#Digital Marketing China #E-commerce China #Fashion Brands in China #Luxury

How to Build an Efficient E-Commerce Strategy for Luxury in China?

Last modified: June 15, 2020
E-commerce

What makes e-commerce?

Online store platforms are flourishing from everywhere and are more and more specialized. B to C e-commerce sales worldwide is about to reach $1.7 trillion. E-commerce platforms are mainly selling apparel & accessories, but marketplaces are emerging for travel, discount, food & groceries, multi-products… there are platforms for every type of product and each consumer.

The Content should be user-friendly and luxury-oriented

The general design of the website counts a lot, especially in luxury. From the visual to the typography and the organization of categories, everything has to be designed for the dream. Indicate clearly the prices because this is what your customers want to see first. Bet on transparent pricing to show your customers that they have the right to know what their products cost to make. Don’t forget general important information such as the place of the factories, a “behind the product” rubric. You can also include storytelling by choosing a “from product to story” approach: product-focused or story-focused.

When it comes to luxury, it’s all about the experience

The user experience is as important as the design of your website. Pay attention to the drop-off rate, which is the number of visitors or attendees who left the conversion process without completing it. The drop-off rate shows you where prospects stop the sales process, often pointing out a weakness in your strategy. From visitors to customers, the average conversion rate is 1.9%, and the reasons for failed conversations are often the same: price, shipping costs, and offline purchase. Luxury consumers expect a real digital experience from brands operating online, it’s a matter of credibility.

The little secret to beat numbers

The most website asks their visitors to register before purchasing, in order to gather data from their clients. However, Amazon the giant American e-commerce platform created “the 300 million button“, allowing the visitors to continue instead of register. Check out as guests allow the customer to stay longer, increase promotion, and sales directly. It is a choice to lose some client data to gather away more benefits!

Set your marketing goals through the sales funnel

  • Awareness (early stage): generate traffic and brand awareness via blog posts, curated lists, email marketing, leadership, social media, and events…
  • Evaluate (middle stage): generate leads via case studies, analyst reports, webinars, best practice guides, newsletters, and events…
  • Purchase (late stage): convert leads to customers via newsletters, demos, trials, comparison guides, price sheets, smaller invite-only events…
  • Retain (customer stage): retain customers, upsell, advocacy via case studies, consulting services, client workshops, training, advocacy programs, product updates, tutorials, consulting services…

The flourishing business of drop shipping…

Most of the e-commerce platforms do drop shipping, consisting of producing once the customer purchased to not carry any stock. The margins are often very high, since the product produced in big quantities and sold in several websites at a time. Customers pay the product price and often the shipping is free, which makes it interesting for them to purchase on your website.

…may reserve some unfortunate surprises

The danger is to lose your customer’s trust, since they will think you sell your product at a very expensive price comparing to the production costs, so be careful if you want to try dropshipping. In fact, a lot of drop-shippers are offering the same product at the same price, and differentiate in this ocean of similar offers is really tough. In this field, the Chinese e-commerce platform Aliexpress is often quoted. In addition, offer free shipping is often more expensive than you first thought and can seriously reduce the margin, so it can be a lot of effort for a few results.

Free and quick shipping

  • 96% of customers are more likely to shop if the site offers free shipping
  • 83% are willing to wait
  • 357% increase in sales from returns

Implementing your e-commerce platform in China, from business data to communication

TMall e-commerce website main page

Handle business data

The average ticket (AT) represents the average amount your customers pay in one order; the customer acquisition cost (CAC) represents the money you spend to attract your customers. CAC includes promotion, advertising, special offers… The better scenario is the one where your AT is higher than CAC so you can invest in attracting more customers.

Optimize the customer’s lifetime value

Be smart by choosing to communicate on special operations (Valentine’s Day, Mother’s Day, friends referring…) or brand extension (product diversification, new shapes, or colors), offer free shipping, discount on minimum… to increase customer loyalty. Even if the return cost of your money out-of-pocket upfront, they increase profits in the long-run by increasing customer loyalty. You need to focus more on the customer’s lifetime value

Customer lifetime value = customer revenue - support costs x average length of relationship - support costs 

Promote your e-commerce platform in China

Attracting potential customers through digital communication is the best solution. You can talk inform them about discounts and special offers and then gain more opportunities to create new touchpoints. The best way to do it is to combine SEO on Baidu to appear in top results and beat the competition. Create accounts on WeChat and Weibo to follow your customers and get closer to them by making communication multi-channel and easier to succeed.

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