Many readers know that Chinese e-commerce is ahead - or at least different - from the U.S. in fascinating ways. WeChat, China's most popular messaging platform, is embedded with brand/shopping in a way that Mark Zuckerberg surely salivates over. Video-based marketing is also at another level.
But at Shop.org's pre-conference workshop, Growing Digital Commerce in China, facilitated by the Global E-Commerce Leaders Forum (GELF), I learned that Chinese consumers also have a different - and more cautious - purchase behavior. That makes product launches trickier/more expensive. It also brings lessons for B2B companies everywhere, who must also earn trust across multiple touch points/stakeholders before purchase.
For its part, GELF has been documenting Chinese e-commerce in an ongoing study (you can see early findings and participate in the survey here). During a joint session, Kai Li, VP International, Revolve, and Kim Walls, Global GM, Lime Crime, shared how they launched Lime Crime on the Revolve commerce platform.
Lime Crime went from a unique beauty brand with little presence in China to a six figure revenue business, with Li optimistic on a seven figure target for next year (Lime Crime bills itself as "Vegan & Cruelty Free Makeup for Unicorns - makeup for girls and boys who express themselves unapologetically"). To pull it off, they had to overcome two big barriers: the cautious Chinese consumer and the obstacles to cross-border trade.
Li illustrated the nuance of pre-purchase behavior in China. Due to the low caliber of my quick photos, I won't share them all, but here's one that shows ten consumer touch points before purchase, including multiple social engagements:
As Li explained:
This a record of a customer, from the first time they landed on the Revolve website to their first purchase. It's very interesting to see this customer discovered us through her mobile phone social channel, on February 11th 2016. Then the second day, she came back through search of our Revolve name, and then during that period of time, [while at her office], she kept coming back and forth from different channels. She spent six hours researching us; she didn't buy anything. Ten days later, she came back again. This time, she became a social follower. Then she signed up with email. Roughly about three weeks later, she made her purchase for the first time.
Multiple devices and channels came into play. Eventually she reached a comfort level with the brand/product/info. But a cautious consumer isn't the only hurdle. Li broke out the obstacles to cross-border commerce:
- Language barriers - "I know Aramex, and SF-Express but what is UPS - Universal Power Supply?"
- Payment processing, currency conversion and refund - example: China-specific payment processing takes a whopping one half of each transaction.
- Logistics, duties, and taxes - and fielding "lots of questions from customers about them."
- Customer support - including the "I can't dial this number!" problem.
- Retailers' reputation - "Who are these people?" As per Li, you can make strides on this point by putting products on known platforms, and winning over key social influencers.
Li told the amusing story of a company that left a U.S. customer service phone number on a Chinese web site:
Unfortunately all the calls went to a 65 year old man living in western side of China. He went ballistic because some customers shop at 11 o'clock at night, and then they called that phone number. This guy kept waking up.
Given all that, it makes sense that Lime Crime made a big branding exception for their Chinese launch. As Walls told us:
This is the only country where we actually divert traffic away from our website, so it's a unified effort to let everybody in market know that Revolve was the only source of legitimate product in the country.
Li believes this made a difference:
That helped a lot to build up our own credibility of Lime Crime's fans in China. We could leverage existing Lime Crime fans, and then have them to participate on Revolve's official social account in China.
Revolve and Lime Crime settled on a launch strategy:
- It would be a phased approach
- Accumulate followers and make it fun
- Target your followers' followers
The launch had three phases. Here's my photo of phase one, "Build Seed Audiences."
On the right hand side, you can see an early success, a post on how to distinguish authentic Lime Crime products from fraudulent obtained 559K reads on Weibo.
For phase two, "Expand Audience Base," they sponsored the blogs of 20 key Chinese social influencers, sending them gift boxes of the most popular items. A product introduction by Chinese beauty blogger Naomi including a one hour live stream to introduce Lime Crime products which has 1,000,000+ views to date.
Phase three was the official product launch. Social fans were given a secret early access to launch products, with Revolve actively working with 2nd and 3rd circle influencers to help spread the word.
My take - why this worked, and how it applies to B2B
Walls added a key point:
Something that's come up several times is being a Western brand not wanting to be anything other than a Western brand. So one of the things that we started paying more attention to in our everyday activities was featuring makeup tutorials that show people who don't necessarily look like the typical Westerner to how to get the Lime Crime look. So we started shifting some of our content production and strategy around that, to show different eye shapes and different lip shapes and still achieve what is a very well defined Lime Crime look.
Additional launch lessons that jump out:
- Sophisticated tracking of consumer touch points
- Savvy use of social influencers
- Lime Crime having a clear and refreshing brand appeal that stands out
- Choosing a partner that can deal with the trade obstacles and is trusted by cautious Chinese consumers
One of the intriguing things here is whether this use case is relevant beyond China. I'd say yes, but more for B2B than B2C. For example, in B2B circles we struggle with attribution, and properly weighting all the touch points. In response to an audience question, Li said the same:
Baidu is basically Chinese Google. Baidu attribution is last touch. In the U.S. or in the Western world we are moving on from last touch to multi-touch attribution... The question here is: if you use last touch attribution that basically means that customer made the purchase, but in reality we pay for email, we pay for search, we pay for social, and in multi-touch attribution really it tells me, which channel is more valuable than the other so I can prioritize my spending.
Winning B2B customers is about reaching multiple influencers and a similar multi-touch is needed. We also need a way of tracking those touches, sometimes across "walled gardens" (LinkedIn, Facebook) where analytical data can be hard to come by, beyond a paid promotion.
B2B customer outreach - and trust building - is also about reaching influencers, though it's not as simple as paying them. If anything, you want to earn B2B influencer respect through an effective communications program. But the notion of reaching deeper into the circles of influence around a purchase resonates.
However, there may be less payoff for viral events in B2B. Sustained connections to influencers matters more than a big bang type event. Still, I found myself thinking that Chinese commerce is more similar than different. Those companies that establish value/relevance and yes, a bit of unconventional brand appeal have the edge - as long as they can do their best Amazon imitation and overcome buying friction.
For those curious on a deeper dive into Chinese e-commerce, GELF did a good job of presenting that content. I'll cover that in another Shop.org recap.