TaoBao_Mobile2

Is Weitao the Perfect Mix of Social Media and e-Commerce? #TaoBao

Taobao, the eBay style customer to customer e-commerce strand of Alibaba online shopping, has created its own social app called Weitao designed to give more interaction between buyers and sellers on the platform.  

TaoBaoStanding in direct competition with other apps such as WeChat and Weibo, Taobao are hoping that their new entry onto the social media landscape will help drive yet morebusiness for their shopping site. Weitao allows sellers to have customised pages linking directly to their shopping pages and to post comments and articles to their fans.

Taobao’s release of the mobile app also coincided with shutting down any QR code access for rival WeChat, a movewhich has suggested to onlookers that they are actively waging war on Tencent for mobile access. While still in its early stages, Weitao has potential for Western brands looking to reach a wider audience in China on a selling site such asTaobao.

Taobao is one of the most successful online shopping channels in China. According to Bloomberg Business Week: “Taobao has catered to Chinese preferences for doing business—for example, it’s enabled buyers and sellers to negotiate and bargain on prices.”(http://www.businessweek.com/articles/2014-02-18/the-secret-of-taobaos-success)

taobao_buildingTaobao, with 50% of the market share, towers above Western ecommerce rivals like Amazon who only have around 11%. While a large number of businesses on the site used to besmall, independent e-commerce operators, major brands have had more and more of an impact in recent years.  You can buy almost anything and the BBC recently reported on some of the strange products available from boyfriends for hire to live scorpions in a bag.

One of the problems for brands has been the prevalence of fake products and it’s something the ecommerce giant has only just recently admitted to and decided to take seriously. According to NetNames:  “Alibaba Group has certainly become more visible in recent months and is engaging more with brand owners, trade associations, law enforcement agencies and governments alike. This is good news, but there is still a long way to go to address brand owners legitimate concerns.”

The upshot is that hundreds of Taobao shops are being closed down on a daily basis but this is only the tip of the iceberg as far as well-known brands are concerned. Most debate that simply closing down online shops is not the answer and that more has to be done to close down the factories that produce the counterfeit goods.

For brands that as yet have no official presence in China, the chances are high that their products are on sale on Taobao, either as counterfeits or as goods imported by Chinese entrepreneurs living in the West and using loopholes in the system to make a profit.

With over 5 billion registered users and almost 500 million unique visits a day, it’s no wonder that Taobao is the number one ecommerce site in China and with the addition of the newWeitao app it could be set to become the platform of choice particularly for those brands making their first forays into the country.

Garnier China

How Brands Have to Adapt their Marketing in China

Brands have long been aware that what sells here in the West doesn’t necessarily sell that well in the East and nowhere is this more noticeable than in China.

Often seen as cut off from the rest of the world, the country represents one of the biggest retail markets for brands and succeeding in it is something akin to the Holy Grail.

According to Start Up China: “A 63% majority of international companies operating in China acknowledged that they needed to alter their product specifically for the Chinese market.  In most cases, this does not mean completely creating a new product or service, but rather making small adjustments to better suit Chinese culture and preferences.”

How Taobao got the edge over EBay taobao

A big difference between the West and countries like China is the way things are paid for, something which eBay were slow to take up.

  • Whereas eBay wanted people to pay by credit card, Taobao realised that many Chinese consumers didn’t have them or were worried about paying online. They introduced a way for a buyer to pay for a product in cash when it was delivered to the door.
  • EBay required sellers to pay for listing a product whereas Taobao decided to make its money from advertising revenue.
  • EBay didn’t particularly like that customer and seller would bargain on the price privately and so didn’t add a chat feature. Taobao accepted that the Chinese way is to haggle over the price and was happy to include a chat function that allowed this to happen.

Localisation is the key

According to Forbes, marketers make the mistake of treating China as one big market: “Treating China as a single market is a flawed concept – it’s 29 different provinces with their own peoples, dialects, customs and brand preferences. Procter & Gamble was one of the few U.S. marketers to realize this early on, investing extensively in proprietary research across multiple cities.”

Garnier ChinaNot only that, but social marketers have to deal with a whole swathe of localised digital platforms such as Weibo and WeChat. China’s social media landscape is vast and complex and choosing the right platform is integral to brand success particularly considering that there are around 500 million netizens and the number is growing.

Beware of bad translation

Many brands, both big and small have fallen foul of poor or ill advised translations of their products and key messages. When Pepsi first ventured into the market its slogan “Pepsi brings you back to life” translated to the Chinese public as “Pepsi brings your ancestors back from the grave” and KFC entered with “Finger licking good” which got translated as “eat your fingers off”.

In truth, many large brands have failed to do the research needed into the culture and customs of their target audience when moving their product into another country.

According to Mike Fromowitz of Ethnicity Multicultural Marketing and Advertising Inc.: “Many international companies have had problems with expanding their brands worldwide because they have failed to put in the research and effort necessary to understand the culture. This has led to several failed brands, to offended consumers, and to the loss of millions of dollars that comes with having to start all over again.”