Unlocking the Power of 520 Day: How Brands are Capitalizing on China’s Love Celebration

May 18, 2023

You might know Valentine’s Day, but what if we told you that there’s another love day in China, where people celebrate love by sharing gifts with their loved ones? Yes, it’s ”520 Day”. China has more romantic holidays than most nations, with Valentine’s Day falling on February 14, 520 Day falling on May 20, and the Qixi Festival falling on August 22 this year.

You should be aware of 520 Day if you sell gifts such as jewelry, watches, handbags, or even automobiles. Valentine’s Day might not be a big deal in China. Instead, that happens most often on May 20 also called 520. Because it’s a consumer-focused holiday with a significant online component and gift-giving as a core element, it’s crucial for retailers to be aware of it.

Let’s get to know more about 520 days and how marketers can take advantage of them.

What is 520 in China?

Chinese users began using the term “520” online to shorten the phrase “I love you,” much like English speakers do with “ILY” or “ILU,” which is how 520 Day got its start. This is because when spoken in Mandarin, the phrase “I love you” (wǒ ài nǐ) sounds very similar to 520 (wǔ èr líng).

In China, it is not a recognized public holiday. However, on this special Day, restaurants and movie theaters are much more crowded and expensive in the evening. Also contrary to Qixi festival which is deeply rooter in Chinese tradition, ‘520’ is a purely commercial holiday coined only in recent years. It doesn’t take any of its allure and fun!

💕 Why should brands include Qixi, the Chinese Valentine’s Day, in their marketing strategies?

Is February 14 not so important anymore?

Valentine’s Day this year appears to be less busy than in years past. Big luxury brands like Louis Vuitton, Dior, Gucci, and Balenciaga didn’t launch any related initiatives in China. Social media platform Xiaohongshu recorded only around 50,000 posts mentioning “Valentine’s Day 2023” as of February 13, slightly fewer than the same period last year.

The general public does celebrate Valentine’s Day even though the holiday’s origins don’t have much cultural resonance with local shoppers. However according to a Chinese survey, people prefer traditional Chinese romantic celebrations like the Qixi Festival and 520 Day to Valentine’s Day.

Valentine’s Day is unlikely to gain popularity in China as consumers turn toward their own cultural heritage and brands prefer to leverage guochao in their marketing communication. 

This dynamic explains why high-end businesses have made marketing around more regional events a top priority. For the following significant romantic festival, 520 Day, luxury players will probably go all-out.

 

How are the other brands doing it?

 

Balenciaga 5:20 video game hall

Last year, Balenciaga launched a campaign that featured a number of charitable endeavors and limited editions, all of which were offered on their official website and in physical stores. One standout was the “5:20 Video Game Hall,” a virtual arcade with pixel art and a lifelike soundscape that is currently available on the company’s WeChat channel until May 20. Alongside this, WeChat memes and 520-only profile pictures were made available for free download.

This year, the brand prepared a range of 520-exclusive products such as T-shirts and other accessories. These can be decorated using included garment marker. There is also a beloved gaming component but this time users become farmers growing virtual crops using regenerative agricultural techniques.

🎮Female Gaming – One of China’s Most Promising Trends

Balenciaga 520 Campaign China

Saint Laurent’s Tmall Super Brand Day

Since the beginning of its campaign on April 30 in conjunction with Tmall Super Brand Day, French luxury fashion house Yves Saint Laurent has amassed hundreds of millions of cumulative exposures online. 

The pink version of its Kate bag line was first introduced during the campaign. The color symbolizes love.

Saint Laurent has created an interactive 3D experience that enables customers to try on the various styles in an immersive setting. In addition to enlisting the help of celebrities and KOLs on social media. 

 

Special 520 products from Bvlgari

On May 1, Bvlgari launched a campaign to promote its 520 products, and to do so, it used Weibo’s pop-up advertisements to introduce Wu Lei as its 520 campaign spokesperson.

The first 1000 customers who spend more than 20,000 RMB between April 20 and May 20 will receive special 520 stickers. The first 300 customers who order 520 items online will also receive a special festival-related stamp in the mail.

 

Tiffany’s limited edition ruby necklace – “Blue is the Color of Love”

Tiffany presented a limited edition Tiffany Hardwear necklace set with rubies to commemorate Valentine’s Day this year. Olympic gold medalist and model Eileen Gu was the face of the luxury jeweler’s  advertising campaign.

Gu’s support for this cause has increased its social media engagement: as of publication, the campaign hashtags #ElieenGuTiffanytheColorofLove and #ElieenGuColorson on Weibo had amassed a combined viewership of 230 million, a sizable number for a commercial ad.

With comments like “mysterious,” “high-end,” and “gorgeous,” 99 million people have viewed Tiffany’s iconic blue box.

Tiffany 520 Campaign China Eileen Gu

“V” for love from Valentino

The Valentino Garavani 520 Mini Loc handbag campaign featured the letter “v” from the word “love” concealed inside the iconic logo of the accessory. 

The theme of the campaign was that love is a special declaration between two people. Along with this storytelling, the celebrity partnerships for the campaign received overwhelmingly positive reviews from online users.

One of the top 3 trending topics on Weibo on May 10 was the hashtag #LayZhangJessicaJung, which received 100 million views in a single day.

 

Maison Margiela’s “I love” twist locker

Margiela introduced Aa New Lock handbag exclusively in China. The piece made its debut in Maison Margiela’s Avant-Premiere Spring-Summer 2022 collection, embellished with pistachio green leather and an “I love” twist locker.

Multiple sets of character strings with associations to love can be found in the accessory’s twist locker’s special edition. When the bag is locked, the phrase “I love” is visible; when it is unlocked, a number of options are available, including “You,” “The Earth,” “My Cat,” and “Maison Margiela.”

 

Prada: Mathematics of Love

One of the first high-end companies to launch its 520 campaign in China was Prada. The “Mathematics of Love” campaign  examines love in the context of the post-pandemic era. It defines love as both universal and particular, timeless yet also linked to the present.

A special selection of 520 products are available through a WeChat pop-up shop.

 

​​Louis Vuitton: Treasure Hunt

Louis Vuitton released a 90-second short film on May 12 to commemorate 520 Day. The film shows a treasure hunt on the company’s monogram handbags led by the actress Song Jia and livestreamer Li Jiaqi.

Li’s on-screen persona is unusual for Louis Vuitton, which has traditionally favored celebrities with sizable fan bases; however, his endorsement seems to have greatly impressed netizens, as his Weibo campaign post garnered over 4.2 million views.

 

Diesel Taps Collectible 

Diesel and Dolores, a company known for its collectible toys, worked together to produce 520 Valentine’s Day figurines this year. 

The art toys come in three colorways: neon pink, neon green, and neon yellow. They feature Diesel’s Spring 2023 collection and its best-selling 1DR handbags. 

DIESEL 520 Campaign China

📅 Discover our China’s 2023 Marketing Calendar

Conclusion

Referencing well-known Chinese holidays or launching specific promotions can be a very effective way to engage customers. However, it’s equally crucial to ensure your messaging and imagery are culturally sensitive. Do not rely on stereotypes, or you run the risk of gravely offending your audience.

If you want to know more about the Chinese market and how we can help your business, contact our team. We use our knowledge and expertise to help businesses build meaningful partnerships and develop their networks among Chinese customers. For additional information, please contact us at contact@thewechatagency.com.

 

 

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20 E-commerce Trends in China for Brands to Explore in 2023

January 19, 2023

China has the world’s largest e-commerce market. With an average growth rate of 6%, Chinese e-commerce revenue is expected to reach $2 trillion USD by 2025.

According to research firm Insider Intelligence, roughly 1 billion local consumers shopped on e-commerce channels across China in 2022, accounting for 45.3% of all retail sales online.

That’s huge! Right? All thanks to online communities and social commerce on popular apps like TikTok, WeChat, and Sina Weibo, which have long since become ingrained in Chinese culture.

In fact, Chinese consumers use their mobile devices for almost five hours every day, which they use for keeping in touch, making payments, shopping, plan trips, and more. Keeping all this consumer data in mind, companies should reconsider their 2023 investment plans as China relaxes pandemic-related restrictions.

Here are some of the e-commerce trends from 2022 for businesses to observe and reflect in their marketing strategies for 2023.

 

Chinese E-commerce trends to follow

 

1. Outdoor games 

Due to the Winter Olympics in Beijing and the relaxation of travel restrictions, there’s a significant increase in demand for outdoor activities in China through 2022. 

This led to a boom in winter sports, with a 300% increase in winter sports equipment sales on Alibaba’s Tmall platform between Jan. 31 and Feb. 4, including a 180% increase in skiing gear purchases. Outdoor gear and camping equipment sales also saw a boost on Tmall, doubling in March compared to the same period the previous year. 

Several international brands, including Carver and Santa Cruz, announced plans to enter the Chinese market through Tmall Global, Alibaba’s cross-border e-commerce platform, during the previous mid-year shopping festival in June. 

 

2.  Furry babies

In China, pets are increasingly being treated like own children, with owners buying specialized clothing and technology for them.

During the first checkout period of the 11.11 Global Shopping Festival in November, pet food brands on Tmall saw a three-digit year-over-year growth in gross merchandise value. 

Younger Chinese pet owners view their pets as children, they are also investing in digital gadgets like intelligent pet bowls and companion robots.

 

3. Metaverse

In 2022, the metaverse saw significant growth, and fashion companies began to experiment with its potential uses, including digital collectibles and virtual try-on services. 

Digital collectibles, which allow brands to build a community of followers in both the metaverse and the real world, became popular in late 2021. 

Nearly two dozen luxury brands released 37 digital collections on Alibaba’s Tmall Luxury Pavilion, and thousands of consumers purchased them. 

More retailers are expected to use digital tools to engage customers and develop products for pets in the coming year, such as Burberry’s private digital salon for coat shopping on Tmall Luxury Pavilion. 

 

4. Gen Z Shoppers

In China, Generation Z, a significant consumer group, accounts for approximately 15% of the population.

Despite their small size, they have a disproportionate influence on consumption trends and are one of China’s fastest-growing consumer groups on e-commerce platforms.  As their purchasing power grows, they will account for nearly two-thirds of Tmall Global consumers, which is more than 17% of Tmall Luxury Pavilion consumers by 2022.

Gen Zers are also fueling the popularity of collectible toys in China, congregating to show off their latest purchases and exchange trend information, attracting investors such as Sequoia China.

🛍 Read more about Gen Z as Luxury Consumers

Gen z China luxury

5. Virtual Influencers

In 2022, artificial intelligence-powered digital creations gained popularity and became celebrities in their own right. They appeared on virtual catwalks, dance competitions, and livestream sessions. These virtual idols were used by Chinese brands to increase brand awareness and attract followers among China’s digitally native consumers.

According to market research firm Forrester, virtual influencers will become more common in the coming year, with a fifth of B2C brands in China using digital idols to improve the shopping experience for consumers by 2023.

 

6. Cross-Border E-Commerce

The cross-border e-commerce (CBEC) sector in China has experienced significant growth in recent years.  Consumers in China are increasingly interested in international products and brands, fueling growth in the CBEC sector. 

As a result, in order to meet this demand, many companies have entered the market, resulting in competition among CBEC platforms like Alibaba, NetEase Kaola, JD Worldwide Vipshop Global, Amazon Global, and Pinduoduo.

🌏 Read more about China’s Cross-Border E-commerce Solutions

🛒 Why WeChat Might Be a Better (and a Cheaper) Option for China E-commerce Newbies?

7.  Omnichannel retail

Through all points of contact, this cross-channel content strategy aims to improve the user experience and strengthen relationships with the target audience. 

The goal is to make the transition between online and offline interactions (O2O) as smooth and consistent as possible, regardless of where the customer shops or interacts with the brand. 

China is at the forefront of omnichannel retailing, with high customer expectations, smart sales assistants, mobile-first approaches, self-service kiosks, and the use of virtual and augmented reality. 

 

8. Xiachen

Selling through social media to China’s lower-tier cities and regions is becoming more common. Lower tiers are happy to buy consumer goods with their extra money because their living expenses are lower.

🇨🇳 China Marketing Strategy: One Size Doesn’t Fit All

taikoo li chengdu china localization

9. Fintech

Financial innovation and technology are increasingly competing with traditional methods of delivering financial services. 

Chinese online banks are emerging as startups that provide straightforward financial services to individuals and institutions, particularly WeCash (unrelated to WeChat or Tencent). These banks frequently employ AI and machine learning techniques.

For instance, WeCash, which has 130 million users across five countries, enables people to easily obtain their credit score and submit loan applications. Additionally, using this big data-driven platform, institutions can develop their income-producing loan portfolio.

 

10. Cryptocurrency

In the Middle Kingdom, users and miners of cryptocurrencies are subject to strict regulation. China is looking for a new cryptocurrency market and country-specific solutions, much like it has done with social media platforms, a dedicated Chinese search engine (Baidu), and other tools and regulations that apply only to China.

China is now completing the preparations for the launch of its DCEP (Digital Currency/Electronic Payments), which was first conceptualized five years ago. 

Unlike Bitcoin and other cryptocurrencies, DCEP is sanctioned by the government. The government will most likely distribute the new currency through conventional banks, making it completely centralized and identical to traditional paper money. The Belt and Road Initiative (BRI) and other development initiatives by China are increasing its international trade, and the DCEP has the potential to increase China’s financial independence and decrease its reliance on the US.

 

11. From KOL to KOC marketing

Key opinion consumers (KOCs) are “regular” consumers who write blogs and make videos about their own product reviews and recommendations. 

End users are thirsty for recommendations and advice from real customers they can trust. KOCs are influencers as well, but they are more sincere.

Brands that use KOCs as part of their marketing plan can see an improvement in their sales and brand recognition. As they typically do not have many followers, making them hard to find, be sure to identify appropriate KOCs.

💁🏻‍♀️ What is The Difference Between KOL and KOC?!

 

12. Short Videos

Short videos and short video apps are dominating the Chinese market in addition to live-streaming. As a result, the distinction between work and socializing keeps getting fuzzier. The fact that more than 300 million Chinese people use short video apps shouldn’t come as a surprise to you.

Gen Z and individuals with middle and higher incomes are more drawn to this medium in higher Tier areas. Our favorite short video platform are WeChat Channels. We even dedicated a whole category to them!

📽 Discover what WeChat Channels Are 

WeChat Channels Live Streaming

13. Group Buying

This trend has yet to spread beyond China. Customers elsewhere may believe that the products are of poor quality or that the platforms are untrustworthy and charge hidden fees. 

Chinese consumers appreciate the cheap prices, and the group-buying model benefits lower-income residents in particular.

 

14. Social Commerce

Social commerce, a hot new trend, is expected to reach more than 600 billion dollars globally by 2027. It arose as a result of the increased use of mobile devices and social media.

Shoppers can shop from home, at work, or on the go. This behavior necessitates the creation of novel approaches to creating a personalized and ready-to-purchase social commerce experience.

 

15. Cruelty-Free Products

Until early 2021, animal testing was required by law for cosmetic products imported to and sold in China. This law is no longer in effect as of May 1, 2021. 

General cosmetics imported into China are no longer required to undergo animal testing as long as they also satisfy other criteria, like a safety and risk assessment.

This also broadens the market for vegan, cruelty-free, and eco-friendly cosmetics and beauty brands. The first cruelty-free cosmetics company to sell in mainland China was the UK-based skincare line Bulldog, which was imported under the general trade model rather than the CBEC model.

 

16. Private Traffic

Brands are looking for alternatives as paid traffic prices increase. Brands can promote a specific lifestyle and the associated products by creating exclusive clubs or groups, like WeChat groups. 

A closed group has the benefit of already having devoted patrons and supporters. Additionally, they react more readily to CTAs.

 

17. Big Data

Massive amounts of data are analyzed in order to implement data-driven marketing in China.

Businesses get around space and time constraints by combining data from offline and online consumer behavior. Businesses gain deep insights into the preferences, movements, and behavior patterns of their (potential) customers.

For instance, Tencent gathers and categorizes data into various dimensions. This includes more than 3,000 tags, such as fundamental characteristics, social preferences, entertainment interests, media preferences, etc.

Remember that Chinese consumers adore their smartphones and utilize them for everything. In particular, WeChat which enables users to pay, play, chat, shop, order common services and goods, and more. In China, advertising has never been both simpler and trickier at the same time. 

 

18.  The Middle Class Continues to Rise

Upper-middle-income and above households are driving strong consumption growth, with double-digit growth. The number of upper-middle-class and higher households in China is predicted to increase by 71 million over the following three years.

 

19. Making Wiser Decisions Without Compromising

Customers are switching to less expensive channels and actively looking for sales and promotions. They are aware of the precise ingredients used in their skincare regimen or the products they use in everyday life

They could, for instance, compare and contrast the down content and thermal effectiveness of their jackets.

Customers are savvy and skilled at researching the technical specifications of their preferred products on websites or social media.

 

20. Guochao

Purchasing locally has been popular for a while. It was mostly due to national pride. 

Most importantly, consumers are choosing local brands because they like the quality and innovation of the goods rather than just because they are cheaper or because they feel more patriotic about their country.

🥮 Discover What Guochao Is and How Can (Carefully) You Leverage It

Conclusion:

Firstly, China’s e-commerce market is expanding steadily and is leading the world. Secondly, Chinese consumers are increasingly shopping online for clothing, accessories, and beauty products. Despite the changes in Covid restrictions, this trend continues to be strong. Thirdly, e-commerce enthusiasts are now being joined by the silver generation quickly catching up with online shopping.

This allows businesses to import goods to China and expand their market, especially when combined with popular cross-border e-commerce shopping and fewer restrictions.

If you want to know more about Chinese e-commerce or need help establishing your digital presence in China, contact us. We use our knowledge and expertise to help businesses build meaningful partnerships and develop their networks among Chinese customers. For additional information, please contact us at contact@thewechatagency.com

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Chinese market trends

August 24, 2022

Tencent Accelerates the Development of its One-Stop Live Shopping Platform, Will it be Able to Compete with Douyin?

The launch of Tencent’s WeChat Channels Store on July 21 increased the competition for Douyin’s live-streaming e-commerce venture. The launch of the new service is intended to replace the earlier WeChat-based online store, increasing the dependence of sellers on “WeChat Channels,” which offer live streaming and brief videos. In 2021, the short video service had 500 million daily active users, an increase of 79% over the year before. Each day, these users spent 35 minutes watching videos, an increase of 84% over 2020, but this was still less than a third of the time spent on Douyin and Kuaishou.

Link: https://en.pingwest.com/a/10539

 

Don’t You Dare Say “WeChat”: 

Chinese users have long eschewed censorship by using inventive wordplay, such as homonyms and purposely misspelled words, to get around restrictions on social media. In addition to political taboos, there are also business regulations. Live streamers on Douyin are reportedly prohibited from using the terms “WeChat,” “friend circle,” or even “limited time offer” and “money-making.” Also, avoid bringing up the “country” or the “pandemic situation.” These never-ending guidelines and limitations were tiresome for content producers.

Link:https://chinamediaproject.org/2022/07/27/dont-you-dare-say-wechat/

 

Cartier snatches up China’s lower-tier markets ahead of the Qixi festival

In three Chinese cities, Henglong Plaza in Kunming, Wanxiang City in Nanning, and Hisense Plaza in Qingdao, Cartier has set up a number of pop-up experience stores. A limited-edition collection made specifically for the festival and available only in the Chinese market will be displayed in three distinctive installations.

Link:https://daoinsights.com/news/cartier-snatches-up-chinas-lower-tier-markets-ahead-of-qixi-festival/ 

 

5 Tips For KOL Collaborations In China

The outcomes of a partnership between a brand and KOL are impossible to foresee.

  • 1. Limited-edition capsule collections are king
  • 2. Take cues from local brands
  • 3. Beware of collaboration fatigue
  • 4. Keep in mind: Consumers in China still rely heavily on celebrities and KOLs 
  • 5. Yet brands must be more cautious than ever when partnering with a KOL or celebrity

Link: https://jingdaily.com/five-tips-kol-collaborations-china-neiwai-li-jiaqi/ 

 

Alibaba’s Ele.me joins ByteDance’s Douyin to challenge Tencent-backed Meituan in food delivery market

On Friday, Ele.me, an Alibaba Group Holding-backed food delivery service, announced a partnership with ByteDance that would enable Douyin’s 600 million daily active users to place food orders through the brief video app.  Through the partnership, Ele.me will use videos on Douyin to promote products from millions of restaurants and stores.

Ele.me was acquired by Alibaba in 2018, but the platform has had trouble competing with Meituan, which is supported by Tencent Holdings. In the first quarter of 2021, Ele.me held 27% of the market for online food delivery in China, which is less than Meituan’s share of 67 percent. Meituan faces new obstacles as a result of the most recent partnership between Ele.me and Douyin. 

Link:https://www.scmp.com/tech/big-tech/article/3189538/alibabas-eleme-joins-bytedances-douyin-challenge-tencent-backed

H&M Returns to Tmall After Prolonged Xinjiang Cotton Controversy

H&M quietly made a comeback on Tmall, Alibaba’s flagship e-commerce site in China. The store’s reopening was announced by local media outlets on Monday. In 2018, the Swedish fast-fashion juggernaut debuted its official Tmall store. Due to allegations of forced labor in the Xinjiang region, the brand refused to use that cotton in March, and as a result was removed from Pinduoduo, JD.com, and Tmall.com. The store remains unsearchable on the latter two e-commerce sites, and its store listings remain delisted from online maps and Dianping, the Chinese version of Yelp.

H&M closed its first and largest flagship store in Shanghai this June due to protracted lockdown procedures and ongoing customer backlash. The brand currently runs 381 physical locations, down from more than 500 doors at the start of 2021. The brand also operates an official website in the market.

Link: https://sg.news.yahoo.com/h-m-returns-tmall-prolonged-151757777.html

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What’s new in e-commerce?

August 11, 2022

Why Experience, Story and Video Are Key Sales Drivers in Chinese Cross-Border Commerce

 

Tmall adopts a slower, more drawn-out strategy intended to entice customers with a wide variety of options, while Amazon places a premium on speed and convenience, with quick conversions and brief visits. Amazon is extremely quick in and quick out, and its search algorithm is built around helping you find the product you want as quickly as possible. 

Tmall is more concerned with presenting you with more brands, a wider variety, and as many different product images as it can. The goal of Tmall’s strategy, which is to interact with customers, is to do more than just make sales. China has essentially made shopping into a game in terms of e-commerce.

The app gives you the impression that you are there to experience something rather than to make a purchase while you are using it. Tmall does a great job of encouraging businesses to post more content, both user-generated and branded. Live Streaming and live videos have increased significantly.

https://www.retailtouchpoints.com/topics/digital-commerce/mobile-commerce/why-experience-story-and-video-are-key-sales-drivers-in-chinese-cross-border-commerce

 

Alibaba to scale up cross-border e-commerce activities

 

As domestic consumption on the mainland continues to decline, Alibaba Group Holding is stepping up efforts to expand its cross-border e-commerce operations through a new campaign with authorities in Hangzhou, the capital of eastern Zhejiang province. This initiative aims to support more Chinese exporters as they expand abroad.

Other Chinese cities have also made plans to increase the volume of international e-commerce, demonstrating a wider support for the recovery of the mainland’s economy.

Through its various subsidiaries, including the international Tmall and Taobao Marketplace operations, the Southeast Asian e-commerce platform Lazada, and the global retail site AliExpress, Alibaba has connections to the Hangzhou pilot zone.

https://finance.yahoo.com/news/alibaba-scale-cross-border-e-093000775.html

 

JD.com Launches Robotic Shops “ochama” in the Netherlands

 

Two robotic stores under the new brand name “ochama” were launched by JD.com, a leading supply chain-based technology and service provider, on January 10th, 2022, in the Netherlands. Additional locations will be added soon. The new store model introduces a previously unheard-of shopping format that combines home delivery service, pick-up shops where robots prepare the packages, and online ordering.

JD.com has never before had a physical retail location in Europe. Ochama, which combines “omni-channel” and “amazing,” is the first Dutch omni-channel retailer to provide both food and non-food items in a single shopping app.

Through ochama’s App, where a full range of A-brand products are offered covering fresh & packaged food, home appliances, beauty, maternal and child products, fashion, home furnishings, and more, customers can conveniently order products online using the omni-channel model.

https://jdcorporateblog.com/jd-com-launches-robotic-shops-ochama-in-the-netherlands/

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Top Chinese E-commerce Platforms and Fees to Expect

August 11, 2022

The Chinese e-commerce market is the largest in the world and generated €867 billion in revenue in 2019. From 2020 to 2024, the annual growth rate of e-commerce in China is projected to be 6.9%.  Obviously, many overseas companies are tempted to enter the market and cater to millions of potential new consumers. Be it the youngest Gen Z or Chinese grandmas who are eager to spend more during their retirement, with a great product and market strategy it’s a great chance for brands to tip their toes.

👵🏻 Read more about China’s silver generation and their growing purchasing power and habits

This appeals to international businesses as well as the local business community, resulting in cross-border online trade. In 2022, it was estimated that the import e-commerce retail market would be worth close to 559 billion yuan. The most popular e-commerce platforms are Tmall, JD, Xiaohongshu, and WeChat. However, you will see there are plenty more e-commerce sites in China.  

No matter the size of your brand, the first step and choosing the right platform can be paralyzing. Companies quickly realize that the entry barriers to the biggest Chinese shopping platforms are challenging starting with the paperwork to e-commerce fees, steep deposits, and commissions.

One of the most attractive e-commerce models especially for niche or small brands that want just to test the waters would be cross-border e-commerce. Therefore more platforms offer this option now.

In China, cross-border e-commerce is distinguished by the fact that overseas companies are permitted to offer some goods to Chinese consumers online at favorable tariff rates and without the need for a business license. However, solution comes with some limitations we highlight in our previous article but nevertheless, it can be a very attractive way to kick off in China.

🇨🇳 Learn more about cross-border e-commerce and if it’s a solution for your brand

Let’s look at how much it costs to sell goods on these platforms in China, the pros and cons, and see which one can be the best fit for you.

Tmall

Tmall, formerly Taobao Mall, is a platform for business-to-consumer online retail, spun off from Taobao, and operated by Alibaba Group. It’s a highly reputable marketplace where all sellers are verified by the platform. In addition, Tmall has several solutions for brands that want to sell on the platform including cross-border sales.

 

Tmall General:

  • For Tmall general trade, the security deposit is $7,500. 
  • A deposit is required from vendors to open a Tmall store. The deposit is primarily used to ensure that retailers follow the Tmall Service Agreement and Tmall Rules so that expenses are covered in the event that retailers break any rules.
  • To use Tmall, an annual e-commerce fee of $4,500 must be paid. Depending on the merchant’s category, a yearly fee is paid at the time of settlement.
  • Suitable for brands that have Chinese business license.

Registration fee: USD 7,500 deposit + USD 4,500 annual tech support fee

Commissions:  8-12%

 

Tmall Global:

  • Cross-border solution
  • Suitable for overseas brands
  • Doesn’t require a local warehouse in China
  • Access to Tmall’s services including live-streaming and advertising

Registration fee: USD 7,500 deposit + USD 9,000 annual tech support fee

Commissions:  8-12%

 

Tmall mini-store:

  • Cross-border solution
  • Suitable for niche or small brands
  • Listed as sub-store on Tmall direct flagship
  • Suitable for smaller collections or products that can be shipped to China separately (maximum 3 products)

Registration fee: USD 4,500 deposit

Commissions:  4-12%

 

JD:

As Tmall, JD also offers solutions both for brands that have legal entity in China and cross-border players.

 

JD General:

  • When creating a new account, JD.com requests a deposit starting from USD 4,500 and higher.
  • For the majority of categories, the commission is between 2 and 5%.
  • Suitable for brands that are already in China

Registration fee: USD 4,500 deposit+

Monthly fee: USD 150

Commissions:  2-10%

 

JD Global:

  • Through a new partnership between JD and Shopify, merchants on that platform now have access to a new sales channel with a simpler onboarding process and better exchange rates through the marketplace.
  • Fees and requirements appear to be more demanding than Tmall

Registration fee: USD 15,000 deposit+

Monthly fee: USD 1,000+

Commissions:  2-5%

 

Xiaohongshu / RED

  • Suitable for lifestyle and fashion brands
  • Recently, RED tries to be more brand-friendly and lower the commission costs. These do not include marketing expenditures, influencer commissions, or fulfillment fees.
  • Account set-up guide >>> here

Registration fee: Case-by-case basis (normally USD 3,500)

Monthly fee: None

Commissions:  5% (reduced from 20% before)

Recently, we covered another quickly expanding platform dubbed ‘the RED but for men’.  You might have heard of Poizon also called Dewu on the Chinese market.

WeChat Mini-Programs as Alternative to Big Platforms

purchasing journey wechat mini programs

WeChat’s own mini-program-based online shop can be a great solution for brands that are not keen on costly registration fees and commissions. However, on the other side if you decide to go with the mini program you will have to figure out the storage, deliveries, refunds, and other logistics by yourself which the big platforms usually cover.  Due to that, you will need to build the mini program by yourself.

In addition, another amazing advantage of a mini program store is that you are the owner of the data. Also, WeChat users who are already your followers are more known to be more likely to convert to customers and normally the average purchase is bigger than those on other platforms. We covered the pros and cons and how the most successful brands do it on our blog.

🛍 Why selling on WeChat can be better than selling on Tmall and other platforms?

In conclusion, the Chinese e-commerce market is in a fascinating state right now. And platforms are vying to have the best appeal to clients and businesses. However, nothing seems to be offered for free. In other words, brands must invest in order to sell products on these e-commerce platforms because of the publicity and sales they generate. Above all, China’s famous e-commerce festivals like 11.11 called Singles’ Day or 6.18 are a great opportunity for brands to generate more sales.

If you wish to know more about e-commerce and cross-border e-commerce in China or other marketing techniques, please contact our team. We use our knowledge and expertise to help businesses build meaningful partnerships and develop their networks among Chinese customers. For additional information, please contact us at contact@thewechatagency.com.

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