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Enter the dragon’s den

Fashion retailers looking to take a share of China’s huge market need to understand its online players.

The Great Wall of China is one of the most impressive feats of construction in the world.

But when it comes to ecommerce, the wall is tumbling down as the Chinese continue their relentless embrace of commerce and capitalism and their march towards owning a plethora of Western brands.

However, before UK fashion retailers charge into the Dragon’s Yuan (Pronounced UN, and sounds a little like Den!), there are a few issues they need to be aware of.

Take product size, for example. The northern Chinese are larger than the southern Chinese. And in general terms, they are all a different size and body shape to UK consumers. Therefore fashion brands might require a different size block for China.

Another ongoing issue relates to the ‘grey market’ and counterfeit products. You’ll find a plethora of these on any online Chinese marketplace.

However, the key players such as Tmall are doing a lot to eradicate this.

From a pricing perspective, there is a lot of discounting of branded products, some of which is exacerbated by grey market and counterfeit goods.

Retail sales are a staggering £1.3tn per annum and are growing at 15% annually, and luxury sales by 35%. Much of which is being driven by the younger consumer, whose average age is 34, as they have higher discretionary spend and want to show off their success in the new capitalist economy.

The dominant players in the online sector are Tmall and Tbao marketplaces, both part of the Alibaba Group, turning over £100bn.

While you are likely to have a brand site, if you’re seriously thinking about entering the Chinese market online, then you have to have a presence on Tmall, as that’s where you will drive most of your sales. This is the leading business-to-consumer site in China.

There are 400 million buyers there and 70,000 international and Chinese brands. The international brands include the likes of Forever 21, Mango, Levi’s, G-Star and L’Oréal.

You can be on the site in less than a month once the paperwork is done. So it can be a relatively quick process to get going. However, you will also need a local partner to help you enter the market. You must have that local market knowledge to help you with logistics and fulfilment, customer service, translation, marketing and so on.

From a marketing perspective, you have to have a strong presence on social media as 44% of Chinese use social media to inform their purchasing decision. Chinese consumers do their homework, so they need to have a strong degree of social proof before they buy from you. Unlike Western consumers, they’re not impulse buyers.

From a search perspective, Google doesn’t come into the picture. Baidu is the local market search leader; however, most consumers will begin their search for products on Tmall as opposed to Baidu.

Shopping guides and key opinion leaders are another key route to marketing your brand in China. The Meilishuo.com blog has 11 million visits every day.

The moral of the story is that China needs to be on your roadmap.

But as Lao Tzu said: “A journey of a thousand miles begins with a single step.” It’s important that step is in the right direction.

Market essentials

300 million of China’s population of approximately

1.3 billion are regarded as middle class

5 By 2025, GDP in China will have increased five times

22 Number of new urban centres the size of New York being developed

500 million Number of Chinese people with access to the internet

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