Taobao

Taobao: a key to the China market?

Focus on the best strategy to enter online shopping market in China, through a Taobao shop. See see why a Taobao shop is an excellent tool to establish a brand in China and how it should be used.
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Taobao: a key to the China market?

This article will focus on the best strategy to enter online shopping market in China, through a Taobao shop. First, we will see why a Taobao shop is an excellent tool to establish a brand in China. Then we will discuss how it should be used, especially about:

  • Referencing
  • Community Management
  • Brand Image

The Taobao platform is one of the best symbols of e-commerce huge development in China. This leading online buying shop, founded in 2003 by Alibaba, offers about the same service that EBay: consumers to consumers sales. If a company wishes to sell product in China, the good platform will be theoretically Tmall, owned by Alibaba as well. However, today, it seems particularly profitable to enter China market through Taobao. As it became a major actor of China e-commerce, Taobao seems to be an obligatory step in China. But why and how to develop a Taobao shop when you want to enter China Market?

Enter the China market through Taobao: Why?

According to market research firm Daxue Consulting, at the end of 2013 there was nearly 620 million of Internet users in China. This means 54 million new users in one year. Online shopping has experienced a spectacular growth as well. In 2013, Chinese consumers bought for $213 billion, which is very close from the $250 billion spend in USA yearly (China will become the first Internet market in the world in 2014).

When it comes to practical issues, enter China market can be much easier and quicker through e-shop, and especially a Taobao shop. Indeed, online shop enables you to do not encounter usual barriers of outlets, as stock issues, cost of rent and strategic localization. Moreover, for foreign brands, it is always tough to enter in a distribution channel in China, as most of them are quite hard to understand and not very open for innovation and integrating foreign products.

According to the potential of China online market, its practicality and its fast development potential, the Taobao will be the best tool to enter China market easily and to establish your brands as a leading brand, able to enter physical and online distribution channel further.

Develop your brand in China through a Taobao shop: How? Referencing

One of the major difficulties when you launch a product on online shopping platform in China is to find the good keywords. Referencing on China’s Internet, on Taobao or Baidu (local Google) for instance, require specific specificities which are different from Western Internet.

Mainly there is less importance given to the natural indexation, with a strong demand for investment on the keyword with biggest competition. Therefore it will be very difficult for a new comer on the market; as it does not have the same financial power than the biggest companies. Then it will be useless to only translate your keywords used in your country as the competition could be too strong. The best solution will be to choose very specific keywords, with less competition, or also long tail keywords.

Mainly, as it will be difficult to develop your business through high ranking on Chinese search engine, you will have to focus on other leverage of growth in China: build a community and a strong brand image.

Community Management

Even more than in Europe, Social networks are very popular in China. Then, before see Taobao as a selling platform, you should see Taobao as a platform where seller and buyer can meet each other. Thus, for a foreign brand willing to enter China market, it will be relevant to develop interaction with buyers, to create talk and to favor exchanges to become more than a simple seller. Open some account on local network as Sina Weibo, Renren or Wechat will be crucial as well.

Mainly, the taste of Chinese for sharing opinion and talks might be used, with the creation of dynamic topics publically open. In China, it is a usual practice, as a topic which leads to a lot of discussion will draw a lot of new potential customers, who will react and follow the discussion and then be exposed to the brand products. Some brands even use celebrities to launch some topics of discussion.

That is how some Chinese industrial giants – as smartphone manufacturer Xiaomi for instance – developed their popularity in spite of extremely low marketing budget.

It is the best way in China to become viral, visible and gain popularity as a new comer and to improve the launch of your product on your Taobao shop (which is, of course, linked to all your social networks).

Brand Image

Finally, another specificity of Chinese consumer is the importance of trust toward brands when it comes to the purchase. Chinese consumers are, even more than westerners, extremely sensitive to safety of their purchase and, of course, this criteria is even more important on online shopping.

For a new comer among China e-commerce, it should be a big issue. Indeed, trust can be gained only with time and the development of the brand image. Unlike the cliché about China market, which says that everything which are cheap and attractive can be sold in China, we will recommend to set up a moderate marketing activity, highlighting the product specificities instead of the brand. Mainly, logistic and product quality issue will be crucial, as any misstep can lead you to restart from scratch.

To learn more about the China market and Taobao shop visit our website: http://daxueconsulting.com/market-research-china/

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