Sell Bags in China via E-Commerce is a great idea

Sell Bags in China: China has now evolved as a land of younger and more sophisticated shoppers with immense fondness for luxury bags. China’s Millennials are tech-savvy, educated and well-traveled individuals representing 415 million, or 31% of the total Chinese population and they are emerging as the new target market.

“The Chinese customer is becoming a lot more global, and has thirst for newness” said Andrew Keith, president of Lane Crawford, the high-end fashion retailer.

Chinese shoppers are accounted for 30 percent to half of the world’s luxury purchases.

While Bain & Company sketched, that share of the global luxury market of China decreased by one percentage in 2016, but still Chinese shoppers are one of the most important shoppers worldwide for the global luxury industry, and will continue to be in the coming year as the upper-middle class rises across the country.

Demand for Luxury Bags in China

The demand for luxury bags can be estimated, when Mr. Bags managed to sell 1.2 million RMB ($173,652) worth of designer handbags in just 12 minutes. On Valentine’s Day, Mr. Bags collaborated with Givenchy to promote its limited edition pink Horizon handbags, available exclusively on WeChat to his followers, who he refers to as “bagfans.” All 80 pieces, each priced at 14,900 RMB ($2,170) were sold out almost instantly.

Market for Luxury Bags in China

According to data from previous years, Chinese luxury travellers love to shop abroad, but this year, mainland China saw more domestic consumption. This has been due to several key factors, including the Chinese government’s crackdown on grey-market smugglers, changes in tariff policies for travellers, importers, and cross-border online sellers, luxury brands’ decisions to match their China prices with global product prices, and the Chinese government’s development of duty-free shopping, reported by Financial times.

During an interview Ms. Chen, the Beijing-based managing director at the marketing consultancy Simon-Kucher & Partners said, “The rapid development of China’s mobile e-commerce can certainly, to some extent, promote sales of luxury goods”.

Is E-commerce a suitable channel to sell bags in China?

Customers that opt to shop both in stores and online tend to spend five times higher than the ones that opt for any single medium, stated by a representative of Lane Crawford.

The digital space in China is likely to grow and international brands have the opportunity to engage more Chinese customers directly online. Well- known brands, Burberry opened a store in late 2014 on Tmall.com and quickly gained popularity among Chinese consumers.

Mobile shopping has become increasingly important, with mobile sales estimated to have grown by 51.4 percent year-on-year to reach $505.74 billion in 2016 (based on preliminary data). If the momentum remained consistent they’re expected to grow by 45.7 percent in 2017, making up 61 percent of all e-commerce sales, according to China’s Ministry of Industry and Information Technology.

Solutions to Step in China’s E-commerce Market

There is enormous opportunity but due to cultural barriers, language difference and strict e-commerce platforms policies it gets challenging for International brands to enter Chinese market. However, there are two vital approaches to enter and be successful on Chinese E-commerce platforms. Branding and presence on well-known e-commerce platforms.

Branding is Everything in China

Before targeting Chinese consumers, it is advisable to understand the culture of China’s closed ecosystem. Several International brands experienced negative impact on the brand image when their marketing campaign went wrong. Therefore, first step after market analysis is Branding!

“You need to ensure that your local campaign is consistent with the brand image but also relevant to local consumers,” said Louis Houdart, founder and global director of branding and design.

Therefore, it is helpful to partner with local digital agency as it is skilled to find a “sweet spot” between the International brand value and preference of Chinese consumers.

Presence on Chinese E-commerce Platforms

To enter e-commerce market of China International brands must learn policies of following digital platforms.

TMALL or TMALL Global

TMALL holds the biggest market share in e-commerce market of China at 57%. It mainly focuses on premium brands. This characteristic makes TMALL most expensive e-commerce marketplace in China. It provides an opportunity to International brands to open exclusive online stores and directly sell products to Chinese consumers without being physically present in China.

TMALL has invitation-only policy where only qualified international brands can either be invited to join or can apply through a local marketing agency. For more information on how to sell International products through TMALL, please contact local digital marketing agency.

E-commerce via JD.com

JD is China’s largest online direct sales company. It relatively has less market share than TMALL.com. International companies can open individual online stores on JD.com and brands are permitted to import food, beverages, apparel and shoes from overseas. JD’s cross-border service enables suppliers to sell directly to Chinese consumers without a local presence.

JD.com is less expensive than TMALL.com. JD.com has a zero tolerance policy for counterfeit products.

 Haitao Web Interface?

There are several cross- border websites that cater international brands. Chinese consumers prefer buying imported food products from Haitaos. To learn about which Haitao is suitable for you brand please contact local marketing agency catering International brands.

Taobao

Taobao is owned by Alibaba Group. It offers largest C2C e-commerce marketplace in China. Taobao allows registered or non-registered businesses to sell directly to consumers. Establishing a store on Taobao is virtually free but the online marketplace is ruled by small sole sellers who compete fiercely on price and honesty and authenticity is an unwritten rule of their trade ethics. Sellers with low budget and low quality products opt for this platform.

WeChat E-commerce

WeChat is engrained in lifestyles of Chinese consumers. It is all-in-one-app which integrates social e-commerce seamlessly. There are three types of service accounts available for promoting business on WeChat.

Wechat Store

WeChat Service Account is considered the most suitable for business and organisation that aspire to access advanced WeChat Official Account. Service accounts allows more APIs (Minisite) and companies are enable to build their own store through which it can manage its products, orders, display of its products, and customer complaints. For more information on how to manage Wechat store, International companies are advised to partner with expert Digital Marketing Agency, that is willing to apply for an Official WeChat Account on behalf of the international company.

WE BELIVE IN ROI = E-COMMERCE.  This strategy has made our customers extremely satisfied and proved us as a reasonable choice for them.

Would you like to sell bags in China’s E-commerce market, and learn about the ideal strategy? You can reach us for friendly discussion and learn about your brand’s prospects in Chinese E-commerce market. Our Digital Marketing agency provides, International Brands with tools that are optimal to unlock this enormous market to earn their full potential and multiply sales with millions of users. If you are interested in exploring Chinese Digital E-Commerce platforms, reach out to us for a customised advice.