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Engage your Chinese Consumers Better

Taobao Merchants Struggle to Sell.

Sales people introduce mobile phone products to customers through livestreaming at a shopping mall in Zhengzhou, capital of Central China's Henan province, on March 13, 2020. [Photo/Xinhua]

Hello and welcome back to Aim2D for Tuesday February 22nd. Today look at an article indepth from one of our recommended China business, tech and social media sources. The topic is the negative impact China’s live streaming is having on some traditional Taobao merchants. We also offer our perspective.

Breaking China Business, Marketing, Tech and social News

OK, lets get to it. In our page “Breaking News” we link to around a dozen different publications that carry credible, objective, helpful and relevant stories news or trends to help businesses, large or small, make the right choices and decisions when researching a China market entry. Today we will highlight two – from different ends of the the spectrum.

China Daily

Whilst Caixin is our goto workhorse for serious, daily updates relating to China business, China Daily is at the other end of the spectrum. A lighter weight than Caixin, less objective overall as it does come from a pro China perspective. Never-the-less, it is an excellent guide to what is happening in China.

Again; like Caixin is covers the field from political to social. There is also a Global issue, however, we link to domestic business and technology news.

Jing Daily

Based in the US, Jing daily focuses on China Luxury. In their own words:
“We publish news, reports on key trends, insights from leading industry figures, and in-depth analysis of the vitally important luxury market in China.”

Even if your business is not lux related, it is a valuable indication of changing trends in China

Today we would, again, like to take a closer look at another of the publications we follow and recommend – Sixth Tone. Shanghai based Sixth tone is one of the rising breed of Chinese media that is not afraid to push the limits when it comes to reporting. A quick look will show that it is not afraid to handle issues that other publications may consider a little too sensitive and that Chinese citizens are not afraid to speak out in criticism of their government. This tends to fly in the face on many western mass media stories of a downtrodden population too afraid to open their mouth and when they do it is quickly censored.

Today’s story Wu Peiyue takes a look at the rise and fall, mostly the fall, of small China businesses who were once the darling of the Taobao e-commerce sector.

Before we leap into Peiyue’s story, let’s set a little background. For those wondering Taubao is one of China’s original online shopping malls. Small businesses / sole traders renting space in which to promote their wares or services. You get the idea? E-bay!

What is known as “Urban Drift” helped many younger country people learn news skills in the the cities. This, Taobao and other similar platforms empowered many to return and set up their own small business, oft from their home. The tools and support offered by these platforms helped many flourish, expand, and continue to grow and prosper.

Until the arrival of the New Kid on the block – the showy, flashy, over-hyped world of on line live streaming and the rise of a new breed of agencies. The MCN agencies, (Multi Channel Network) middlemen, who, in a short time have manged to practically monopolise and control China’s live streaming industry. Working to the disadvantage of many of Taobao’s smaller traders.

Now, just before we jump into Peiyue’s article, let’s offer some balance and look at it from another perspective. Many of these traders established their business over a decade ago. In China, that is a very, very long time. There is a business maxim from the 1970’s which paraphrased, suggests:

one can not be in business today, uses yesterday’s tools and hope to be still in business tomorrow.

To wit the hardworking blacksmith in days of yore. Once the centre, if not the pillar of medieval life and few years beyond, the Smithy is now all but extinct. An artisan who today plies his craft more as a hobby or leisure activity for niche demands. Whether you think of social media as the devil or god almighty, truth is most SME’s would struggle without it today. Just as in nature where it is adapt or die, so it is in business. Law of the jungle. Survival of the fittest.

We also mentioned the dramatic and rapid change in China. Not just the advent of live streaming as a must have marketing tool, but technically and socially also. Chinese consumers are now better educated, more aware, savvy if you will. If the ubiquitous, do everything WeChat wasn’t enough, there are now apps for almost everything one needs to do in life. All from that slab of all knowing, all seeing black plastic. All without leaving the comfort of one’s sofa.

Many of the, past large working class have morphed into a well to do middle class and beyond. Their tastes and expectations are different. Higher in many aspects. As this class expands, possibly the traditional Taobao stores customer base will shrink exponentially? Survival of the fittest?

IKEA in China

As a further example of China’s consumers changing tastes, sophistication and awareness, we can look at the Swedish flat pack store IKEA. Established in Beijing well over 20 years ago that the Bic is aware of, it was up until the last 5 years or so an odd place. The cavernous building was always chocked full of people, resting on beds, reclining in rockers, testing, trying. Yet for the most part the dozen or so check outs sat silent. It was a standing joke of the day. ” People went to IKEA for lunch and to take photos! “(Maybe went home and bought a Taobao “knock off)

Today IKEA is a different place. It is still as busy as ever, the restaurant has been expanded yet is still over capacity, especially at weekends. But lo, now one has a 20 to 40 minute wait at checkout as customers with several trolleys stacked high with DIY goods are trundled through the cashier.

Peiyue’s story however is not just a look at how bigger agencies are slowly squeezing out smaller players, but also a warning to foreign businesses that there is more beneath the water in China business than may first meet the eye. What may seem calm, plain sailing at the outset can quickly turn into a capsizing squall. Do due diligence and don’t be afraid to ask questions – that is what we are here for.

So, we have offered an alternative view, but the reality is more complex. It isn’t all about ageing, untech merchants or traditional goods, as this quote from a 20 year old tea seller illustrates:

“At the beginning of the Taobao era, you just needed to source good products, post good photographs of them, and write a clever slogan.

A successful livestreaming sale requires not only a talented host with live sales skills but also a professional team to do technical support.”

Wu Peiyue

For a better understanding and deeper insight into the fast moving, turbulent and fluid China consumer market, please read Wu Peiyue’s article: In Taobao Villages, Merchants Say They’re Struggling with Livestreaming

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If you’re looking for guidance, tips, advice on any aspect of starting or growing a business in China or training, coaching your existing China marketing team for excellence, be sure to check out Uengager. Home page and base for Everlyne Yu. Read her short bio – opposite left – or contact her direct – below – for a free, heart to heart chat.

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