The next DTC frontier: China How to get China's shopping-festival addicted consumers shopping on your native eCommerce Website

The future of commerce is borderless. In the age of accelerated digital transformation, brands have been discovering the benefits of selling Direct-to-Consumer (DTC) at home and abroad, from higher margin, direct marketing, to better consumer experience and data access. One territory, however, few have ventured in is a DTC strategy in China.

Many brands abandon their DTC strategy for the market deterred by the dominance of marketplace giants, evident in Tmall and JD.com’s eye watering sales figures during shopping festivals such as Double 11 and 618. However, with the right technology, selling DTC in China from brands’ own website could easily become the next festive destinations the curious Chinese consumers have been waiting for.

The Ready Festival Goers

At the forefront of the global recovery are China’s consumers. The first few months of 2020 alone saw the addition of 92m new eCommerce consumers in China, more than the entire population of Germany, bringing the number of active consumers to 715m.

With international travel on hold, there are strong incentives for Chinese consumers to shop cross-border online. Savvy and adventurous, these shoppers look to indulge, mingle, and rediscover shopping in new cultural experiences. They understand the benefits of shopping cross-border, including reduced risk of counterfeit goods, access to full product range, and fair pricing.

What Has Stopped the Music so far?

Traditionally, brands are turned off by seemingly unpromising stats of traffic from China - high bounce rate, short dwell time, and poor conversion rate. However, this stems from the fact that international eCommerce websites are not traditionally built with Chinese consumers in mind.

Imagine excited music lovers trudging long and far, through muddy fields to Glastonbury Festival. Then due to sound system failures, speakers play the tunes at half speed. This is how Chinese shoppers experience 90% of global brands’ sites. If the concert happens to feature “technicians” from Google or other firewall blocked sites, the sound may not work at all.

The nightmare does not stop here - the lighting also goes out and the microphone is distorted. The fans have to move on, even if they had planned to stay for the whole set. In cross-border eCommerce, localised payment and trusted logistics options are the lighting and microphone to a music festival. Mobile payments accounted for 83% of all payments in 2018 in China, with WeChat Pay and Alipay accounting for 94% of all mobile payments. International logistics providers often are not licensed for cross-border eCommerce in China and an estimated 30% of parcels are stopped at customs, which require the consumer to pay additional fees to be released. However, brands rarely offer payment or logistics alternatives to these shopping revellers.

Let’s Get the DTC Party Started

Now imagine the same fans travelled to your stage at Glastonbury with jetpacks and all the lighting, microphones, and sound system worked perfectly. The experience was easy, seamless, and memorable - they had a blast.

In the age of digital trade, brands with the right DTC technologies equate to bands with the essential gear. To enable the global eCommerce experience of the future, Samarkand’s proprietary Nomad software suite is built to remove gaps between brands and consumers.

Our SaaS product Nomad Checkout reduces the barriers Chinese consumers face when shopping on international websites. It combines China specific solutions for payments, site speed optimisation, trackable logistics and automated cross border customs clearance to improve the customer experience. Alongside a better on-site experience, post purchase customer experience is improved through faster delivery times, clear returns process and reducing customs stoppage rates. Nomad Checkout is being used by both small brands and large multi-brand retailers, and thousands of transactions have been processed since its launch. Nomad Checkout can be implemented as a Shopify app or directly integrated with any eCommerce platform, meaning that international brands can now sell direct to Chinese consumers using their existing eCommerce ecosystem and no investment needs to be made into an additional stock holding or new eCommerce storefronts.

The next frontier of DTC festivals has started in China and it’s time to get the party started on brands’ eCommerce websites.

Author

Eoife Huo is Head of Content at Samarkand Group, a cross-border eCommerce technology and retail company.  Since 2016, Samarkand Group has been focusing on connecting Western brands with China, the world’s largest eCommerce market. Nomad, our proprietary technology platform, integrates across all touch points required for eCommerce in China. Its end-to-end solutions across technology, operations, and analytics enables the direct-to-consumer experience of the future for brands and retailers of all sizes.

To learn more about Samarkand, please visit their website and LinkedIn page.