It is no secret that the majority of online shoppers on Chinese ecommerce sites like Taobao, Tmall and JD.com expect to find good bargains. It is mostly true for Taobao, the leading C2C shopping platform, where price competition between sellers is most intense and shoppers’ top priority has been mostly low price rather than known brand. However, according to the recent data by Bains & Company, with the rise of branded ecommerce in China things are beginning change.
As this infographic illustrates, increasing number of Chinese online shoppers now put higher value on branded goods over lower priced generics. In fact, sales of not branded goods have dropped to 35% in 2014 compared to 42% in 2011, while sales of branded products have increased to 65%. This trend is certainly good news for foreign brands targeting Chinese online shoppers.
At the same time, the rise of branded ecommerce in China hasn’t been affecting every brand equally. In fact, the share of top brands sales has seen a slight drop of 2% while the sales of lesser known brands increased by 4%. Regional and pure online brands have shown the largest increase of 6%.
How to succeed in branded ecommerce in China?
The infographic gives the following advice:
- Build standalone online marketing and sales systems, supplemented with a small digital sales team.
- Integrate online and offline channels to improve consumer engagement;
- Rely on full-function digital team or an integrated team for online and offline channels;
- Disrupt established business models to create innovative, consumer-led products and experiences;
- Create project teams focused on multiple consumer segments.
Here is infographic: