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How will the “Brexit” influence China?

“It could be the darkest day in the history of European stock market.”

“Brexit”, the abbreviation of “British exit” that mirrors the term “Grexit”. “Grexit” was created when Greece tried to exit the European Union but failed at last. And now, the Britain makes it.

“In current phase, we are not able to realize the result (of Britain leaving the EU). But definitely, the uncertainty brought by the vote result is an enormous challenge.” The CEO of Deutsche Bank, John Cryan said.

Although from the earlier public opinion polls, the financial market held a positive attitude towards the referendum, the final result really touches off a huge earthquake among the global market.

“This result will absolutely be a huge blow towards the process of European Integration!” the Chancellor of Germany, Angela Dorothea Merkel said this afternoon.

The European stock markets nosedived at the opening, especially the bank board. In the opening today, the German stock market decreased almost 10%; the British fell by 9%; the French decreased 11%; the Spanish dived 17%. The Portugal Stock Index 20 fell by 9% and touched the lowest level since 1996. And the FTSE 300 even recorded the biggest day slide on record.

Also, as the final result was announced to public, the British Prime Minister, David William Donald Cameron, declared that he will resign his position in October. “I will do everything I can in future to help this great country succeed.”; “I think the country requires fresh leadership. I do not think I can be the captain to take the country to its next destination.”

We respect the final choice made by British citizens for the European issue referendum

8153km, this is the distance from London to Beijing as the cross flies. How would the final result of this referendum influence China? What are the reflections of the Chinese?

The Chinese Ministry of Foreign Affairs said that the Chinese government and the citizens would respect the choices of British citizens towards this referendum. “China has consistently developed its relations with the UK and the EU from a strategic height and a long-term respective” Hua Chunying, spokesperson of China’s Ministry of Foreign Affairs, said this afternoon.

“China supports Europe in choosing its own way of development.” she stated, emphasizing that a prosperous and stable Europe is in the interests of all sides.

“China hopes the UK and the EU could soon reach an agreement on Britain’s exit“, Hua added.

And from the social media platforms (mainly Weibo), the citizens hold mainly 2 different opinions towards the final result

– “The Brexit is an absolute bull for China, it’s a God-given opportunity.” Dan Bin, the CEO of the Shenzhen East Haven Investment Management Co. Ltd posted on Weibo showing  a POSITIVE ATTITUDE:

“1. The European Parliament will refuse to recognize China’s market economy status. If Britain exits the European Union, Britain will no longer need to observe the resolution decided by EU. It can flexibly recognize China’s status and expand the trades with China. This is fruitful for both China and Britain.

2. Once Britain exits the EU, the western countries such as U.s, Japan, Europe, especially the Europe will inject unparalleled liquidity into the market. They will extremely loose the currency to avoid any crisis.

3. China should catch this opportunity to take back the liquidity, to go ashore and land the bubble of the Chinese real estate successfully. China can use this opportunity to get off the perplex from the sequel of the global financial crisis.”

In this comment, the publisher thinks that this is an opportunity for China to recuperate the domestic finance and expand the trades with Britain. He also says that this is a good thing to China, since the Europe always recognize China with prejudice due to France and Germany. A broken Europe will be benefit for China to seek for sally ports, in both politics and finance.

– But also, there are other voices that, once again, even being positive, are also MORE RATIONAL. From the comment of Ifeng news, there are 6 main effects towards China:

“1. The students studying in Britain can save tens of thousands of dollars
If UK exits the EU, the exchange rate of Pound will crash. Thus, for people to study or travel in UK, it would be a bull. Citigroup estimates, if the British exits the European Union, the exchange rate between Pounds and U.S. dollar will fall by 10% to 20%. For the UK students, the one-year tuition would be 1.5 million pounds and living expenses would be 10000 pounds. Thus, they may save 2.4- 4.8 million yuan per year.

2. The devaluation pressure of China Yuan increases
If UK exits the EU, the exchange rate of Pound will crash. Although, for people to study or travel in UK, it would be a bull, for the short term foreign exchange market, the depreciation of sterling will lead to the appreciation of the dollar, and will cause the devaluation of the China Yuan towards the US dollar.
Economists said Britain’s leaving could make the financial market panic, leading to the capital outflows in mainland China, increasing the devaluation pressure, and challenging the monetary policy management of the central bank.

3.  Yuan’s internationalization step will be disrupted
London has become the second largest offshore settlement center of China Yuan after Hong Kong. However, once the UK exits the European Union, the currency bonus will disappear. And the costs of strategy promotion in EU by Britain will also increase significantly. Chinese financial institutions need to consider dispersions to Paris, Frankfurt, Luxembourg and other places. This action will cost price.

4. Sino-EU trade cooperation will face a change
Some analysts believe that the economic impact of the British leaving EU may affect China ‘s exports, especially once the EU tend to adopt trade protectionist policies. Then, it will affect bilateral trade.
Once the UK exits the European Union successfully, the process to strengthen the strategic cooperation plans with the EU by the British will become difficult. The left is tantamount to breaking the invisible indirect cooperative ties between China and the EU, so that China had to choose other ways to press on with cooperation, and the impact from the various pre-bidding trade policies is also likely to be greatly reduced and become huge sunk costs .

5. No more ” the channel into Europe ” for Chinese enterprises
China has 500 million potential customers in the European market, however, due to protectionism, Chinese enterprises are often turned away. Britain is regarded as the most active countries within the EU which advocates free trade and investment liberalization. Thus, many Chinese companies will select the British as their production bases in Europe. And London will be recognized as a ” passage to Europe”. If Britain left the EU, may arise between the EU, the potential trade barriers between Britain and Europe will reduce the willingness of these enterprises to produce in UK. Some companies may choose to move to Brussels or Dublin, which are the areas have convenient and free market within the European Union.

6.  Chinese people will be on the window period for overseas house purchasing
In recent months, international investors’ enthusiasm for commercial real estate investments in UK decreased significantly, while the sentiment increased. Some industry insiders predicted that once the United Kingdom exits the EU, the house prices in UK will fall down. When coupled with the depreciation of sterling, it will further promote the real estate market volatility, which would be an excellent “window period” for Chinese investors. Some industry insiders said that since the supply and demand relationship is still the main determinant of UK property currently, the UK house prices are still optimistic within the next five years and expected to increase about 25%. This would be more profitable for investors focusing on long-term profit.”

our conclusion

Although the SSE (Shanghai Stock Exchange) composite index fell by 1% when closed, the Chinese citizens and market now are still having a positive attitude towards this result. As per the Chinese, as what we mentioned before, they respect the choices of the British, and also their democratic rights, or at least that is what we could see on the digital walled garden build within China.

How to Sell B2B Online in China

Last week we were in an event in Valencia organized by our partner, the Valencia Chamber of Commerce, in which we shared our knowledge about the B2B online business development in China in front of a full auditorium.

We were glad to share the “stage” with 2 of our best clients:

– Amvos Consulting: leading digital marketing agency in Europe and South America

– SoloStocks: best B2B online platform in Spain currently present in over 12 countries in Europe and South America

And that is what we talked about:

– WHICH ARE THE MAIN ONLINE B2B PLATFORMS IN CHINA?

As we can see in the top image chart, the clear winner in the B2B Chinese market is Alibaba with its domestic platform 1688.com which absorbs 37.78% of the market share as per April 2016, followed far behind by Global Sources (5.45%), HC360 (3.92%), Made-in-China (2.23%) and DHGate (1.77%).

– Alibaba.com/1688.com: Alibaba.com is the leading platform for cross-border wholesale trade, serving millions of buyers and suppliers around the globe and 1688.com is the main B2B marketplace for domestic China trade among small and medium enterprises.

– Global Sources: It is a leading B2B media company and a primary facilitator of trade with Greater China. More than 1 million international buyers, including 95 of the world’s top 100 retailers, use these services to obtain product and company information to help them source more profitably from overseas supply markets and generate sales leads and win orders from buyers in more than 240 countries and territories.

– HC360: is the third most important domestic B2B e-commerce operator in the People’s Republic of China. With its professional information services and advanced internet technologies, it has established a reliable demand and supply platform for SMEs, and has been providing them with complete business solutions over the past 22 year.

– Made-in-China: was developed and is operated by Focus Technology Co., Ltd. Focus Technology, is a world leading B2B portal, specializing in bridging the gap between global buyers and quality Chinese suppliers.

Since China’s policy of reform and economic openness, the B2B traditional model unlocked unprecedented levels of growth and development. With the Internet booming and the transition of trade models taking place, most industries have enrolled in the online B2B revolution to develop their brand. For this reason, hundreds and hundreds of new B2B platforms are born trying to differentiate from each other and creating that way an unparalleled war. And we see new attempts to get to the top of this pyramid, day in and day out, as they all want to get a piece of the huge cake.

– BUT, WITH SO MANY OPTIONS… HOW CAN I CHOOSE THE RIGHT PLATFORM?

We list for you the key factors that should be taken into account in order to select the best platform for your brand to sell your products in a business-to-business model in China:

– Establishments costs: Lower implementation costs through simple installation and integration and unproblematic expansion options. The vast majority of wholesale online trading platforms in China are “free” to use. You can create your own shop and list your products. That way you have your own B2B storefront in China; but how will your products get noticed within the others? All these places provide different visibility packages. Call it gold member, golden supplier or whatever other name you can imagine; the important thing here is to compare these packages and what is exactly what they offer.

– Volume: What is the number of suppliers and competitors? What is the traffic volume generated in the platform? In this area, 1688.com is the clear winner from both sides. Anyway, there are also other vertical platforms that might be worth checking.

– Chinese partner: In order to create a shop and list your products in any Chinese domestic B2B platform, you will need to go hand in hand with a Chinese partner as you cannot use your foreign business licence to sell products within greater China. Here it appears the classic dilemma: Chinese partners are usually very opaque and don’t like to share any kind of information. 2 Open, as a Chinese and Spanish company, can be the right Chinese partner with modern European-style management and creates a totally transparent relationship with its customers. We want to succeed with you and not the other way around.

– Promotional tools: It is important to analyze which actions can be done in order to get more traffic to your shop. The most of them offer performance marketing actions in a CPC or CPM model, both for keyword optimization and display actions. The prices are usually high and a study should be done to assure that the ROI is the right one.

In 2 Open, we usually recommend to do a market research that can lead us to take the best informed decisions: channel/s, range of prices, target audience, marketing budget and promotional efforts, potential return of investment, etc.

In another post we will show you how to optimize traffic within 1688.com to obtain more leads, so keep checking our blog and contact us if you have any questions. 2 Open can help you succeed in the Chinese B2B online world!

10 things you need to know to Build a Chinese Website (Part 1)

When planning to enter the Chinese market, one of the main points in every marketing plan should be the creation of a website that focuses on the Chinese consumer.

Naturally, there are some questions that come to mind…

• What are the differences between a western and an eastern website?
• What are the aspects that I have to keep in mind in order to trying to attract Chinese consumers?
• Would it be a good idea to just duplicate and translate my current content?

All of the above can be summarised in one question; what do I need to do in order to create a great website that will have the potential to reach the 675 million China internet users?

In this series of posts, we will try to give you some tips that will help you create a website for the Chinese market that will appeal to Chinese consumers and also match the style, tech and literary attributes of eastern consumers.

1 – Chinese Web Design – What the …???

When we look at a Chinese website, the first feeling we get is confusion… Language, structure, content … We can´t find anything similar to Western websites based (lately) on cleanliness and simplicity. Our China web design must be adapted not to our tastes, it must match Chinese consumer design taste.

If you have not navigated through Chinese websites maybe you don´t completrly understand what I mean. You´ll see easily the difference with these two examples. Taobao and Ebay, two B2C marketplaces (or C2C) from east and west.

Can you appreciate the difference in style, design, structure? I bet you do…

We can see a lot of information on Chinese site in contrast to the cleanliness and simplicity of the western site.

Our experience creating websites for the Chinese market has shown us some key points to understand and get advantage:

• Chinese websites use many more elements and are much more colorful than Western.
• Chinese language is different. It seems obvious… but there are things we have to consider about Chinese language such as:

1. There is not a capital letter in Chinese
2. There are no spaces between characters
3. Chinese characters are far more dense than our letters

• Chinese sites use a lot of animation, flashing texts and banners. This is clearly the opposite to our western websites where movement is disappearing. The reason can be it’s much harder to grab attention using fonts in Chinese than it is with western languages.

2 – User experience… Do they have any good one?

We have just seen as websites in China seem much more complex than we are used to. We might think that the user experience will be a nightmare, but Chinese user is so accustomed to information under this structure as we are to the western structure.

Chinese user is concerned about usability and user experience, but is used to webpages so busy usually does not care how the site looks. However the trend is towards simplicity and clarity on web pages. In a more European style.

Some of the highlights on Chinese websites regarding to navigation are:

• Chinese websites have a big number of links, however Chinese users do not like this system. This can be given by the low load speed internet in China.

• All this links use to open in other new windows. Why? Again it’s mainly an issue of speed. Internet access in China is generally slow, users have gotten used to opening new links while waiting for a page to load.
• Keyword search box as a navigate tool. Link system is not comfortable for users because they can be lost due to the big amount of links. For this reason, on Chinese websites keyword searches have to be really efficient, and the search bar must be top accessible.

3 – Hosting & ICP. DIstance matterS

The one who said that, in internet there is no distance, did not know about China. If you are not (legal and/or physical) in Mainland China, easy staff like finding the right hosting can became a little bit more complicated.

Let´s start from the beginning, one of the most common questions when we are going to create a China site is should we host our website within or outside China? Is there is a big difference? The answer is very clear, as far as possible we should try host the web in Chinese Mainland, and we will try to explain why.

China network structure is not the best, which makes the websites loading speed not the most appropriate. By hosting our web outside China this problem becomes much more serious.

Okay, so we are clear, we should host our website in China, now what? We must apply for a number of ICP (Internet Content Provider) to the Ministry of Industry and Information Technology of China. This is the ICP license that will allow our site to stay in Mainland China. Only companies with a physical presence in China can apply for this license (which usually see in the footer of the sites, as in our case).

For companies that do not have a legal entity in China, we do recommend looking for hosting solutions in Hong Kong, which can limit the problem of loading speed and make our site more accessible for the Chinese user.

Now that we talk about speed, even though the main problem affecting the same be the hosting (inside or outside) there are also other factors that can make our web go slower (and we have seen that it is a key point in China) as can be:

• Website images are not size optimized
• Poorly code in our website
• Low hosting quality (even inside Mainland China)
• Our site is using services blocked in China (Google Fonts, Google Maps, Twitter, Facebook, etc…) which prevents the page from loading

4 – Did you say… services blocked? … the Chinese Great Firewall

China not only has a huge physical walls to defend themselves (in the past). China also has a large digital wall, the Great Firewall. Originally known “Golden Shield Project” but ironically nicknamed Great Firewall, it is a censorship and surveillance project initiated by the Chinese Ministry of Public Security in 2003.

This project acts as a digital censor and block all websites that do not meet the content requirements that marks the Chinese government.

Here you can see some more information about how the censorship works.

Among other things, Chinese Internet censorship censored webpages that have content that include; news sources cover topics considered that are defamatory against China: such as police brutality, Tiananmen Square protests of 1989, freedom of speech, Taiwan Government, Dalai Lama or the Tibet Independence Movement International …

These sites are banned or are indexed to a lesser degree, if at all, by some Chinese search engines and have significant impact on search results.

As a result of this control in China they are blocked pages as usual for us as Google, Twitter or Facebook (it does no matter how much Mark go jogging in Tiananmen). Although great firewall control is easy to jump (using a VPN, for example) the difficulty of accessing these pages has made their use and popularity is low.

This means we need to be very careful with our website content, try to be sure to avoid Great Firewall content restrictions and not to use third party banned platforms like Google (Google Maps, Google Fonts), Facebook or Twitter.

5 – New Players & New Rules

So, no Facebook or twitter, how am I going to promote my website? China has a digital ecosystem different of everything we are use to. Surely you’re wondering how you survive without some of the usual promotional tools. Natural positioning in Google, PPC Adwords campaigns, promotion of content on social networks like Facebook or Twitter …

In China you will find new players who have occupied these gaps and in some cases, created new niches. These new players have taken advantage of the absence of foreign competition (Facebook, Google …), its adaptation to Chinese culture and peculiarity and in some cases even a strong government support.

These actors we found some “copycat“, certified copies of known systems, such as:

• Baidu, the Chinese search engine par excellence (suspiciously similar to Google)
• Weibo, the microblogging service (suspiiiiciouuusssslyyy similar to Twitter)
• Youku, video service (guess who it is similar?)

We also have WeChat, the jewel of the crown and the mobile app (almost an OS) that includes messaging, payments, calls, moments … and which we discussed in detail in another post.

For our website to be inside China digital life it must be adapted to the rules of these actors, common in the dailylife of the Chinese consumer.

So, who are the big guys that you need to be friend of?

As soldiers in a war, most of these tools fall into three large “armies”. These three groups are known as the BAT and are in constant battle to dominate the Chinese digital ecosystem.

In short, Baidu holds commanding market share over search. Alibaba holds to the same power over e-commerce. Tencent is the dominant player in social media. But they are constantly trying to invade their territory, in a very interesting war for any fan marketing.

One of the commonalities of the BAT is a full support of the government, together with its dominant position in the market, makes this status quo is difficult to change.

What does it means for our website? We need to adapt our communication to this new players, generating our social media activity through Wechat, optimizing our SEO for Baidu or 360, uploading our videos in Youku, adding sharing actions in our content with Chinese social platforms… anything we use to do in our occidental site does not help us here and can be even negative for our goals. As we have seen, if we keep on using tools like Facebook (post sharing options for example) we can be blocked by the Great Firewall.

Do you want to know more? Sure? CHECK THE SECOND PART OF THIS POST HERE

References:

http://www.china-briefing.com/news/2015/05/22/best-practices-launching-china-website.html
https://econsultancy.com/blog/67466-why-do-chinese-websites-look-so-busy/
http://www.latmultilingual.com/build-localized-chinese-website/

Sources:
http://www.freepik.com/free-vector/screen-with-a-website-and-icons_847180.htm
http://www.freepik.es/vector-gratis/trabajador-llorando_834598.htm

Do other e-commerce platforms stand a chance against Tmall?

All of us are very well aware of the magnitude of the Chinese online market and, although it is currently the largest e-commerce market in the world, most of the market share is owned by the Chinese e-commerce giant Alibaba. Nevertheless, there are some other companies that also want their piece of the pie and with their vertical e-commerce platforms they are starting to put up a fight. This article will focus mainly on those vertical platforms that constitute an important part of the diverse Chinese e-commerce environment.

In the 4^th quarter of 2015 China’s online transactions surpassed 644.38 billion RMB, the pie chart shown bellow contains the market share of the top ten Chinese e-commerce platforms:

Before we continue, we first have to clarify the concept of vertical e-commerce. In this context, vertical refers vendors that offer goods and/or services that are specific to an industry or customers with specific needs. A vertical e-commerce platforms could be a independent brand or a specified category within a wide range of products such as clothes, 3C (computer, communication, and consumer electronics) products, cosmetics, etc.

If you already have a basic understanding of the Chinese e-commerce market, then you are probably familiar with JD.com. Currently the second e-commerce platforms in China after Tmall (owned by Alibaba Group), JD.com started as a 3C products vertical B2C website. Now, let us take a look at the market share of 3C products in China B2C online market:

Although Tmall is still on the first spot, the difference in market share of JD.com is considerably higher than with regular products. Tmall and JD.com combined own more than 80% of the Chinese 3C products market. Suning, on the 3^rd spot, and Gome, on the 4^th, both also started specializing in 3C products, however, nowadays they have also diversified their range of products. At the end, it seems that there are no actual vertical platforms anymore.

To study the online market, we cannot miss the biggest category, clothes. In the 4^th quarter of 2015, the total transaction of clothes is 235.57 billion Yuan, market share is shown below:

In this case, Tmall is leading with an absolute advantage of almost 3/4 of the market share. In this category, JD has 8.7% of the market share, VIP.com has 6%, and surprisingly others do not even have 1% individually, so from the big picture the vertical market for clothes is not active enough.

Another category that has had such a rapid growth we cannot ignore is the maternal and children products. Shown below is a pie chart containing China’s maternal and children products market share figures of major competitors in the last quarter of 2015:

The most noticeable difference in comparison with other categories is the porcentage own by other platforms that adds up to almost 20 %. Although Mia, Beibei, Babytree and others are in that 20% it is still a big figure.  In this category Tmall and JD.com own less than 70 % of the Chinese clothing market, so we can say, to some extend, that there is still space for vertical players.

The next category is books and, even though the books total transaction was just 5.31 billion Yuan, the market share gives us a slice hope of competing with general platforms, in this case Dangdang is leading with 43.8%, and Tmall is only on the 3^rd spot, just after JD.com.

Finally, we cannot say all vertical online platforms are dead in China just because most of the categories are gloomy, there are still some worth a try, and you just need to know enough about the current situation. If you don’t, luckily you saw this article, and you know 2open can always help you to find the right channels. So don’t hesitate, contact us now!

All in all, even though Tmall dominates in the Chinese market, there is still space for other platforms to flourish. Vertical e-commerce platforms seem to be the wisest option, specify in a certain category, gather information about the current situation in the Chinese market, and carry out your business plan. If you need further information about the market, would like to help you find the right channels, or want us to set up your business in China, do not hesitate in contacting us. Our group of specialists will happily assist you.

This article was edited by Andres Arroyo Olson from 2 Open.

References.

All products data from

http://www.analysys.cn/yjgd/17684.shtml

3C data from

http://www.analysys.cn/yjgd/17676.shtml

Clothes data from

http://www.analysys.cn/yjgd/17678.shtml

Children products data from：

http://www.analysys.cn/yjgd/17680.shtml

Books data from:

http://www.analysys.cn/yjgd/17681.shtml

L’Oreal Digital Marketing Campaign in China

In the first half of 2015, L’Oreal’s financial statement reported revenues of 12.82 billion euros worldwide. In comparison with 2014, there was an increase of 14.7%, which is the fastest growth that the company has had in the past 20 years. Its digital marketing campaign was not the exception, with an outstanding 40% increase in online sales, exceeding 1 billion euros; it represented 5% of the company’s total turnover strengthening its position in the online market.

Nowadays, in the cosmetic & beauty industry, 70% of customers search products online before they actually buy them, which means that social media must play a big role in this. Why? You might be wondering, well, the importance of knowing consumer’s needs and preferences enables companies to come up with tailored ads and maximize their marketing budget. Many industries have transitioned from the classic marketing model into its modern version to further understand consumers and optimize results.

It seems that the upcoming era is digital, the society now is constantly connected with their mobile phones, and people are interacting on social media all the time. Most Chinese people love to share moments of their daily life via Weibo or Wechat, these social mobile applications gather a lot of Chinese young people who are potential online buyers, this is one of the main reasons why this new consumption model results so profitable.

Taking all of this into account, L’Oreal, the global beauty brand, keeps track of trends and maintains strong competence in the Chinese online market. The business credo for the marketing industry “where are the consumers, where are we” is practiced well by L’Oreal. In fact, in the digital marketing revolution, L’Oreal is not only expanding its e-commerce channels, they also apply a complete strategy to digital marketing.

All the product and services have to be digitalized

For instance, on the CES conference in Las Vegas, L’Oreal released a patch for sun-induced skin damage – My UV Patch, helps users track real-time ultraviolet exposure damage on the skin with the help of an App. In addition, L’Oreal has also launched a mobile App called Makeup Genius. The App can help users find their own appropriate makeup. Most Chinese people are shy and they do not dare to try exaggerated makeup, with this App users can try hundreds of makeup options and share on various social platforms. In the future, L’Oreal will try to launch more service-oriented App.

-L’Oreal APP for IOS

Digital involvement into every step of decision-making

In the buying decision process, customers experience 4 steps: identifying, considering, purchasing, and sharing. L’Oreal gets involved in every step of the process. For brand awareness, they launched a video advertisement on the entire media platform of Weibo and Wechat. For the decision-making stage they issued a series of makeup tutorial videos on Youku and finally let the users use social media to share their purchasing experience. With this, the entire consumer decision-making process is digitized.

-L’Oreal official account on Weibo and Wechat

Take this case for example, in the 2015 Cannes Film Festival; L’Oreal launched a video advertisement on Wechat, where L’Oreal’s stars would post their pictures and voice message saying “I am in Cannes, will you come? ” and a link to L’Oreal’s e-commerce page. Through this event L’Oreal attracted a lot of fans and potential customers, and the brand’s social influence was digitalized.

-L’Oreal Cannes Event on Wechat

All brands on digital platforms

Based on the first two points, L’Oreal Group including Lancome, Maybelline, L’Oreal Paris and other brands, try to position themselves, as much as possible, on various digital platforms, that is, “where are the consumers, where are we”. Since, nowadays, almost all of the customers are online, L’Oreal has to be searched and discussed as much as possible by customers in order to gain more popularity in the digital world.

-L’Oreal brands on Weibo

When analyzing L’Oreal’s digital marketing strategy, it is worth noticing that this giant enterprise takes digital marketing as a key element of responding to the rising demand among beauty consumers. The O2O (online-to-offline) model gradually drives the enterprise transforming it into a new business model. Digital marketing could not only develop a new market but also help to create a new CRM (Customer Relationship Management) system for other companies. We believe in the future and Chinese digital marketing will become more and more important in the following years.

Have you learned Chinese yet?

If you have any questions or require any information about our services, please do not hesitate in contacting us, our group of specialists will happily assist you.

This article was edited by Andres Arroyo Olson from 2Open.

2Open with Chinese E-commerce companies and Spanish suppliers

In 2 Open we like to be updated. We are constantly attending events that are related to our business scope (Digital marketing and E-commerce in China) so that we can have all the relevant information on the current situation in order to provide our customers with the best posible services.

In this case, 2Open attended a networking event in Spain that involved Chinese e-commerce companies and Spanish suppliers.  The topics covered in the event were related to E-commerce and Digital marketing strategies, more specifically, to the different ways brands have to adjust their products so as to sell them through e-commerce platforms with particular emphasis on the booming of Chinese cross-border e-commerce, its advantages ,and the new fiscal legislation that will be implemented starting on April 8^th.

Apart from the information exchange, we were glad to find out that some of our clients (SoloStocks, Amvos, Ecoficus) also attended the event. We also had the chance to talk with other brands who are interested in selling their products online in China and/or doing Digital Marketing to improve their performance.

All in all, it was a pleasant event filled with interesting people finding new opportunities. If you want to know how we can help you to maximize your Sales & Marketing efforts in the Asian giant, please do not hesitate in contacting us. We will be more than happy to talk about your current goals and situation and provide you with the best solutions for your business needs.

This article was edited by Andres Arroyo Olson from 2Open.

Digital Marketing in China. Where do I start?

Hosted by Tolmao Group, the networking event “Digital Marketing in China. Where do I Start?” took place on January 2016 in Shanghai. Luis S. Galán (the CEO of 2Open) was invited to talk about Cross-border E-commerce and the benefits it can bring to a company.  Although it is called a networking event it also features educational elements in order to provide a better understanding on how to take advantage of business opportunities in China. Where do I start? How does cross-border e-commerce really works? Is is really growing? These were the questions on everyone’s mind before Luis stepped onto the stage.

Luis Galán has a deep understanding in the matter, due to the services that 2Open provides, he deals with e-commerce and all of its subcategories on a daily basis. The talked focused on the process of cross-border e-commerce, the real current situation about it and opportunities that might come with it. The crowd showed a lot of interest, it seems that this is an area that everyone is trying to implement in their own businesses and so there were a lot of questions from the audience.

• What are the procedures to do cross-border e-commerce in China, especially how can i deal with payments?
• How can I start social media marketing for a beginner?
• Comparatively, what are the digital marketing advantages over traditional marketing?

These were some of the questions asked by the audience and they were not left unanswered. After the talk, the networking event continued and some people approached Luis to ask about experiences and tips on the topic, the place was filled with kind, ambitious, and knowledge-seeking people that are looking forward to engage in the way business works in China.

Some of the answers to these questions have also been covered by 2Open in past articles from our blog, however if you are looking for any specifics or have some questions related to our services feel free to leave a comment. We will be more than happy to help you with any enquires you might have, and who knows, we might just dedicate a whole article to your question.

 

2Open at the Avante Awards

 

This last February 2Open was at the Extremadura’s Avante Awards Ceremony that took place in Badajoz (Extremadura, Spain). This event is held every year since 2013 and it recognizes and commemorates Spanish companies from that region who have had success in international markets. Not only do they award companies who have had an outstanding performance abroad, but also encourages people who show talent, effort, creativity and innovation to position themselves at an international level.

 

The event aims to incentivize Spanish companies from the region of Extremadura to export value outside of the country, companies who are featured in this event are companies who have had a struggles, obstacles and cultural barriers and have managed to overcome them. 2Open is a proud contender for this award in 4 of its 5 categories which are the following:

• Extremadura Exporta “Trayectoria”, This award focuses on the trajectory of the company. The obstacles and difficulties it had to overcome to gain its position in the foreign market in which it operates. Mostly, it rewards effort, persistency and success cases of a company’s path.
• Extremadura Exporta “Innovación”, This award is for companies who have innovated in someway. This could be by implementing new processes and/or techniques in its exported products or services as well as ways to penetrate a foreign market, differentiate themselves and gain competitive advantage.
• Extremadura Exporta “Joven” , This award is for the young entrepreneur or business man/woman who has managed to be successful at an international level.
• Extremadura Exporta “Agroalimentario”, this category is for the companies who have successfully exported food related products from the region of Extremadura to other countries.
• Extremadura Exporta “Conocimiento”, this award is given to the company who has had success in other markets by transferring knowledge and expertise. This is a new category for this third edition of the Extremadura Avante Awards.

Exporting is an unknown adventure for most companies but day by day, these companies overcome fears and obstacles and Extremadura Avante thinks that they should be awarded for that. We could not agree more, it is not an easy task, but companies like 2Open will encourage other to reach that so desired international level.

We would like to thank Extremadura Avante for giving 2Open a space in its event and for helping other companies to go abroad.

Jumpstart your E-commerce business in China

E-commerce in China is growing so rapidly and it appears to have big rewards for those who manage to thrive in the market. Problems for companies who want to enter China arise due to limited knowledge about the Chinese market and the variety of e-commerce platforms, but how exactly should you start your e-commerce business in China? Where should you start?

 

Indeed, there are countless B2C (Business-to-customer) e-commerce platforms in China, Tmall/Taobao are in the leading position, followed by JD, then VIP.com, Suning, Gome, Dangdang, YHD, Amazon China, and so on. Usually each platform has a deposit, some annual fees, and commissions. If your are starting your e-commerce business opening a Tmall/Taobao shop first would be a smart move from your part, later, when your business grows, you could extent and broaden your sales channels. You might be wondering, Why Tmall/Taobao? Why here and not in other platforms?

 

Firstly, let us look at this from an investor’s point of view, minimizing initial investment. For a Tmall shop different products and shop types have different deposit amounts that range from 50,000 RMB to 150,000 RMB. The annual service fees are 30,000 RMB or 60,000 RMB depending on the category, they may be half or totally refunded if the business is good enough to reach certain revenue. As for the commissions, different categories also have different commission rates, commissions in Tmall start from 0.5% to 5%, this is quite competitive since other usually range from 10% to 15%. After all, Tmall is mainly an open platform for all vendors.

Some small companies or cautious companies should consider starting with a Taobao shop. Taobao is supposed to be a C2C platform, since its requirements, compared to the ones of Tmall, are considerably lower, some small companies opt to start with a Taobao shop first. Why is this option so appealing to small companies? There are two types of Taobao shops to choose from, the first one is owned by a person and the second one is owned by a company. The personal Taobao shop can be upgraded into a company account if the owner is the legal representative or a shareholder. The best thing about Taobao is that it is free, you only need 1000 RMB as the deposit and Taobao has no annual fees or commissions. For those who are really cautious or lack resources, this might turn out to be a wise choice.

 

Secondly, let us analyse the human resource factor. You might have agencies working for you or maybe a few employees; however, trying to start with all channels at once may not always be the best option for your business. To successfully manage an e-commerce shop it takes dedication and time, even though opening a shop is not a difficult task, managing that shop is. Analyse, optimize traffic and content, and increase sales is something that requires time and focus. The target is to turn those open channels into productive channels, it is worth mentioning that most of these e-commerce platforms are similar or even copy Tmall/Taobao, so getting familiar with platforms is kind of like getting familiar with the e-commerce industry in China.

 

How is the e-commerce environment looking in China? Tmall/Taobao have been leading the free traffic in China for years, each day there are more than 40 million visitors on Taobao. Even Suning, Dangdang, YHD and Amazon China now opening their shops on Tmall.

As for the payment side, Taobao/Tmall have their own payment method, Alipay. With more than 0.3 billion registered users, 0.27 billion active users, and links to over 180 banks both in China and other countries, Alipay is the largest third party online payment platform in China, some active users even use Alipay to pay for their home power, gas and water fees. It makes it easier for consumers to pay.

 

Finally, let us discuss product control. Since Tmall/Taobao are mainly open platforms, vendors have almost fully control of their products. You can categorize the type of product your selling, upload or remove it anytime you want and also have full control of the price and logistics company you want to use to deliver your products.

 

So if you are planning on entering the Chinses market through e-commerce you might want to start with a Tmall or Taobao shop first. Here at 2Open we specialize in digital marketing and e-commerce, our goal is to understand our clients business needs, in order to provide the best possible services.  If you have any questions or require any information about our services, please do not hesitate in contacting us, our group of specialists will happily assist you.

 

This article was edited by Andres Arroyo Olson from 2Open.

 

References:

https://guize.tmall.com/?spm=a2177.7731966.0.0.5PNEgl

2Open on Spanish radio: Business in China?

Recently, we were invited to a local Spanish radio program called “Onda Cero” in Cáceres City. Vicente Pozas, the host of the show, asked some interesting questions to our colleague David González regarding Digital Business in China. For a lot of people in Europe, China is a far away land with a different culture, different people, and different ways to make business. People are getting interested in China, it has had a huge economical growth in the past few years and interest of foreigners has grown accordingly.

The talk mainly focused on China’s development in certain technological areas, the business opportunities it offers, and the considerations that have to be taken into account if one should intent to do business in China. David González talked about the differences in population of major cities in both countries and the way e-commerce in China has surpassed any other country in the world. He also stressed the way the Chinese middle-class people have gained more purchasing power and how all of this can be translated into a broader potential market for any business.

After throwing out some interesting figures about China, he talked about failure and success cases that foreign companies have had when trying to enter the Chinese market, the limitations and the room for mistakes that exists in the country, and the complexity of making business with a Chinese businessperson.

Although the talk focused mainly on China and the way they make business, David got the opportunity to talk about 2Open, our business values, and the way we carry out every project with passion and commitment. The complexity and the obstacles that a business in China could present and how a company like 2Open can make the whole process a lot simpler and successful.

Here is the audio of the interview with David González on the Spanish radio show “Onda Cero”, sadly the audio file is only available in Spanish, but if you have a particular interest on it please leave a comment and we will post an English translation of it.

 

This article was edited by Andres Arroyo Olson from 2Open.