Should you use resellers to enter the Chinese market?

Using resellers to enter the Chinese market is an important part of the puzzle. In most markets, retailers actively try to avoid unauthorised parties reselling their products through their own platforms. The potential to lose control of their brand messaging and reputation is too big a risk to take.

However, using resellers can be a great tactic to break into the Chinese market and is one that I recommend for some of my clients. Here I’m going to explain why and give you some tips on how to implement this kind of strategy

Why are resellers useful in China?

There are a number of reasons why I recommend the use of resellers for breaking into the Chinese market. It’s important to note though that there’s no “one size fits all” strategy for success here.

Here are some of the main considerations that make resellers such a useful commodity when launching your brand in China:

– As many Western social media and digital platforms are blocked in China, you’ll need to build your brands presence from scratch on the platforms available in the country. This often works out to be a very expensive approach as you have to invest in a great deal of paid advertising to gain traction. In some cases, you may find that Chinese consumers have discovered your brand through overseas Chinese posting about them or people using a VPN to bypass sites that are blocked, but even then, you’d expect your brand awareness to be small.

– Chinese consumers rarely buy directly from a brand’s website, instead preferring to go to e-commerce marketplaces, such as Tmall, Taobao, Douyin and JD. It’s important to try to work with this behavioural trend, rather than against it, as it isn’t something that will change just because they like your products.

– China has a unique and distinct culture, which combines an intricate blend of historic convention and rapid innovation. If you aren’t familiar with the nuances of the culture it can be hard to successfully navigate, so it makes sense to use the skills of people who are.

How to work with Chinese resellers

To ensure your greatest chances of success when using this strategy there are a few points to consider.

1. Be strategic from the start

Whilst it may be tempting to try to get the biggest retailers to pick up your products from the offset, it’s often better to start by thinking on a smaller scale than this. A market entry strategy I often use with my clients is for you to encourage daigous in your existing markets to buy your brand’s products.

Daigous are Chinese people who live in other countries and source products to sell back home, importing the products to China. They can be individuals working by themselves, though are increasingly part of a wider network.

They’re able to use their Chinese networks and communication tools, such as WeChat and Weibo, to spread the word about your products in private networks that are closed off to Western businesses initially.

2. Remember that the resellers are not your usual stockists

Whilst stockists in your home market should respect your brand guidelines and will (hopefully) be open to you having input into the sales of your products, Chinese resellers don’t work in quite the same way. Culturally there are a lot of differences – much of the China market is driven by deals aka discounts, the resellers often have a wide variety of brands so you may be sold alongside mass-market brands for example. Plus, no matter how established you may be in your home market, your brand may hold little weight with them yet. But, when done in the right way, there are ways to partner and manage pricing and visual identity.

3. Don’t forget to trademark your brand

Unfortunately, a big pitfall of the Chinese market is trademark issues. There are many brands big and small who have trademark issues in China. So, before you embark on any work in China, please make sure you have all of your trademarks in order.

If you’d like to find out more about using resellers to launch your products in China why not get in touch or take a look at my online course.

Suggested Blog to Read:

If you want to know more about the Chinese Market, you may read the full article of my interview with Ivy Chan about Cross border e-commerce in China

You may watch the full podcast episode on my Youtube Chanel.

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