The majority of Chinese consumers shop via mobile. What does this mean for e-commerce?
This is a new trend, and shopping via mobile in China increases every year. It means that consumers spend less time on each website. Mobile shopping is more of a repetition behavior. First-time purchases are normally made on a computer, where consumers invest more time to look at the features and details of a product. More mobile purchases could be an indicator that more consumers buy the same products.
How can Swiss SMEs assess if China is a market for their products?
If companies already have a distributor, they know that they have a market. If this is not the case, companies can check the C2C platform Taobao to see if their product is listed. Although they might not be officially selling to China, their products might already be sold there. For example, there are many Chinese in Switzerland, who buy our Bimbosan products in pharmacies and then sell them to Chinese consumers using the Taobao platform.
Which products are suited for e-commerce and why?
It’s probably easier to say which products are not suited for e-commerce. Under this category fall large goods, such as furniture or beds, goods that have to be temperature-controlled, or heavy goods with relatively low value but high logistics costs, as is the case for mineral water, for example.
How do online shopping malls such as Tmall work?
90% of online sales in China are generated by two platforms, Tmall (by Alibaba) and JD. Therefore, operating your own website to create online sales in China is unlikely to be successful. In that respect, search engines such as Baidu are not relevant for purchasing things, but more for obtaining expertise or finding out where to go. For purchasing, Tmall and JD serve as a search engine – you simply type in the product you’re looking for, such as “hat” or “shoes”, and look at the search results.
How do Swiss products get found on Chinese platforms?
The keyword here is Search Engine Optimization (SEO). The more you sell, the higher you appear in search results. Companies should invest in SEO and buy keywords on a pay-per-click basis. The more you pay for a keyword, the higher your products appear in the search results. And the more you sell, the higher you appear. It is crucial to participate in online sales events such as Double 11, or industry-specific events such as food weeks. There, you receive a better placement depending on the discount you give to your consumers. The larger the discount (i.e. 20% or 30%), the better your placement, the higher your sales, and the higher the ranking in the search engine.
Bimbosan is a Swiss company that produces premium special baby food. How did you start doing business in China?
We started with a traditional sales partner, whom we still work with today, and who sells through supermarkets and baby stores. The demand for our products was so high that we started selling our products via the two major platforms Tmall and JD a few years ago.
Consumers still remember the melamine scandal from 2008 and more that followed. Trust in Chinese milk products is still low. Is there a lot of competition from Swiss or foreign companies in your segment?
The repercussions of these events still linger today, in the sense that foreign players have grabbed a large market share from the Chinese. As a consequence, our main competitors are not Chinese but foreign brands – other dairy producers from France, Ireland, Germany or the Netherlands, for example. They have a slightly lower pricing than we do, so we have to make an effort to show why our Swiss brand and product is of higher value.
What are the three pieces of advice you would give to exporting Swiss SMEs looking into e-commerce in China?
First, be sure that e-commerce is the right strategy for you, as there can be a cannibalization between offline and online. Second, choose your service partner wisely. Your partner needs to have experience in the industry and be able to show results – binding sales targets are key. Third, build expertise inside your company. Someone needs to be responsible internally to learn from your sales partner and the Chinese consumers and take charge if you want to be successful in the long term.
About Kilian Widmer
Kilian Widmer is Head of Export for Bimbosan. After graduating from the University of Berne, Switzerland, with a Master's degree in economics, he spent ten years in China. From 2009 until 2014, he was Trade Promotion Director at the Swiss Business Hub China in the Embassy of Switzerland in Beijing and later on at the Consulate General of Switzerland in Shanghai. From 2014 until the end of 2015, he was the General Manager of Swissmooh, a Swiss dairy company based in the coastal Chinese city of Qingdao, selling Swiss cheese, milk and chocolates. At the beginning of 2016, Kilian Widmer and his family relocated back to Switzerland, and he started his job as Head of Export for Bimbosan based in Welschenrohr, Solothurn.
Bimbosan is a Swiss company founded in 1932 that produces premium special baby food, most notably infant formulas and cereals. Bimbosan puts a high focus on sustainability and, wherever possible, offers its customers products in organic quality. In Switzerland, Bimbosan is the market leader in the pharmacy and drug store channel. Since 2012 Bimbosan has consequently been focusing on exports, with China being the most important export market. www.bimbosan.ch