Read more about the market entry in China
Taobao is Asia’s largest network retail business, founded by Alibaba group investment in 2003. It current business includes C2C and B2C (business to individual). Today, Taobao has also become the most used online entrepreneurship platform and is quite popular among China’s business member. Our focus today is on How to sell on Taobao?
Why it can be interesting for a foreign brand to sell on Taobao
1. China has a huge potential of online shopping users
According to China Internet Network Information Center (CNNIC), the number of Chinese Internet users reached 618 million in 2013. It shows an increase of 54 million new Internet users from 2012. The Internet penetration rate in China also climbed to 45.8 percent at the end of last year, compared with the rate of 42.1 percent in 2012.
When it comes to the online buyers in China, the growth is even more spectacular. Last year, Chinese shoppers spend $213 billion online and China is about to become the biggest online market in the world, ahead of the U.S.A ($225 billion in 2013). The Chinese Internet retailing market has increased at a spectacular 70% average annual growth rate since 2009.
2. Taobao shop business has low cost and low operating risk
The concept of online sales includes no inventory pressure, space limitation or management risk. Online business breaks through the traditional business obstacles as a logistic issue, place rent, storage and personnel management fees. This will reduce the cost for the seller on a per product basis and then reduce the final price for the consumers. As commodity prices are the most important influencing factors of consumer choice, compared with the traditional shops, Taobao shops have absolute advantages in the operating cost and operating risks. This significant advantage of Taobao shop will naturally attract a large number of consumers quickly; Taobao shop business can be very profitable for market entry in China.
To open a store on Taobao is also the opportunity for a foreign brand to quickly adapt its strategy according to the consumer reaction and the information gather about this specific market. Indeed, an Internet marketing strategy is much easier to adapt than a strategy of distribution in physical shops. As enter in the China’s market includes some risks of strategic mistake and cultural misunderstanding, selling on Taobao can be a good opportunity to reduce this risk.
3. Taobao Alipay, the Secure Payment System
Like Taobao, Alipay is a service founded by Alibaba group. It is an independent third-party payment platform looking to provide a “simple, safe and fast” solution for the Chinese e-commerce online payment. Its system is quite simple. The buyers pay the product when to purchase it by sending the money to Alipay. Then it waits until the product is well-received by the buyer to pay the seller. This system enables the seller to be sure to get paid and it guarantees to the buyer to get the product after paying the price.
However, the aim of this solution is not only to ensure the safety of users online payment, but at the same time let the users from both side, buyer and seller, build up mutual trust through the platform, to establish a pure Internet environment in accordance with Chinese business culture of trust and friendly relationship.
Practical Marketing Strategy on Taobao
1. Pay attention to your keywords
Our online shopping experience tells us that when we want to go to specific online purchase goods, we will firstly look at the website homepage. But more usually, if you want to look for specific goods, you will use the “search” bar. This is where keywords you have defined for each product will be important.
However different buyers who search the same goods may use different keywords. So how your Taobao shops can more efficiency appear in the search page results? Some researches about the most searched keyword can help you to define the best keywords.
Keywords can be the brand, the model, the product features, the promotions, the product characteristics, some adjectives, the shop name, the credit rating, the credit rate … Thus, these keywords can be developed with a wide variety of combinations such as store name + brand + model; Promotions + commodity characteristics…
2. Use Opportunely your community
Before being a shop, Taobao is a place where buyers and sellers can meet each other. By animating your community of users you will reinforce their loyalty and will make the networking between buyers and sellers easier. By posting hot discussion topics you will step up attention rate, create awareness for your shop, improve natural views and extend your business.
Secondly, cause hot discussion posts will be reproduced into the Taobao community and further into the Internet to become viral, Taobao shop would be more likely to be found by the buyers. Moreover, to multiple quality posts can make your shop appear more professional and gain the trust of the buyers.
3. Develop attractive promotion
To buy the best goods at the lowest prices is the path of every consumer. Price value is still the most important factor in determining demand for goods. Thus promotion seems one of the most effective ways to attract buyers.
Taobao offer a specific solution of promotion activities. Indeed, it shows a page with the best promotion offered in the Taobao shops. If goods can appear in this page, there will be a higher chance of being chosen by the buyers.
Another solution to offer relevant and efficient promotion with your Taobao shop is to take advantage of festivals such as Valentine’s Day, Christmas, New Year’s Day, Spring Festival and the most important for online shopping, the Single’s Day. These festivals are marked by a significant increase of online shopping in Chinese households. Offering special promotion during these days call lead a foreign brand to make a great entry on the market as well as showing a good expertise of the China’s culture and customs.
4. Gain the confidence of your potential customers
The corporate image is an important factor to influence consumer behavior. In a virtual online mall, this statement is even more important.
Even if the low price and an attractive communication can temporarily blinded the eyes of the buyer, poor quality of goods, service, and the publication of false information will contribute to lose customers. Especially in China where the trust and the safety are culturally important criteria of decision.
Therefore the use of reasonable and effective networking marketing methods to run your own shops should be favored. It is the key to gain credibility and trust from Chinese online buyers.
To know more about the best way to sell on Taobao and other Chinese platform, contact us.