E-commerce in China unstoppable

Siebe Gerbranda

The Chinese economy regularly makes headlines overseas. While in previous years it was all about growth and opportunity, recently all the international news outlets can talk about is struggling stock exchanges, a volatile currency and growth rates slowing down.

The negative trends in the market are without a doubt very significant and have implications on business in China. The extend and impact depends largely on the nature and set-up of your business. I can elaborate for many hours on the trends and developments we experience here on the ground. But maybe it is best to let the numbers talk and refer to the experts to predict the longer term developments in China.

New China Playbook

For that I can highly recommend to take half an hour out of your day and read the New China Playbook that was released by BCG. It gives some great insights into what you can expect from the Chinese marketplace in the next years.

“E-commerce, especially mobile, will transform the marketplace.”

Your Challenge

With our partners and clients I have many discussions on what all this means to business strategy. At The George we fundamentally believe that everything starts with a sound and well thought through positioning of the brand. The Chinese consumer is ever more critical and overwhelmed by choice; she doesn’t inherently need or want your product. You’ll need to convince her, tell a good story and show real value. This starts with having a clear understanding of your target audience, their needs and touch points.

This all couldn’t be better summarised than by BCG in their last paragraph:

“It will be more important than ever before for companies to be highly strategic in the way they pick targets. The days are over when demand in China for virtually anything seemed insatiable. Even though overall consumption will continue to boom in China over the medium term, targeting the wrong income segment, playing in the wrong categories, and being underrepresented in the fast-growing online channels will be a formula for slow growth.”

“The encouraging news is that it is not too late to develop a winning Chinese growth strategy. The product preferences and brand loyalties of the upper-middle class and affluent are still being defined. With China’s economy entering an important transition phase, the ride over the next five years is unlikely to be smooth. The winners will be the companies that pursue sound strategies that are in tune with the forces of change—and stick with those strategies despite the bumpy road ahead.”

The key to your success in China

Too often I hear clients and agencies start their China strategy by looking at tools; ‘Can you set-up a T-mall shop for me?’, ‘Can you help me with cross border e-commerce?’ or ‘Please build me a WeChat store’. While these can all be valid parts of your strategy, this approach is likely to fail. The tools only become relevant after you know 1) who you want to talk to, 2) what you should tell them and 3) where you can find them. You start with a razor sharp positioning to build your brand and from that the tools will automatically follow. How this is done? drop me a note and let’s discuss.

Siebe Gerbranda

Siebe Gerbranda

Agency Director Shanghai

Siebe is heading the Shanghai office and Asia operations. Prior to joining The George, Siebe was the Sub-Saharan Africa Lead for Google Business Development. He supported the commercial expansion across Sub-Saharan Africa, developing new operations in countries like Kenya and Nigeria. With cross-industry experience in multiple emerging markets he understands the challenges for global companies to develop digital propositions for a local audience.