On Thursday May 10th, regional leaders in supply chain and logistics gathered at the Cross-Border E-Commerce & Logistics Forum in Shanghai. Paul Stepanek, President, Complete Manufacturing and Distribution, was among the speakers.
Attendees benefitted from a comprehensive education on the latest trends and developments in legal/regulatory changes, import strategies, operational models, tax incentives, digital marketing and more—for companies interested in thriving in China’s dynamic business environment. Quotes from the speakers and takeaways below illustrate some of the more relevant information for companies trying to stay on top of China's dynamic e-commerce environment.
Top 10 Shanghai E-Commerce Business ForumTakeaways
1. “China is evolving from the factory of the world to the mall of the world,” and China’s consumers are interested more than ever in foreign brands.
2. There are two ways to sell cross-border: first, a China customer orders on a foreign website and receives a product directly, or a China customer orders on a foreign website or locally and receives the product from a China-based bonded warehouse. There are pros and cons for each. Bonded warehouse is often faster with fewer hassles for the consumer but requires effort (and patience) to negotiate and operate.
3. “With cross-border, long delivery times are the biggest frustration for consumers. China consumers are used to getting what they want in a day or two.” Products get stuck in customs, delayed in sorting centres, postponed by holidays, etc. Be proactive and send frequent SMS status updates to set expectations and reduce inquiries to customer service.
4. To test a brand, cross-border offers quick time to market. Paul Stepanek further added that “to sustain a growing brand over a decade or longer, consider a ‘East for East’ China operations base. Manufacture here, sell here - to serve customers faster and drive profitable growth.”
5. “A brand with a minimum of $30M USD in sales is suggested for cross-border. Less than that will stretch a company’s resources. Executive engagement with China cross-border initiates is mission critical."
6. Type in your brand in Taobao, the land of “suitcase traders” in the grey market. If you see your product and/or a derivative of your product, you may have opportunity for cross-border.
7. When choosing a cross-border partner, look for those with experience in key areas: customs clearance, strong relationships with local authorities. Ask for specific examples for how agents handle problems, escalations, and expediting.
8. Emerging big data tools help companies protect brand experience and reduce delayed shipments to customers. Data analysis finds outliers and artificial intelligence compares how long each step in logistics should compare to best practice.
9. Don’t let China’s big e-commerce platforms dictate your terms. One cross-border brand leader’s business practice is to offer everyday low pricing and never discount. That’s not the cultural norm for China’s e-commerce customers, or the platforms that serve them, who may demand discounting. Hold your ground and be true to your brand.
10. A marketing strategy that works in one market may be very different in China. A premium leader in plush stuffed animals is positioned as toys in the rest of the world. Half of their sales in China, however, are to young women looking for a fashion accessory, thanks to celebrity endorsements. It’s important to be agile.
Considering a China e-commerce program? Get a step-by-step guide to driving e-commerce revenues in China.