Jake Trask is an FX Research Director at OFX. where he helps online sellers with overseas payments. Today he shares his top tips for small businesses preparing for Singles’ Day:
Taking place on the 11th November and promoted by China’s ecommerce giant Alibaba, Singles’ Day is the world’s biggest retail event, with sales far exceeding those on both Black Friday and Cyber Monday combined. In 2017, record-breaking spending exceeded $25 billion in 24 hours and this figure is widely expected to be beaten in 2018. For UK businesses, it’s a huge opportunity to sell online to Chinese consumers.
The UK is the second most popular overseas online destination for Chinese shoppers, with 55% buying something from the UK in the three-month period March – May 2017. For many British businesses, the opportunity for international retail events such as Singles’ Day to increase brand awareness and broaden their customer base will also highlight the appeal of developing a more comprehensive Chinese export strategy.
There are a few simple actions businesses can take to prepare for a successful Singles’ Day, and bear in mind when selling to China in the longer run:
Have a comprehensive shipping strategy and offer an efficient returns policy
Don’t overlook logistics – it’s critical to match your customers’ expectations with your shipping times, especially when delivering to China. If a Chinese consumer is buying an item on Singles’ Day, they’ll almost certainly want it delivered as soon as possible. This can lead to some problems for those UK businesses who haven’t given themselves enough time to plan their logistics early. A Royal Mail study last year found that when it comes to delivery, China’s online shoppers have very high expectations and 88% spend time hunting for those websites which offer free delivery. Offering the option of returning goods is also crucial, with over 91% more likely to shop with a retailer that has a clear returns policy. Choose a global delivery partner with local expertise to ensure you’re ticking all the right boxes.
Know your customer and how to reach them
Even the largest, most successful Western brands have trouble selling to China as they often misunderstand the market and miscommunicate their brand. However, it does not have to be this way for small businesses. To turn any potential browsers into buyers, British businesses need to tailor the online shopping experience to Chinese tastes and engage Chinese consumers in the right places. For instance, almost everyone who owns a smartphone in China is an active user of WeChat. It can be a good place to market to Chinese consumers, as well as a smart way for them to convert straight from browsing to buying via integration with WeChat Pay. WeChat has 902 million daily active users and has an average of one million transactions per minute.
Have a coherent currency strategy
At the moment, the weak pound (tied to ongoing uncertainty around Brexit) means Chinese consumers are going to get more for their money when buying British, and so there will be an increased interest in British products during Singles’ Day. When selling overseas, retailers should be sure to have a strong currency strategy in place to maximise their profits. A virtual currency account, which offers the option of holding multiple currencies in one place, is a particularly valuable tool to use when selling to China. Forward contracts are also helpful, as they allow you to lock in favourable exchange rates to protect against unwanted volatility and secure the cost of doing business. The right FX partner can help develop the best currency strategy for your business, and provide 24-hour expert analysis and insight on where the market is moving.
Tap into the special appeal of Brand Britain
A common mistake for British businesses is to dramatically change the look and feel of their products to better suit Chinese consumers, and to update their labelling to the local language. In fact, there is a real appetite amongst Chinese consumers for “Brand Britain”, meaning goods from British businesses that are of good quality, rich heritage and modern design. Over 130 UK brands took part in Singles’ Day last year, including Burberry, Marks & Spencer, New Look and LK Bennett. Any British business looking to cut through a very crowded Singles’ Day marketplace this year would do well to play up to their British origins in order to reach those Chinese customers looking for something different.