DermiClean is thinking seriously about partnering with TPs. How to start? They could launch and run the e-store themselves and establish a team in China. That’s a no-go for DermiClean, as it involves another level of structure and regulatory compliance, large management loads and high costs. This all before product, logistics, selling and marketing expenses.
The majority of SMEs and even many MNCs contract with TPs, companies that are officially approved by Tmall and other platforms to operate stores. There are different TP models, such as the management contract model or the general distributor model. TPs work on the following:
store management - running the store on a daily basis
logistics
customer service (may be outsourced)
digital marketing
Remember that e-commerce in China is a 24/7 real-time business. It is always ‘on’. Deep interaction with e-commerce in the home market gives a flavor of this, but in China e-commerce is on steroids. A number of unique demands are placed on the TP and the company to be successful in China. For companies where e-commerce is a secondary channel in its home market, this can lead to poor decision making.
It is critical that a company’s product value proposition, presentation, positioning and pricing be thought through. Sometimes companies underestimate the sophistication of their target customers or the competition’s abilities. This can lead to disaster.
It is rare that a product will do well in China without modification to home market practices. The international cachet of the product is a critical element, but a company often needs to alter or upgrade elements of its offering. In China consumer markets, there is both strong competition from domestic companies, as well as the best of international competition vying for the same consumer attention. Such adjustments need not be expensive but overlooking real conditions may undermine success.
Digital marketing is a world to itself. An integrated approach where elements work in parallel and serial fashion is typically the best approach. For some brands KOL live broadcasts may be optimal, whereas for others these have lower utility. In the first stage of the e-store, spending on internal pay per-click programs is important to generate traffic. The ratings of the store, comments and volumes are key evaluation criteria for many Chinese consumers. These elements require constant attention. And this is before you address the variety of shopping festivals for which China e-commerce is famous, including 11-11.