If you look at China e-commerce success as a puzzle, most brands (and individuals) come to me and they’re confused.
They don’t know what to focus on, so they have all of these different things they consider really important. Some people are focused on inventory and logistics and merchandising. Others are focused on ERP, some are on marketing, some on design. You know they’re missing the biggest piece, the most vital component…activation.
The missing link is your activation level. It’s the delta between people knowing about you and people buying from you; your brand strength. I’d like to leave you with a quote. One of my favorite quotes from Jack Ma: “When confronted with new opportunities, people tend to lose out in four ways: they don’t see it coming, they turn their nose up at it, they don’t understand it, or they’re too late to adapt.” Well, I can keep it really simple for you because I’ve seen it hundreds and hundreds of times. Focus on activation, focus on resonance, focus on strength, and you can’t go wrong.
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When I talk to foreign brands about the speed at which the Chinese marketplace moves, they often find it inconceivable. Companies that haven’t done business here have no idea the level of INSTANT customer service that Chinese consumers take for granted.
Let me give you an example…not too long ago my wife ordered a TV. We were living in Shanghai and it was Saturday morning. All of a sudden there’s a knock at the door. We weren’t expecting anyone, so I was curious. I opened the door and there stood an installation crew with a TV. I’m told them,” Oh, you guys must have the wrong address.” They were insistent, “No, no, no. You ordered this, you ordered.”
I was baffled, I hadn’t ordered anything, so I asked my wife if she had ordered a TV. She said “Yes, but I JUST ordered it. I literally JUST ordered it.”
They come in the apartment, set up the TV, set up my modem, my cable, my internet, my Apple TV, my VPN and Netflix. I was watching my favorite show on Netflix, streaming it through the VPN only two hours from when my wife completed the purchase. Two hours. Do you know what I paid for that? Zero. It was free. Only in China…
China E-Commerce: Your Category Can Make or Break You
I was recently talking with a friend of mine who had questions about the online market for beauty products in China. I shared with him a principle that applies to almost all types of consumer goods being sold online in China – your category often determines how hard you’ll have to work to succeed.
Let me give you an example. Through research, we noticed that home kitchen/appliances is absolute gold. It’s hugely underserved and is super-fast growing right now. We’re talking to a couple of cookware brands, and the nice thing about that category is that very few brands are selling these types of products in China. So you actually have way less competition, which makes achieving success so much quicker and easier. In the beauty category, the sheer number of brands coming into China & the level of competition makes it hard to win. If you were launching a new product in China, which category would you chose…the one where you’re up against five other brands or five million?
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Some of the most powerful companies in China have been disrupted in the last year by new, innovative brands. The thing the innovators have in common is something that seems obvious, but is often overlooked…defendable brand equity.
What does that mean? In my world, it means brand strength…the magical delta between awareness and purchase intent. When you hit that tipping point, there’s really no one that can stop you from accelerating and becoming dominant in a category. It’s interesting because it positions you so that if you are already unique in some way, you can now build a real business here that has legs and will stand the test of time.
And that’s the big thing right. Because in China you’re going to sacrifice a lot to be here, but when you have a combination of brand equity and a resonance with the population it really solves most of your problems. It’s the framework you want to think about…whether you’re in fast food or luxury handbags. This formula is proven to work across nearly all sectors.
When it comes to data reporting in the world of running Tmall stores, everyone is still living in 1999: Putting together Excel or Powerpoint reports manually. We are no exception. These reports are time consuming for us to prepare and difficult for our clients to view.
The worst part is that something as simple as this is one of the largest obstacles blocking progress in growing a store.
That’s why we’re moving our reporting to PowerBI, a Microsoft Business Intelligence software, and away from manual Excel and Powerpoint reports. This is a long overdue solution that our clients needed.
Here’s what that looks like:
What Tmall reporting looks like today:
Excel and Powerpoint files are being passed around by email. These are prone to error and take a long time to prepare.
There are both technical and administrative limitations that prevent people from using any of the BI software available on the market.
There are very few Tmall analytics apps that can give a birds-eye view of the entire store. You’ll need to visit a few different apps to see all the crucial data points.
None of them provide APIs for fully automating reports. You might get a small subset of APIs, but not enough to get an overall view of your store.
None of these analytics apps are in English, so it’s very difficult for non Chinese speakers to access, especially because of a complicated user interface.
Business logic in Tmall is quite different from what most Westerners have in mind. That makes direct translations from Tmall analytics apps very confusing.
To overcome these limitations, most of the industry consolidates data from various sources through manually collecting them into Excel or Powerpoint files.
Time for Change
We saw a real need for change. We can’t solve all the limitations, but we can solve enough to make the reporting clear and time efficient… both for us and for our clients.
We’ve standardized our reports and made the data always available from a single location: Microsoft PowerBI. The data is as secure as Microsoft’s cloud services.
Everything’s available in English. We’ve turned reports into dashboards where you can get a clear bird’s eye view of a store’s performance. The data points that really matter are all visualized in simple charts.
But we didn’t rob users the flexibility to go analyze the granular data points. All the raw data is available for download as excel exports.
Our goal is to help brands succeed. We want this to help our team direct as much time as possible to building each brand’s ecommerce success.