China is a lucrative market which many companies in Scotland would like to export their goods or services to, but they are often put off by a range of real and perceived barriers.
Despite being by far the biggest hub for e-commerce in the world, Western businesses can find China hard to break into. If companies decide to press ahead to try to access the market, they will have to dedicate a lot of investment and other resources if they are to have a chance of achieving success.
But with only about 2 per cent of Scotland’s exports currently going to China, it has a lot of untapped potential, so it would be wrong to write it off. Help is on hand from Glasgow-headquartered e-commerce specialist Unineed Group, which offers services from marketing to web development for clients with an eye on China.
Unineed has an in-depth knowledge of the nuances of the market. The company was founded by Lowell Wang, a Chinese national who originally came to Glasgow to study international marketing. It was created in response to the rapidly expanding Chinese e-commerce market and the growing demand for western products through cross-border sales.
To help companies overcome the main barriers to doing business in China, Unineed has built its end-to-end e-commerce platform comprising localised web development and hosting, payment gateways, marketing, distribution, translation, and customer service.
Alex Wheeler, commercial director at Unineed, says: “We have built up experience of doing business in China over several years. Using our knowledge of the market and tapping into the relationships we’ve developed, we’ve created an end-to-end package for clients looking to do business in China.”
It primarily targets mid-tier retail clients that would struggle to find the resources and expertise to go it alone. “Mid-tier retailers can’t be sure they would be able to successfully break into the Chinese market on their own,” says Wheeler. “They would need to hire Chinese-speaking employees, invest a lot of money into a website and cross lots of barriers, while facing the risk that what they’re doing won’t work.”
Unineed’s package removes a lot of risk for clients as well as expense as it operates largely by charging commission on what companies sell in China, rather than initial up-front fees.
In terms of web development and localisation, the first issue to overcome is loading times. Wheeler explains that non-optimised UK websites take around 30 to 40 seconds to load in China. That is a problem as 40 per cent of users will abandon a website that takes longer than three seconds to load. Unineed uses an advanced global content delivery network optimised for the Chinese market which has reduced loading times to under three seconds to satisfy most Chinese customers, and thus convert more sales.
China is also “mobile first” with about 80 per cent of web users making regular purchases on portable devices. Unineed designs websites to suit such online shopping habits.
There is also the challenge of the “great firewall of China” which is a combination of legislative and technological barriers to entry. While commercial western websites are not generally blocked, the problem of loading times makes them ineffective in generating sales. Using a range of technical strategies, Unineed mitigates the effects of the great firewall.
Wheeler says: “Chinese consumers drop off a website if it’s not loading at a phenomenal rate. The drop off after two and a half to three seconds is enormous. You have to hit under the three-second mark to get anywhere. About ten years ago, people were willing to wait, but now they are used to a very high standard of e-commerce.”
He says design is also a consideration, as Chinese sites tend to be “busier” than the more minimalist look of sites generally preferred in the UK.
The second part of Unineed’s package concerns payment gateways. In contrast to western markets where credit and debit card payments dominate, the Chinese market edges toward mobile payment platforms, mainly Alipay and WeChat pay.
“A payment system can be one of the most difficult things to set up if you are doing it from scratch,” says Wheeler. “It can be a fiendishly complex process for companies looking to get started, partly due to bureaucracy and communications barriers. But we have well-established relationships with the payment system companies.”
Turning to marketing, Wheeler says this service is at the core of what Unineed does, tapping into the relationships it has built up over the years with core partners, bloggers and influencers.
“We work with thousands of microbloggers, influencers and core partners from whom we generate most sales,” explains Wheeler. “I don’t know how successful anyone would be starting from scratch with no relationships, and the market is narrowing. It would be tough for mid-tier retailers to successfully market on their own without a massive budget and contacts.”
According to Unineed, affiliate marketing is the most effective way of generating sales in the Chinese e-commerce market. Unineed has established relationships with about 1,000 affiliates who work closely with its Chinese office. Influencer, or key opinion leader, marketing is also an important tool in China. And Unineed will establish and maintain social media channels in the market, including WeChat and Weibo.
When it comes to customer service, Wheeler says its service opens up communication between clients and potential buyers tailored to each company’s needs. It has multilingual service teams in Glasgow and China, as local-language customer service is expected in the market.
Translation is the fifth part of Unineed’s package and it recommends firms have a Chinese language website. “All big western brands have translated sites and that approach works better,” says Wheeler. “There are only about ten million English speakers in China out of a population of almost 1.4 billion.”
Finally, Unineed offers affordable distribution in China and uses the fact that it does high volumes to negotiate competitive rates. It offers favourable prices for international shipping, or clients can choose to use its bonded warehouse which was set up last-year in a Chinese government-supported tax-free zone.
It also manages customs compliance which can be complex for those without experience in the market.
To find out more, visit https://unineedgroup.com/.