expect near-immediate responses from the businesses they purchase from. They also often expect to build a relationship with the seller before making a purchase. Consider incorporating a chat feature on your website for real-time engagement and use customer support tools to automate responses.
Additionally, with miles between businesses and their customers, coupled with cultural and language barriers, spending a little extra time to set up your internal customer support platform can go a long way. For example, creating rules to filter Chinese consumer inquiries and address issues quickly with commonly addressed FAQs will help businesses better cater to Chinese buyers.
As the global business environment grows evermore complex, success for any company's cross-border China strategy isn't guaranteed. Those best placed to compete will be the businesses that understand the nuances of the Chinese consumer market and local regulations, build the right partnerships and develop their core operations with a global mindset.