Planning to enter the Chinese market? Timely considerations minimise your risks and help you succeed.
FirstShotz, is a no risk digital marketing and distribution agency based in Shenzhen. Their business development manager, Christine Tan shares her 5 tips on product strategy in China.
Entering the Chinese market is complex. Investors have found it not only difficult but also costly. In this highly competitive environment, marketing needs significant resources.
However, the Chinese market cannot be ignored. A burgeoning middle class with increasing purchasing power. More and more sophisticated consumers are transforming retail and other sectors. Ignore China and you miss out on opportunities. That is why it is of paramount importance to get your product strategy right.
Recommendation 1: Set the right price
For selling on WeChat for example, a top limit of $50 USD is recommended, even if the product has already been selling in other markets above this price. Selling at a discount will help you establish your product, because Chinese consumers are famously price sensitive, except for the luxury brand sector of the Chinese market.
There are certain categories of products where you may be able to price higher, for example
- where there is a high growth of sales in a product category. One examples are health and beauty products. This sector is growing at 12.8% per year in China, more than double the global average.
- and goods with low price sensitivity in China: air purifiers are one example.
Recommendation 2: Seasonal considerations
Sales of goods vary depending on the season everywhere (think Christmas in the USA, Europe). Seasons highly impact sales but they’re different in China.
We believe the best times to launch your product is at Chinese New Year, on Single’s Day and after the summer vacation.
So inform yourself when these take place, since they change every year ( China uses a different calendar).
Up to two weeks before the summer vacation holiday, people travel from the big cities back to their home towns. The holiday lasts two weeks. Postal services and logistics companies close for ten days or more before the holiday. Your products will simply not be delivered during that period.
Instead try to launch your products earlier in the year before the vacation, or after the holiday when sales pick up.
Local companies see an increase in sales at holiday time. Seasonal products such as sun creams, UV protection etc are in higher demand.
The highest sales of the year occur on Single’s Day, comparable to Black Friday or Valentine’s day. Product launches at this time experience higher success rate.
Recommendation 3: Unique Selling Points (USP) of your products
Establish a credible narrative for your product. Present it as a unique solution to a problem or a need, with a strong back story. Stories sell in China and are excellent tools for marketing materials.
A good example is Whoosh, a laptop and computer screen-cleaning product, which had success from day one, despite thousands of competitors.
Before launch, strong branding was implemented, with catchy marketing focusing on the product’s unique qualities. Whoosh won the innovation award at 2014’s Consumer Electronics Show and earned them a unique partnership with Apple. As a foreign brand with high perceived value, they were able to push their USPs and became that year’s consumer success story.
Having a partnership with a multinational is not a prerequisite …. endeavour to promote the unique features and / or the problem solving attributes of your product. The key message is just how different your product is from the rest.
Recommendation 4: Study the Legal Regulations for Certain Products
China, as elsewhere, has a set of regulations which govern which products you can or cannot import and sell. Inform yourself as to what these are.
For example, spray products that have compressed air are considered explosive. Most companies are not allowed to import them. However, there are solutions.
Established importers may have the correct licenses and authorization. Consider using them to get your products to the marketplace.
Recommendation 5: Consider altering your product to meet local tastes and requirements
Some products may be market ready and need no alteration. For others, you may need to tweet them to satisfy the needs of Chinese consumers.
Clothing is one sector where there needs to be adjustments to garment size to match local size charts. Chinese consumers do laundry more frequently in smaller loads in smaller living spaces, so washing machines tend to be smaller.
If you take into account local needs and habits, you will see that your product that sold well in the West will need certain changes to adapt them to local preferences. Consultation with your Chinese acquaintances can easily solve this issue.
To summarise, consult the local talent pool and follow these recommendations and you are more likely to succeed in China. Every international market carries its own set of risks, but a little forward planning and market research goes a long way in China.
Source : www.firstshotz.com