China’s cross-border e-commerce sales channel has provided Australian businesses with unprecedented access to the staggering scale of the Chinese market. Yet there have been some costly mistakes that others should avoid repeating, writes Kate Walker.
While much attention has been focused on the extraordinary success of a handful of brands, the list of moderately successful brands is long. Longer still is the number of companies who have been financially and emotionally exhausted by the China market.
Sitting on the frontline of China’s cross-border e-commerce and bricks and mortar retail sales channels, I’ve witnessed first-hand the highs and lows of Australian brands in China, garnering some unique insights into some of the common mistakes brands make.
Being clean, green and safe is no longer enough
Very surprisingly, Australia’s favourite — clean, green and safe — export slogan may now be one of them.
The principles behind the clean, green and safe value proposition is still entirely relevant; however, the window for relying on these credentials alone is long over.
Chinese consumers and trade are now seeking far more sophisticated value propositions.
The Chinese consumer must come first
With the availability of big data, the advent of new retail and the connectivity of China’s digital generation, successful brands invest in understanding who the Chinese consumer is, what they need, what’s trending and what’s next.
Coupled with a need for more supply chain and marketing agility than most Australian brands are used to, keeping the Chinese consumer front and centre by even some simple adjustments to a brand’s messaging and visual identity can greatly accelerate success in China.
There’s still a lot of opportunity for Australian brands, noting some key differences between Chinese and Australian consumers in the skincare category, for example.
Australian consumers prefer natural products with built-in sun protection and environmentally friendly packaging. We like authentic, relatable and fuss-free communication.
However, in China, our brands are competing with the scientific wizardry of Korean brands, trust of Japanese brands, heritage of European brands and the celebrity of US brands. There’s a need to stand out in China, and knowing how to maximise marketing spend takes experience and expertise.
Most new brands just don’t have the budget or patience for this learning curve.
Case studies are the golden ticket of export strategy
Learning from the good and bad experiences of other brands as well as from other categories is a big part of our approach and something we advocate for our companies, at a brand, industry and government level.
While no two brands are the same, there’s a commonality within an industry or category that is often overlooked by the brand itself, and the result is often a misconception that a brand’s export journey, too, should be unique.
While the value of first-hand export experience is tremendous, the cost of acquisition can be unimaginably high.
Conversely, aligning with other brands, industry associations or experienced export partners can help fast-track a brand’s success, thereby delivering a far better long-term net result.
Ignoring the closeness of the Australian and Chinese markets
Finally, while the China market may feel a world away from Coles, Woolworths, Amcal and David Jones, thanks to the magic of digital, Chinese consumers and trading partners can and will cross reference just about anything you have to offer — pricing, packaging, social media images, messaging, ambassadors — quite literally at the click of a button.
Therefore, if a brand does find itself in the increasingly unavoidable situation whereby your export cost price is close to, or heaven forbid, actually higher, than your massively discounted RRP this month at an Australian retailer, then you should expect that your Chinese consumer, after quickly cross-checking your TMALL Global price against the Australian domestic RRP, may not be very forgiving.
In this situation, the best-case scenario a brand could hope for is that the consumer will WeChat their friend in Sydney and ask them to buy your product off-the-shelf and post it to them in China.
Worst-case, and a far more likely scenario, however, is they’ll take multiple screenshots to support this sorry tale and share it with a few thousand friends on Chinese social media, as well as post a review on Little Red Book to be shared among a mere 200 million of the world’s most powerful consumer cohort.
Not a short-term, quick buck market
Brands that invest time into understanding and respecting China, its culture and its population, achieve far greater long-term success.
From differences in the consumer palate to the population’s digital and e-commerce interconnectedness and in business, complex cultural hierarchy to the rapid changes to trade agreements, it pays to work with China market experts when entering this region.
Kate Walker is co-CEO of United Brand Group (formerly Clean Food Co), a sales and marketing consultancy for Australian businesses selling into China.