China presents an amazing opportunity for Australian e-commerce businesses. Here are five steps to get your business China-ready, from China Sales Co. expert Robert Burns.
1. Do your research and analysis.
Check if your brand name and domain name are already trademarked, as this could radically affect your plans. Most people have no idea of the level of competition in China. Look to see who is “winning the game” in your sector right now. Your competitors may have the market sewn up and it becomes a battle for market share. There are other barriers to overcome too, with paperwork and licenses, including ones for imported goods, which need to be completed before you can do business in China.
2. Give your website and products a makeover.
Don’t try to force your foreign product or message onto the Chinese market. Customise your brand face – your packaging and your website – and do it with your competition in mind.
The main mistake we see Australian and New Zealand businesses making is jumping the gun – launching before their China face is ready. Others try to cheat on the translation, using services like Google Translate. That’s really silly, as Google doesn’t work well in China and the translation is very poor. Quality translation is essential.
3. Use the local social networks and web resources.
Once your China face is ready, register on the Chinese internet, Baidu, Weibo, Alipay and China UnionPay. Remember, you can’t change your China face once your application to the Chinese internet has been accepted – if you want to make significant changes, you’ll have to start again. That also goes for imported goods, for example simply changing the design on a tag or label can mean “back to square one” with meeting customs and import requirements.
For e-commerce in China, internet speed is a big issue. You need to look at your website structure and consider where your content is hosted and delivered. The Chinese firewall slows things right down, even more so if you have a shopping cart. If you’re selling products, ideally you want your website hosting to be in Hong Kong or inside the firewall in mainland China.
4. Start selling your products / services.
In China, approximately 80 per cent of research, 52 per cent of internet viewing and 30 per cent of online purchases are done on mobile phones. So, a mobile-friendly website is essential. (China Sales Co. offers mobile-SEO-optimised platforms.)
If you’re selling products for export, you do need a Chinese point of return for unwanted goods. Most businesses will also need someone based in China to answer the phone and to run your business presence and in-market CRM. Providing good customer service will help you achieve greater popularity with your new customers.
5. Actively market your business.
As in all markets nowadays, you need to run campaigns and SEM to drive traffic to your website. The costs of gaining “new eyeballs” for your product can vary, depending on the current level of activity from your competitors. For example, the pay per click (PPC) costs for advertising tourism related key words can increase 500 per cent in the lead up to Chinese national holidays. Costs can then drop quickly after peak season has ended.
Chinese payment options and logistics
For payments, you can have a point of sale in China, which allows you to accept money but means the business must be able to issue Chinese tax receipts (fapiao) and will need a Chinese bank account. You can engage a Chinese business to represent you.
Alternatively, you can attach a Chinese payment gateway to your site. China UnionPay is more expensive but settles funds immediately. Alipay doesn’t settle funds immediately but settles once its balance reaches the equivalent of AU$6,000, which isn’t viable for some businesses.
China has a good postal system and a booming delivery industry. Alibaba has its own logistics systems, but you still need to have your paperwork in place and you need to get the products there.
Who’s doing business in China?
Robert Burns says that, across the board, he believes less than five per cent of Australian and New Zealand businesses have day-to-day operations with China. “Roughly less than five per cent [of Australian businesses] have Chinese web pages and this needs to change.”
“There are two categories of businesses we advise,” he says. “The first category is already selling in China and may even have an office and staff there. For these clients we provide Chinese SEM (digital marketing campaigns and consulting. Often, this may be because the business owners are Chinese themselves.
The second category is people offering services to the Chinese from outside of China. For instance, education, tourism or travel providers based in Australia that are doing business with Chinese customers. Increasingly, because of migration, local lawyers and accountants now also want a Chinese web presence.
“Sometimes, business people join a trade delegation, go over and meet some people then come back and wait for the phone to ring. On the flipside, Chinese business people might visit, looking for investment opportunities. Either way if there is no Chinese content on your website the sales often “stops there” because the customer just can’t read what they need to make their purchasing decision,” he says.