Launching in China isn't that easy

If you're planning on launching digital products in the Chinese market, you should understand what it actually means...

If you’re an established Western brand, chances are that you’ll need to launch in China. This usually means creating localized digital experiences.

And more often than not, the first attempt falls short of expectations. Why is that?

Most companies enter the Chinese market using the same recipe they’ve used in other countries: take what you have in your main markets, usually USA and Europe, translate the end-user experience, make a couple additional tweaks to account for things like local forms of payment, and you’re ready to launch.

But China is not like other markets.

To create a compelling customer experience you’ll need to do a lot more on pretty much any level: technology, business model, UI and UX patterns, data architecture… And it’s very unlikely that you can do that all from your HQ: you’ll need people on the ground too.

Let me walk you through the why and how…

Why a copy-paste strategy won’t work?

In short, China is a very differentiated market:

  • Your servers have to be in China: for latency reasons due to the Great Firewall of China, but also to get an ICP license, which is required to get your apps published in most cases (iOS, WeChat mini-program, …).
  • Your customer data can’t be hosted abroad: in the past few years, China has implemented a data protection framework with DSL, PIPL and CSL. Mostly, this means a lot of your data must be hosted in China.
  • The digital landscape is unique: platforms and super-apps like WeChat, Alipay and Taobao/Tmall means users aren’t discovering and consuming digital experiences the same way. Search and web apps may work great in the West, but in China you’ll likely have to build on these platforms. To illustrate this, we often recommend to use websites purely for branding, redirecting most traffic to other platforms (WeChat, Tmall, …).
  • The customer experience is radically different: more specifically, what you know about UI and UX won’t help you much in China. In e-commerce for example, checkout and payment is completely different: you wouldn’t expect to fill in all your info in a form and register for an account, it’s all done in one or two steps with WeChat pay or Alipay. Another example: nobody uses email, it’s all mobile or social login (WeChat or similar). Customer support as well.
  • Your tech will break in China: there’s an endless list of things that simply won’t work in China. You can’t use global payment providers like Stripe, most global CDNs and cloud providers have no presence, the Android app store ecosystem is made of dozens of platforms, … And the list goes on.

So what can I do?

There is no silver bullet, but we usually help our client address the following 4 points:

  1. Re-evaluate your business strategy: is the Chinese market even a fit? Will it justify the investment? For example, a subscription business model is going to be very hard, if possible at all, in China. You may need to rethink your monetization approach for China or come with an entirely different product.
  2. Commit to having people on the ground: you can’t drive a successful strategy from halfway around the world. You’ll need a team in China, immersed in the market and with enough agency to influence your strategy. Hiring a team like ours can work for a time, but we always recommend our clients to build their own team as well, if only on the product and strategy front.
  3. Localize your infrastructure: you’ll likely need at least a middleware to localize your backend stack, a CDP to collect all of your customer data and local apps (a WeChat mini-program or mobile apps are a good place to start). You’ll also need a local cloud provider like Alibaba Cloud or Tencent Cloud. AWS and Azure are also options but have a much smaller footprint and their Chinese versions don’t necessarily have all the same features as in the West.
  4. Leverage the Chinese ecosystem: you will need to, if only to support Chinese payment options (e.g. WeChat Pay, Alipay). But you should also be looking into one of the many options that would help you validate your assumptions with a limited investment: WeChat, Tmall, JD, RED, Douyin… We also usually recommend you leverage best-in-class platforms for customer support and social media management (i.e. Social CRM).

A case study: GOAT

Mockups of the GOAT mini-program

A few years back, we helped launch GOAT, a global online sneaker’s marketplace, in China.

While they already had an established e-commerce website as well as mobile apps, we decided to launch in China with a WeChat mini-program.

We were able to go to market quickly, with an app that was simpler and allowed us to validate a lot of the business assumptions. We also stood up a middleware in China that integrated with their global platform (including Shopify Plus).

After a few iterations, GOAT had enough confidence in the local market to invest further. They grew their own team and built their mobile apps on top of the same middleware we had put in place for WeChat.

China requires commitment…

We went through the same exact steps as GOAT with dozens of brands: Burberry, Hilton, Starbucks, Galderma, General Motors… They all had to grapple with the same challenges and in the end applied a very similar playbook.

Recognize that China is a very differentiated market and that you’ll need to commit to a much more localized approach than elsewhere.

And a key part of this will be your investment in local talent, whether it’s hiring a consultancy like Wiredcraft or building your own team on the ground (and preferably both).

And if you’re successful, you’ll need to figure out how to keep your hyper localized platforms in sync with your global ones. It’s a difficult balance to strike. We’ll cover some of this in our upcoming “Omnichannel Blueprint” ebook (subscribe to our newsletter and we’ll let you know once it’s out).

Quentin Berder
Product director
Posted on November 07, 2022 in Strategy

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