How UK Retailers Can Capitalise on China’s Demand For ‘Brand Britain’

China represents a multi-billion pound opportunity for British businesses. But tapping into the world’s largest e-commerce market means understanding Chinese consumer nuances and tailoring products, services and a customer experience to match.

 

It’s been a tough past year for British retailers. Amidst uncertain times domestically though, a retail gold rush awaits abroad. It might be thousands of miles away physically, but online, China is just a few clicks away; and its shoppers have money to spend.

 

An e-commerce market ripe for the picking

 

Despite China’s current Covid-19-related image problem, there’s no doubting its enormous e-commerce potential. Forecasts show that China will be responsible for more than half of all e-commerce sales worldwide in 2021. What’s more, with revenue projected to exceed £909,000m, it’s more than the total market size of the next nine on the list of the top ten largest e-commerce markets.

 

This isn’t just an opportunity for local retailers though – a significant and growing portion of this e-commerce market is cross-border. Specifically: Chinese consumers buying from overseas markets. Consulting firm Westwin reports that cross-border e-commerce in China reached almost £46 billion in 2019, and while that figure dropped slightly in 2020, it is expected to recover and then some in 2021 and beyond. 

 

Key areas of opportunity are the health and wellness, and skincare and cosmetics sectors, with at least half of consumers increasing their spending in these areas. Other sectors set to benefit include education and training, professional services, and fine jewellery.

 

Entering China: Brand Britain

 

It’s good news for no one more so than British retailers. China has a long-held love affair with all things British, and with tourism currently limited, there’s no better time to capitalise on e-commerce.

 

Whether it’s the association with heritage, luxury, quality, design or kitsch, Chinese consumers go out of their way to buy British. One study found that almost 60% would pay more for goods made in the U.K. 

 

A Chance to Rethink Traditional E-Commerce Models

 

But while the Britishness of brands is a strong sell in China, it’s a notoriously challenging market to enter. A Western model of business that includes familiar social media channels, and equally familiar payment gateways, is irrelevant in China.

 

Partnering with a marketing consultancy with Chinese expertise is the best way to navigate the market and boost a businesses chances of success. So too is rethinking plans to copy and paste the type of business strategy that has worked at ‘home’. Here, success means adopting one that speaks directly to China’s consumers.

 

Here are three key considerations to ensure you strike gold.

 

 

1. Embrace Mobile

 

It’s one of the biggest smartphone markets in the world, so it’s no surprise that Chinese customers are making the vast majority of their e-commerce transactions via mobile – 788 million customers in 2020, in fact, with that number anticipated to increase in 2021.

 

Winning over China’s experienced digital and mobile shoppers isn’t about just ensuring websites are optimised for smartphones, though. Notoriously open to and welcoming of new e-commerce tech, they want more.

 

Offering interactive 360-degree product views and videos, and embracing AI technology to incorporate virtual personal shoppers, and even virtual try-ons (as rolled out by British cosmetics brand Charlotte Tilbury) are powerful ways to engage with these types of consumers.

 

Ultimately though, a strategy to win over Chinese mobile e-commerce users must have a solid foundation. 

 

“First get the basics right – this means banishing the half-hearted pixelated thumbnail product images and start regarding online propositions seriously as a powerful medium for driving engagement, winning consumer loyalty and delivering sales.” James Hebbert, UK Managing Director of Hylink, China’s largest independent digital advertising agency.

 

2. Own Your Heritage

 

Embracing British stereotypes as a marketing strategy designed to win over the Chinese can prove incredibly successful. Just ask luxury brands like Rolls Royce and Burberry. Their unequivocally British products have found arguably more commercial success in the East, in recent years, than on home soil.

 

In fact, a survey conducted by Barclay’s found that three-quarters of 25-34-year-olds in China would be swayed to buy a product purely because of the placement of a Union Jack.

 

But while UK-inspired products may perform well, it would be shortsighted to merely slap a UK flag on every product. Ditto relying solely on ‘Made in Britain’ branding.

 

Ensuring your brand’s story is communicated can prove seriously effective in building identity and loyalty with Chinese shoppers. And part of this is its birthplace and the personal stories behind its founders,

 

Take Dyson, a market leader in China across multiple categories. It’s been incredibly successful in adapting its products for the local market, but beyond that, there is a serious love for the man himself, in part due to his personal branding and position as the very public face of the company. 

 

3. Don’t Be Afraid to Localise

 

Website translation and ensuring that fashion meets Chinese demand for small sizing are obvious steps to localising your brand. Beyond these types of examples, however, there’s much that can be done to ensure products and services are tailored to meet Chinese demand.

 

Embracing the unique cultural differences between China and the West can have significant commercial pay-off. While marketing and branding in the U.K often focus on minimalism, digital storefronts adopt a more-is-more approach in China. There, the emphasis is on bold, type and illustration-led design.

 

Then there’s the appeal of products themselves. In China, men’s cosmetics and skincare aren’t seen as threats to masculinity. Instead, they’re considered an essential part of personal growth; as much a part of their self-care as taking a shower. 

 

“There are six guys in my dorm, and we regularly use facial masks or essences before we go to sleep… It is just a way to improve myself, like going to the gym.” Xiaoming Zhao, a 20-year-old college student in Guangzhou, to Jing Daily. 

 

Companies like Estee Lauder, Lancome, and Nivea have taken note. All three have localised marketing and packaging with this outlook in mind, and have reaped the rewards. 

 

Want to join them? We can help. Find out how our cross-border payment solutions and marketing can help you meet your business goals in China.