Planning your Online Strategy on a Cross Border Platform - Things to Know

With President Xi’s mandate on imports driving the next wave of economic growth in China, every foreign brand that does not have a legal entity to sell in China, is hustling to enter the cross border eCommerce space, if they haven’t already.

All those mind boggling numbers achieved on a big promotion day like double eleven creates a certain sense of urgency in the board rooms of organizations that chose to stay away from the China eCommerce landscape until now. And in no time a very senior member team is put together in order to steer the China eCommerce strategy. And off they go to the most promising platforms to get started with their own winning (?) journey.

The CBEC (cross border eCommerce) platforms offer the nimblest solution for new market entry both from an investment as well as an operational point of view. However this assumingly light model comes with its own set of unique problems. The most important of them being the brand’s complete dependence on a third party service provider- who will be more or less in charge of driving the business on behalf of the brand.

The success of the brand more or less depends on the quality of the third party service provider (TP) as most brands do not have an office / expertise required for running a CBEC business. This calls for the TP to have a through sense of what the brand’s objectives are. For most brands their business on the platform is a way to garner enough sales to understand consumer preferences before they plan the next move in China. There is also this conflict that the brand until then having worked in a traditional retail environment is all of a sudden expected to understand/work in an all-digital platform that calls for unique digital strategies to position, reach out and sell to prospective customers.

The digital retail landscape in China is a far cry from anything traditional retail stands for. And most organizations struggle to build a fool proof platform strategy that best suits their businesses’ needs. From setting actionable strategies to executing operational details, the problems encountered are many. Not having a common language to communicate with their TP’s does not make things any easier.

There are times when well-known/successful brands (in their home market) are advised that they will need to invest in brand marketing to educate the consumers on what the brand’s positioning is. It is a first for the brand, especially for large retailers who have a great offline presence and intend to enter China with their private labels. Marketing a private label is something they have never considered as something worth investing time into. It then takes very senior management to approve such investments. Some brands come in the hopes of introducing their best sellers in their home market and expect this strategy to be an instant success, only because they fail to understand the consumer preferences are nothing like what they see in their home market. All this going back and forth takes longer than expected and many a times when speed is the single most determining factor in market capture, only the fast movers get to be successful.

Here are a few thoughts shared on how brands can successfully circumvent these issues.

1. See things through the eyes of a Chinese Consumer.

Shake off your notions about China and come with a mindset to embrace a new view on things. The consumer preferences in this side of the world may surprise you. The average consumer can be defined as aspiring millennial with a certain budget to try out something they have not done so far. Obviously they would expect the purchase to make them happy and their association with a certain brand that is perceived well by people who they look up to (read KOLs).

Question What is my brand/product’s key value proportion to China that KOLs will endorse to the masses in China?

2. Who is in charge?

While the TP team will help you execute your day to day operations, it become important that there is a representative from the brand side (who understands the brand and positioning). This team/person should be in charge of constantly educating the TP on the brands positioning, checking to see if the operational plan is aligned to achieve the strategic objectives set for the year.

Question: Do I have a capable person/team that is assigned specifically to look after the operations in China?

While these are not the only questions to be answered, I would say having clarity on the above two aspects is the first step towards building a successful business on a cross border platform. With the laws on imports becoming ever more lenient China is probably at its welcoming best to all who wants to do business. The opportunity definitely outweighs the challenges. It is about picking the right partner and knowing the direction you want to take for your business.