With global expansion a key priority for many retailers, we’ve been helping these brands understand new markets. Rakuten Marketing’s Daniel James recently interviewed Alex Hart from 55Haitao which is China’s largest shopping guide and forum for cross-border shoppers. Alex shared his expert insights on how to reach Chinese consumers through social media platforms, influencers and, freight-forwarding. Read on for some of the highlights from the interview.
Can you give us some background on 55Haitao?
55haitao is a cross-border loyalty shopping platform for the Chinese to connect them with North American and European retailers. The word ‘haitao’ actually means ‘cross-border shopping’ in Chinese.
What does average Chinese consumer looks like in 2018?
The audience of our site is primarily female (between 60-70%) aged 26-40. They are mainly interested in shopping in the health, beauty and fashion verticals.
They have two key motivations for cross-border shopping. The first is authenticity as the Chinese market often is associated with fake goods – especially in the luxury vertical. Whilst these products are mainly found in markets, there have been reports of fake luxury goods even finding their way into the inventory of designer stores. This concern means that Chinese consumers’ prefer making cross-border purchases directly from an advertisers’ website to ensure that the goods they are purchasing are authentic.
Their second motivation is cost. When North American and European retailers launch in China – their products often cost double, or even triple, the price in the U.S and rarely run discounts. Savvy Chinese consumers have realised that they can purchase the same products overseas at half the cost as they would in China – even including the cost of shipping.
You’ve stressed the importance of authenticity; how can marketers incorporate this into their strategy to reach Chinese consumers?
Working in the cross-border space allows advertisers to speak directly to Chinese consumers and therefore prove their authenticity by having their name brand behind them.
Moving into the Chinese market is very challenging due to lots of moving parts. It’s key to be able to control your inventory and guarantee to consumers that goods are authentic in order to motivate shoppers to buy internationally.
Could you tell us more the importance of influencers in the Chinese marketplace?
Influencers in China are called KOLs which means Key Opinion Leaders. The main platforms they use to engage their followers are WeChat and Weibo. WeChat is a very popular messaging app in China which actually does a lot more than just chat – you can also use it to call cabs and purchase items. Weibo is similar to Twitter but in the last couple of years, the platform has focused more on supporting KOLs. I’ve seen many brands focusing their strategy on social media and KOLs in China which has delivered some great results with their products gaining a lot of traction.
To cater to this trend, we have built our own influencer platform called Shoplooks. In addition, we have a dedicated team in China who understand the market and are working directly with the KOLs. We already have 150 KOL partners who we’re actively working with and in talks with an additional 3,000. The CPA model for KOLs is still new in China, but it’s something that we’re helping to educate them on. As our partners work with Shoplooks they are seeing payoff and it’s helping us to scale and build the platform. We have high expectations for Shoplooks and we hope to really build on our success in 2018.
How do you navigate advertising regulations for influencer marketing in China?
In countries such as the US and UK, consumers are increasingly questioning whether influencers’ posts are authentic. This isn’t so much of a concern in the Chinese market. Chinese shoppers are aware that if their favourite influencer is promoting a bag, they’re most likely being compensated for and understand how influencer marketing works. Because of this, there also isn’t that the same push for transparency that we’re seeing in other markets and KOLs don’t need to claim their posts as ads.
How can advertisers get started in the Chinese market and reach consumers?
A lot of advertisers are worried about cannibalising the sales that they already have in China. It’s important to remember that Chinese shoppers are savvy. They understand the benefits of cross-border shopping to obtain products at a better price. Therefore, don’t restrict Chinese cross-border shoppers as they will find a way to purchase their desired goods – even if it isn’t from the advertiser directly.
Working with a partner such as 55haitao means that you have full visibility into cross-border sales. It’s a great way to assess demand for your products in this market without setting up bricks and mortar stores, shipping inventory and navigating the complex Chinese market. We have a local account management team and an office and staff in China who are able to provide expertise in this market. We encourage advertisers to explore cross-border shopping with our support system and expertise to help them succeed.
Can you tell us more about the trend of freight-forwarding?
Freight forwarding has gotten a bad reputation among advertisers for being associated with fraudulent purchases often in Eastern Europe. We recommend smaller Chinese freight forwarders to our shoppers because direct shipping to China often has quite high taxes. Smaller freight forwarder providers can navigate the market without having to worry about the extra tax.
Fraud is another key concern with freight-forwarding services. We’ve done a lot of research and interviews with our users and discovered that many of them are part of cross-border shopping groups on WeChat. When a user finds a good deal on 55haitao, they will send a message to the group to see if they are interested in purchasing to save on shipping costs. When advertisers see one order containing multiple orders of the same product, it is often flagged as fraud when it’s actually just an informal buying group.
There’s a lot of misconceptions about the Chinese market, but part of my job is to educate our partners on how the market works. I encourage advertisers who are interested in tapping into the Chinese market to reach out with any questions that they do have.