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Transnational e-commerce: advice for buying on-line in China
China's cross-border e-commerce trading platform is boom. In the last few months I have written an essay on why cross-border commerce has gained momentum in China. Briefly, China's consumers' appetite for overseas goods to be bought ashore is greater than ever before. To the extent that it now encourages companies to establish e-commerce websites in this boom area.
Accenture/AliResearch forecasts that there will be more than 200 million frontier workers in China over the next five years. They want real, high value, overseas product and are willing to buy a reward for it. It also forecasts that by 2020 the total amount of transactions in goods bought on-line will reach $245 billion in China, making it the biggest cross-border B2C trade area in the global economy.
China's strong customer demands for overseas goods and pressure from the state to take an active role in promoting cross-border e-commerce promise good prospects for global brand names to look at this avenue. Companies that sell across borders benefit from lower rates and lower regulation standards (which is particularly attractive for cosmetics, vitamins and virgin foods).
This also offers brand the possibility to test the China brand without having to establish a real footprint in China, says Susan Corbisiero, EU trade chief, Austrade, Shanghai. "Corbisiero added, "Online gives you a great deal of information and gives you easy online control over where your product ends up and can therefore determine your off-line strategies.
Woolworths' Australia grocery stores, for example, recently opened a shop on Alibaba's cross-border Tmall Global market. There are four categories: vitamin and dietary supplement, baby, scalp and scalp treatment, scalp and scalp treatment and foods. Especially in China there is a great need for baby foods from Australia. Third parties' practices of reselling baby foods to Chinese consumers has led a number of Aussie retail outlets to restrict the number of outlets they buy to four doses per deal.
Woolworth' s entry into the China markets via cross-border trading channel will be a good occasion to test markets demands for these types of goods and to break through a booming gray intermediate trading area. These are three ideas for brand names that are launching a cross-border e-commerce stategy for China. A key consideration for overseas brand owners is how to distribute their goods through cross-border sales chains.
There is one way to do it alone, but it has benefits to work with an existing, committed, cross-border on-line trading system, especially for brand new to China. JD Worldwide and Tmall Global are the two largest actors. Alibaba's cross-border Tmall Global (sometimes called Tmall International) is Alibaba's cross-border trading hub. This enables overseas suppliers to establish an on-line store and directly resell to China's consumer.
Sellers must declare that they are willing to sell only 100 per cent of the original product and only 100 per cent of the product purchased abroad. Last August, the renowned US clothing dealer Macy's opened a shop at Tmall Global as Macy's China. Prior to this, the merchant had sold to domestic buyers via its English-language website and then shipped goods from the US. The Tmall Global Shop stores stock in Hong Kong, accelerating lead to China for continental clients.
Macy' s will also hope that its Tmall Global footprint will provide it with extra opportunities for its more than 300 million current Alibaba marketplace subscribers, across other Alibaba sites, such as the Taobao 2C and Tmall B2C platforms. The JD Worldwide is the cross-border service of JD.com (Jing Dong). There are two cross-border schemes.
Providing "Market Place", brand names establish a shop and directly offer sales to China's consumer while still taking full benefit of JD.com's advanced warehouse and logistical infrastructures. JD.com purchases the stock from the ocean vendor and then resells it to China via the cross-border trading channel - and takes charge of all the logistical, storage and merchandising.
One of Jing Dong's celebrity recruits-after founding JD Worldwide in April 2015- Unilever used the JD Worldwide testing tool to test non-China sales through his home channel. Trademarks should also consider targeting smaller, specialised and specialised cross-border markets. A cosmetic label, for example, could consider the China based Jumei.com on-line cosmetic distributor, Jumei.com's cross-border Jumei Global trading site.
Trademarks do not have to be limited to a single one. China has become the largest Asiatic store for Blackmores vitamins and supplements since the introduction of a cross-border marketing campaign last year. It is important that companies make a thorough evaluation when selecting the working plattforms with which they wish to cooperate for a cross-border policy.
Among other things, important issues concerning a cross-border business are: - the need for a cross-border partner: We have two major issues for China based companies. First, how do you tell the tens of thousands of millions of China buyers about your reach now? They may be a well-known trademark in your own home market, but that doesn't mean they will be immediately recognised in China.
Secondly, cross-border commerce flourishes, and with the increasing flow of new makes every single passing day, as does rivalry. What will your franchise do to survive in this congested area? China's consumption patterns are very strong, says Corbisiero - on-line sales in China are not the same as sales in Australia or the US. The big issue for the brand is how much they have to do themselves.
Base branding for the China based markets starts with something as easy as making sure your website is localized into China. It is then a matter of identifying ways to distinguish oneself in an overcrowded one. Alibaba Group China's 300 million annually operating Alibaba Group China visitors to its on-line retailer marketplaces sound like a great deal of visitor activity, but for a Tmall Global franchise that stands out from the masses, informs China's customers about your franchise and ensures that your exposures to these customers are at your own expense.
For example, a local customer can look within the Jing Dong websites for French produce and be guided to all the produce in his shopping centre in Europe. It is important to have as much information as possible in a single page that goes beyond what most e-commerce websites in the West offer.
Traditional consumer want to be able to as much as possible look at, measure and study a particular item, especially if they do not know it. This means to explain what the products do and to educate the consumer about their function, appearance and use.
Here is a screenshot of the products page of the beloved baby toothbrush Sophie La Girafe on Tmall Global. Traditional consumer want to be sure that a food is authentic. This also shows that good qualitiy, real goods and clear information about products are well received by China on-line shoppers. After all, you should consider using specific packing around Christmas celebrations and present wrapping.
Entry into a new niche such as China is no different. Besides a thorough search for prospective customers, trademarks should take a broad look at the markets. Why not if the item doesn't sell? Watch how cross-border administration is managed. China's rules can quickly evolve.
E-commerce across borders in China offers global brand owners the ability to launch and test their product in a profitable environment. You should also be experimenting with large and small China e-commerce business associates to make sure their product is accessible to a very focused audience.