After our book tour, and a string of recent wins, we’re proud to say that ExportNow has been receiving increasing attention in the news. In addition to features on USA Today and BusinessWeek, which we’ve previously covered here, we are very pleased to be getting coverage in the Chinese media, in addition to the US media.
Today’s roundup includes some of the various Chinese websites that have joined us in our journey to help bring US Businesses into the world of Chinese shopping online.
Though our western readers may be less familiar with media sources from China, we feel it is important to recognize and give thanks where due, regardless of the language the thanks is given in!
We are grateful to the Chinese media for their interest in our mission, and in the broader international economics and cultural dynamics at work behind our cooperation with T Mall. We take our business very seriously, and appreciate it when we are able to help bridge cultural barriers, and introduce some of the best parts of western culture to a country whose economy and infrastructure are developing at such a rapid clip. So, to all of our Chinese readers out there, 感谢各位！
If you are interested in getting your products in front of the eyes of the biggest online marketplace in the world, or have been thinking about Export to China as a strategic move for your business, please drop us a line here. We’d love to chat with you!
Industry Report: Alibaba on the Rise While Google and Amazon Wage War at Home
Export Now | Industry Report
Anyone wondering about the future of E-commerce in China doesn’t need to look far to see emerging trends, and massive market growth. Die-hard followers of news in the export industry will already be aware Alibaba.com is China’s largest eCommerce portal. What they might not be aware of yet is the fact that Alibaba.com’s sales are set to outstrip both Amazon and eBay this year. Amazon and eBay combined, that is.
While eCommerce wars rage at home between giants Google and Amazon, massive online markets continue to develop and mature in China.
Trying to stave off the competition from Amazon, Google has recently changed Google Shopping to require e-commerce companies to pay to be included in shopping results, so product listings are now ads. Inclusion used to be free. If a company does not pay to be listed, consumers will not see what they have to offer.…
ChannelAdvisor, a marketing firm for e-commerce companies, said that among the hundreds of retailers it manages, 63 percent have begun paying. For those sites, revenue per click on a product listing has tripled. One, ToolKing.com, an online hardware store, said traffic from Google and the number of people who make purchases had both risen more than 50 percent.
Will this ruffle feathers over at Amazon? You bet it will. If paid listings on Google get results like this for online vendors, you can bet Amazon will be firing back with a response of their own in short order. Media and PR firms will be on the story like their lives depend on it, market shares will shift around, but the size of the market will remain the same. Guess where the size of the market is continuing to balloon?
That’s right. Over in China.
Zeng Ming, the chief strategy officer of the Alibaba Group, China’s largest e-commerce company, told reporters this weekend that the firm’s sales this year will be greater than Amazon (AMZN) and eBay (EBAY) combined.
Ming also said that the company is aiming for 3 trillion yuan ($473 billion) in annual transaction value from its Taobao e-commerce units on average over the next five to seven years. The Taobao unit’s sales for 2012 are expected to hit 1 trillion yuan this year, company founder Jack Ma said last year. Alibaba does not how much Taobao contributes to the top line, but Taobao is the main retail brand of Alibaba Group.
So if you want to give paid listings in Google a shot, or wait to see how Amazon responds, go for it. Maybe you’ll see your revenues go up like the source quoted in the FT article above. However, if you are a long term thinker and have a macro level perspective on the industry, you’ll see Alibaba as the new gold standard. As the bread and butter of the future of online commerce.
As the legacy online giants in the US go to war over market shares and try to exclude each other from the search engine rankings, lesser known and grander opportunities abroad become more and more appealing.
If you and your company have been considering expanding into into the Chinese eCommerce space, feel free to check out additional informational posts on our blog, or drop us a line and speak to one of our Export Now specialists.
Export Now has been featured in the news recently on both Businessweek, and China Daily. We are extremely proud to be at the forefront of small business expansion into China, the biggest market in the world, at present.
Here’s what we’ve been up to behind the scenes lately.
Bloomberg Businessweek: Small Business
Lavin’s connections are helping him build a new kind exporting business. Export Now (it shares his book’s title) is a middleman for U.S. manufacturers that want to sell their consumer products in China. Headquartered in Akron, not far from Lavin’s hometown of Canton, Ohio, the 15-person business handles the headache-inducing back-end work for its clients, from customs clearance to trademark registration to order fulfillment. Lavin says Export Now, which also has an office in Shanghai, is backed by “a few million dollars” in equity capital.
Rather than negotiate with retailers as a traditional distributor would, Export Now posts product descriptions on its storefront on Alibaba Group’sTmall.com, an Amazon (AMZN)-like shopping colossus in China that is adding more foreign retailers as demandamong its nearly 500 million registered users increases for U.S.-branded goods.
China Daily USA
The idea for Export Now arose in December 2010 after months of talks with Alibaba Group, China’s biggest e-commerce provider, through Tmall.com and Taobao, another online shopping site.
“Tmall.com shares a common objective with Export Now, which is to enable a more-rewarding trade experience through e-commerce and provide access to a wider selection of high-quality and authentic products, be they domestic or international,” Alibaba spokeswoman Florence Shih said.
A surge in demand for US brands through Tmall.com, she said, reflects Chinese consumers’ increasingly sophisticated demand for high-quality goods and services.
Here at ExportNow, we hope to make the Chinese market more accessible to small business everywhere. If you are a small business considering pursuing expansion into China, please don’t hesitate to contact us here, or check out our book here.
In the wake of “Linsanity” (or Lin fengkuang) and Li Na’s continued ascent to the top of women’s tennis, China’s attention to sports has increased sharply. The international prominence of these athletes is changing the often self-imposed stereotype that China’s athletic success is limited to individual, Olympic-style athletic competition and has raised questions about the merits of China’s institutionalized, drill-oriented sports training system.
(In fact, had Jeremy Lin grown up in mainland China, he would most likely not have been selected to attend one of China’s basketball development facilities given that his height of 6’3’’ falls well short of the preferred height of 6’6’’.)
More and more young Chinese, inspired by the success of these ethnically Chinese sports superstars, are picking up basketballs, tennis racquets, and a host of other sports equipment as foreign leagues continue to compete to win the attention of 1.3 billion potential athletes and fans. This increased demand, coupled with the shift in perception of China’s ability to compete in sports outside the Olympics, badminton, and ping-pong has raised the hopes of foreign athletic apparel companies.
Looking to take advantage of this change in consumer preferences, Nike – which has been in the country for over 30 years – has released a series of web videos targeting female consumers. The brief advertisements feature female college athletes talking about their dreams to become professional athletes, dancers, and yoga instructors.
Nike hopes that this appeal to female athletes will continue to encourage women to participate in sports at all levels, and of course, buy the top-of-the-line Nike apparel associated with these activities. Companies like Nike are in a challenging position. In order to sell their products, they first need to create demand. That means selling the activity associated with their products. With the help of successful Chinese athletes, this task is a little less daunting than it once was.
Even companies in non-sports related industries are utilizing the success of ethnically Chinese athletes. L’Oreal, the second largest cosmetics company in China behind Procter & Gamble, became the official sponsor of the Shanghai Rolex Masters Tennis Tournament in 2011. The tournament was watched by over 10 million people in China, giving L’Oreal an incredibly popular advertising platform
As sports continue to gain ground in China, at the urging of companies like Nike and thanks to star athletes, expect more attention to Chinese sports leagues and greater participation among athletes at all levels. This creates opportunities for companies of all sizes, sports related and non-sports related alike, looking to tap into the rapidly growing Chinese market.
Chinese Advertisers Follow Audiences Online
As readers demonstrate a clear preference for online media over print, news organizations are putting more resources into digital platforms, e-commerce is growing and advertisers, too, are spending money where they know they can find the audiences they need — online.
In China, this shift has led to explosive growth for e-commerce platforms, including the largest online shopping site, Tmall.
It has also meant substantial growth in online advertising in China. Data collected by iResearch, shows that from 2002 to 2012 Internet advertising rose from a negligible amount to about 79.1 billion Yuan — about a third of the more than 200 billion Yuan spent on advertising in total and second only to TV advertising (which accounts for 86.1 billion Yuan).
The report found that in 2011, for the first time in China, advertisers spent more on online ads than they did on print ads.
Another report, from Companies and Markets, pointed to these factors:
The rising number of tech savvy population and introduction of new technologies made online shopping safer and user-friendly and all these factors support online advertising demand in the country.
Advertisers are putting their money where the audiences are. In China, as in the rest of the world, that means online.
What’s on your nightstand? We put together this list of books to help any executive develop strategies and plans for 2012 that will open new markets and build strong connections to new customers.
1. The Chinese Dream: The Rise of the World’s Largest Middle Class and What It Means to You Helen Wang, who holds a masters from Stanford, is a business consultant, entrepreneur and the founder of a venture to help women in business in developng countries. She is a native of China who has lived for two decades in the United States and her book “The Chinese Dream” reflects her years of research into the Chinese middle class.
2. The End of Cheap China: Economic and Cultural Trends that will Disrupt the World Shaun Rein, publication date March 27; described as a “practical, must read for anyone dealing with China, doing business there, or simply trying to understand what is going on” by Ambassador Nicholas Platt, President Emeritus, Asia Society.
3. China’s Emerging Middle Class: Beyond Economic Transformation edited by Cheng Li, presenting a range of scholarship on employment, demographics, politics and other issues shaping the contours of one of the most important transformations in China, and what that means to the entire globe.
4. Export Now: Five Keys to Entering New Markets by Frank Lavin and Peter Cohan, with a foreword by Gary Locke. Practical steps from the Lavin, the founder of the export service company Export Now, and Cohan, a prominent business writer and policy analyst.
5. Capturing New Markets: How Smart Companies Create Opportunities Others Don’t Stephen Wunker, a business consultant and writer who has worked around the world, explores fundamental forces that allow innovative businesses to enter new markets and win customers.
Penetrating a market as large as China means reaching beyond the most-popular retail districts in Shanghai and Beijing. While some global brands are building storefronts across scores of second- and third-tier cities, even the top brands have learned that e-commerce efficiently extends their marketing reach.
Smaller companies have no choice. The cost of going online is far less that the cost of building one store.
Here, we’ve collected five reasons lower-tier cities matter, and how e-commerce can help you find those customers.
1. Speed to market Yigal Azroue, a clothing designer who sells his work in a Shanghai boutique, talks about the prospects for expansion:
“I have barely tapped into the market, but the opportunities that you hear about today are reaching the second- and third-tier cities much faster,” he says. “China is certainly not just Shanghai, Beijing and Hong Kong.”
Rolls-Royce is honoring the Chinese New Year with a new ”Year of the Dragon” model. Barbara Demick of the Los Angeles Times describes the growing taste for luxury goods in China in her article Chinese are up to speed with life in the fast lane. Demick reports that the $1.6 million vehicles will have ”hand-embroidered versions of mythical animals on leather headrests.”
Retailers also say that high-fashion apparel is popular. This China Daily report on The Villa, a Shanghai boutique, makes it clear that shoppers in China are willing to open their wallets for the right products:
Yigal Azrouel is one of the designers that The Villa has carried since its opening and has seen the market and interest for a broader range of style grow.
“What I love about China is the excitement about fashion, not just clothing,” says Azrouel, who adds that he has a more international presence.
Since the Cultural Revolution, China has had a strained relationship with the United States. Cold War pressures jeopardized political discourse between the two international giants. But President Nixon’s trip to China in 1972 marked an economic awakening in China.
In recent decades, China has proven to be one the most influential actors in international political-economy. Trade between the United States and China has sky-rocketed, tying the two nations together economically despite their political differences. Consumerism in China has developed alongside the market-led economy, further elevated by the explosion of e-commerce in the country. While socio-political discourse is heavily influenced by the Chinese government, economic agency has become increasingly available to the Chinese people. E-commerce allows for a diversity in product selection previously denied to the Chinese consumer before B2C platforms like Taobao and TMall.
Increasing wages, a rapidly growing GDP and desire for economic globalization are a few examples of how China’s economy is flourishing at an unprecedented rate. As is the trend in many countries transitioning from a developing to a developed economy, these staggering growth rates will eventually level off. But will consumerist behavior level off as well? Probably not.
There has been a reorientation of social and cultural values in China. As more and more Chinese become comfortable with satisfying their consumer desires through e-commerce, the consumer identity will be fused with and ingrained in their cultural and social consciousness. Furthermore, a central factor in the relative decline of growth in the Chinese economy will prove to be employment and wage increases. Though the GDP may not grow so ravenously in coming decades, the Chinese consumer will have a deeper pocket and thus more consumer power.
Does this mean that China will westernize? That’s a difficult question to answer, but if China has proved anything, it is that economic development does not necessarily equate with social or cultural conformity to Western standards. Consumerism may globalize regional identities to a certain extent, but China is marked by a national pride that is not easily undermined. One thing is for sure: businesses of the world should take heed, because the Chinese consumer has arrived and is looking for products. The line between domestic and international commerce has been blurred by B2C platforms like TMall. Opportunity is knocking and exporting to e-commerce consumers in China provides an efficient and profitable way of answering this call.
China is witnessing a cultural revolution driven by a shift in attitudes towards sex and relationships. Consumers born in the 80’s and 90’s are participating in new dating behaviors and romantic relationships now start with the individual. This shift in perception–in addition to increasing the acceptance of alternative lifestyles–has had a profound effect on how companies market to 18 – 30 year olds, the fastest growing consumer demographic in China.
According to the Chinese research firm Enovate, non-traditional tastemakers, especially those from the LGBT community are creating strong shifts in attitudes towards relationships. Members of this community are influencing the media – primarily in places like Hong Kong and Taiwan, but this influence is quickly seeping into the mainland.
Western standards of dating have been traditionally nonexistent in China. This has led to dating circumstances that utilize the internet to overcome relationship adversity.
Women’s empowerment is also giving women a greater voice. Traditional attitudes, gender roles, and stereotypes are beginning to shift.
According to Simon Cao, Brand Manager for Unilever China, “It’s increasingly vital for us at Unilever to understand youth relationship behaviors in order to create better and more relevant products. Chinese youth today rely on many of our products to attract members of the opposite sex and gain confidence after using them.”
Although brands and companies often have to curtail overtly sexual advertising to pass through government regulations, more and more brands are pushing the limits in order to reach this critical youth market.
If your brand or product is aimed at young consumers, China cannot be ignored. Attitudes and consumer habits are changing rapidly in favor of western companies. Export Now can help companies that are trying to tap into this vital market succeed on a global scale.