Iain McDougall, UK country manager at Stripe, sets out his top ten tips for British tech startups looking to sell into China.
As Brexit looms, embracing a global business mindset is more important than ever for British startups and entrepreneurs.
One way to kick-start this kind of approach is on Singles’ Day on 11th November. UK startups may be more familiar with Black Friday, but the fact is this day – which began life in China as a celebration of singledom – is now the world’s biggest online shopping day. Last year it rang up an eye-watering £14bn in sales in 24 hours.
The Chinese are the biggest spenders on Singles’ Day, but China is also one of the world’s most complex markets, so before you dive in, it’s worth doing your homework and understanding the cultural differences as well as the challenges of navigating an entirely different internet ecosystem.
1. There’s more to it than luxury
Many businesses look to emulate the success of British luxury brands like Burberry in selling to Chinese consumers, but consumer appetite for international goods stretches far beyond retail. Health and wellness products, for example, are soaring in popularity with the growing Chinese middle class. Don’t forget the Chinese traveller too, who is on their iPhone buying event tickets and booking hotel rooms while in the UK. Regardless of whether it’s jackets or juicers, with $750bn being spent online annually by Chinese consumers (more than the US and UK combined), it’s a market you simply can’t afford to dismiss.
2. Get discovered
If your brand is new to Chinese customers, partnering with some of the popular Chinese product discovery sites can be a relatively low cost way to get discovered. If you sell physical products, for example, get listed on Tmall, China’s largest online retail platform with a 56.6% share of ecommerce sales. Alternatively, businesses can also work with deal sites like DealMoon or 55Haitao in China to help generate early traction.
3. Optimise for mobile
This sounds like a no-brainer, but it’s especially important to get it right in China where the popularity of mobile shopping is eclipsing the trends seen in the UK and the US; China’s mobile payments hit $5.5tn last year, 50 times the size of the US’s $112bn market. From responsive design through to seamless mobile checkout experiences, make sure you’re meeting consumer expectations on mobile.
4. Offer familiar payment methods
At the point of purchase, offering local payment methods is a key driver of conversion. Alipay and WeChat Pay are China’s most widely used payment methods with 520 million and 600 million users respectively, so offering these at a minimum is imperative if you want Chinese sales. Stripe recently launched support for Alipay and WeChat Pay, meaning British startups can accept payments via those methods, with pounds arriving in their bank accounts.
5. Optimise for Chinese search engines
Even if your website is fully optimized for Google, you will need to make some changes to improve your ranking on Baidu and Soso, which are more popular than Google in China. Work with SEO experts to restructure your website content to be more compatible with the Chinese way of searching.
6. Learn from locals in your backyard
The Chinese diaspora is a powerful community of influencers to friends, family and colleagues back in China, so make sure to speak to them and learn from businesses that have experience interacting with this network. Many businesses find that their adoption among Chinese consumers happens organically through this community, as well as through powerful social networks like WeChat.
7. Understand the complexities of cross-border logistics if you sell physical goods
Businesses should familiarize themselves with the numerous customs rules, understand the restrictions on products shipped to China, and explore opportunities offered by China’s Free Trade Zones. You can also consider working with a strong logistics provider with local partners in China to help ensure your products make it the last mile.
8. Send reminders via SMS before payment for subscription services
While SaaS and subscription companies are becoming increasingly popular in China, consumers are still getting used to agreeing to make recurring payments for products. Some customers expect a heads up before a recurring charge is processed, so a best practice is to send a text message reminder before doing so (Chinese consumers tend to check text messages more frequently than email).
9. Go heavy on images
Chinese ecommerce sites like Taobao tend to display more product images and previews than their North American or European counterparts. Customers have grown accustomed to seeing more than 10 images from multiple angles for each product, so startups should consider increasing the number of product photos as part of their shopping experience to better meet these buying expectations.
10. Be prepared for expectations of real-time responses
Given the widespread popularity of WeChat and other real-time tools on Alibaba, Chinese consumers have come to expect near-real-time responses from businesses when buying goods or services. Businesses should consider incorporating a chat feature on their website and use customer support tools to automate responses.