E-commerce in China: when platforms support to master the market

E-commerce in China is for sure becoming literally a boom-phenomenon.  It’s like the first fast crazy running we got towards East at the end of 90’s  when everybody was looking at China as new economic power in the world.

And it must be so when we are facing with the biggest market in the world in terms of demand and wideness for online sales.

According with recent analysis we are going to overpass 600 millions of internet users until 2015 and around 150 millions of users in 2010 have been confirmed as already frequent buyers online; but more interesting to know,  the number of buyers should grow till approximately 520 millions of users before the end of 2015: effectively an incredible result if we consider that in Europe according with Statista© we will be able to reach approximately 190 millions of buyers at least in the same period.

infografika-1024x463

Usually when we think about e-commerce in China we could be stunk referring to complicated and un-protected system to develop online selling platforms. I think that problems concerning property rights and copycat’s risks should be pointed out as first element of the matters, but I would like to remind you that “the democracy of buying whatever you want” is one of most important perspectives followed strongly from 2010 by central Government and in general the legal system and also the awareness of consumers on buying original brands are bringing investors and developers to enjoy more safe and equilibrate environment.

Let’s check what kind of de-regulamentation nowadays represents a concrete step ahead for the development of the e-commerce environment in China

1500px-Flag_of_the_Peoples_Republic_of_China.svg_– 2010 with the  shangzizi 2010 n 272 the online sales are accepted as regular and natural prosecution of usual commercial activity for foreign companies so also  foreign investors are now allowed to make their products on sale online without any particular requirement as involvement of chinese co-investor and without any particular approval or distinctive business license issued by MOFCOM

– Then if you are not service provider for other operators but if you want to sell throughout your online platform your goods you don’t have to apply for specific ICP (internet content protocol) as it’s compulsory for providers that create online stores in name of  third operators

The second point is very interesting and represent a boost for online businesses: if you are a foreign company with base in China you can immediately open your e-commerce service without any other specific approval or license.

I’m used to suggest to follow this way to my clients ‘cause it represents a great system to educate customers to approach specific brand or production enjoying in particular sharing opinion’s tools and crossing information through social networks. I really think that even if volume of sales are one of most important goals for an online-store, we have to remember that in China the access to information through browsers represent the first step to get well detailed info and in particular comments from other users.

Chinois-shopper

Even if it seems more easy and quick try to being represented by third platforms like some services that T-Mall (owned by giant Alibaba) in particular when the company doesn’t present any legal entity registered on chinese market, we should remember that in this cases it’s more difficult to guarantee legal safety against fraudulent dynamics and payment is required oat of the times in foreign currency by exporters (due of absence of corporate- presence on chinese market) and it’s not always easy to pay for common users.

As researcher on marketing strategy for China I well recommend to place own brand or group of brands through e-commerce platform after registering own WOFE into chinese market , not only because it would be for real a concrete internationalization’s goal but also due to head for more well framed condition to boost own identity and at the same time to speed the realization of direct online store in safe and well guarantee condition without any specific additional business license.

as i’m used to say, chinese market follows specific P’s to ensure successful results on sales then

– Products: quality and distinctive features must be mediated with concrete perception of what chinese consumer is looking forward; and sometimes such elements cannot be put on focused so much through general e-commerce portal not directly managed by own management and partially created with third operators.

– Popularity: being online doesn’t mean only be sold on the web. The strategy of “word of mouth” needs to be boosted through social networks and specific promotion about brand and production that sometimes needs more intensive effort than general information  summed up in general categories of multi brand online sales.

– Price : information without price it’s not so attractive for chinese customers. They need to feel they are enjoying special bargain (it doesn’t matter if we are talking about middle level products or luxury). In particular if we have something to sell that fits with medium target, the announce of special sales are really attractive among young customers, otherwise the placement of products with high price for luxury field should be successful among specific senior targets

– Passion: chinese people loves to join shengyi (business) on both sides, as sellers as long as clients; being present in the market make us more aware about chinese culture and market’s needs. I think that e-commerce can express for real such passion on doing business into chinese market as more as you can be aware about what does China represent not only as producer but also as commercial operator who choose to invest in China.

I think that chinese law’s system will proceed on more concrete and responsible way to protect property rights against copycat’s actions and government will do all the best to boost  development for one of crucial factors for contemporary chinese economy like online businesses.

 

Annunci

If Alibaba starts to be strategic partnered service platform for italian brands are we sure to get ready soon for that?

Last month we got first Matteo Renzi’s institutional mission as italian prime minister during official visit in Beijing. And after France and UK it was our turn to sign specific agreements for mutual development on key sectors, and talking about chinese market, as I’m already teaching for executive master programs in NIBI for Internationalization of Businesses on Eastern Asia Markets (New Institute for International Business in Milan), we need first of all to keep on mind how nowadays is very important the role of online sales for import-brands in China.

That’s why the first interlocutor for our Ministry of Economic Development  Mrs. Federica Guidi was Alibaba, main player for online sales that is boosting two specific platforms like Tmall and Taobao for B2c dynamics also for imported products.

elibaba e iitalia

As clarified in presence of chinese prime minister Li Keqiang, some brands as made in italy’s production, have been already introduced some years ago on Alibaba but comparing with other products and brands they are still few and needs more promotion.

In particular it’s really necessary to develop some specific strategies to make on focus features of italian productive’s excellences cause most of the times even if chinese market is pretty interested to buy foreign high quality’s products online, they are not well aware about brands, own distinctive features as much as they’ve never been in Italy before or well familiar with specific products.

In addition if also we should consider how communications strategy and publicity are on continuous development in China, where recently there’s going on get structured well framed scenario for promotion, marketing and PR than before, but comparing with western professional tools of doing business communication they cannot be used as entry-keys for the market,  to facilitate sales of specific brands with high level’s distinctive features, first of all it’s important for foreign brands to be represented as “available” products. So Alibaba is really good choice to start on doing that.

The hardest point on dealing with big group as Alibaba for small medium company  consist of some barriers on company’s registration and access to its services for manufacturers, cause usually in the past Alibaba allowed chinese distributors or whole sellers only as contractors for own specific online sales platforms for b2C  (like Tmall and Taobao).

We needed political and institutional introduction to sit down at negotiation’s table with Mr. Jack Ma, patron of Alibaba, and the strategy of our government seemed having sense in this step: made in italy means excellent quality, small production comparing with potential of chinese market and companies with familiar or low managerial trust’s asset (cfr Francis Fukuyama’s definition about italian corporate system) so the first way to consider internationalization should be get preliminary access on online sales platform as facilitate dimension of entry as follows

– even if the company is still present in Italy without any particular official JV with chinese whole seller / distributor

– simple contracts to get access to services offered by Alibaba

– dedicated team taking care of italian brands

– cooperation for defense of intellectual property for italian products

Even if the agreement represents a new important step ahead it still remains to understand in which way our SME will be able to join such preferential assistance for promoting on Alibaba, the costs of the service and in particular who will manage selection of brands and in which terms (the agreement specifies particular interest for luxury and  high level’s products).

Personally speaking I think that ITA (Italian Trade Agency) directly linked with Ministry for Economic Development, will have important role about such dynamics  and the key person of this joint-program was first of all Fu Yixiang vice-president of Italian – Chinese Chamber of Commerce in Rome, whom introduced Jack Ma on considering this cooperation’s perspective with our Government.  So the match starts as political / institutional agenda.

I think that “the red card” ( or rather political involvement on boosting business issues with chinese counterpart) is totally good strategy (as whoever works with China well knows the importance of political action on market’s issues) but the matter now is represented by orientation’s scheme for brands and companies that would be introduced on online sales maker in China.

china sales

Indeed doing online business in China is totally different than in Europe, USA or Japan and it needs specific training cause probably most of italian SME still don’t have “fully equipped” departments to realize as this step is really internationalization’s matter.

Some successful companies like YOOX for example, if we think about fashion’s brands, put on feature the lack of skills for our brands on approaching online sales in China from 2008 and prepared the best way to get internationalization’s tools for products before promoting them online. It’s great news to know that by now we’ll be able probably to facilitate the access of more brands in sustainable way on chinese online sales market but it’s urgent to prepare SME making them operatives on right way to develop elements about management, production, communication, research and strategic planning that could match with new perspective of meeting chinese clients online.

Management: International vision is a must, cross cultural skills needed, awareness about chinese social networks and online scenario cause they represent parallel market.

Production: Tmall and Taobao are global markets inside national market with high performance of success for sales towards well framed targets (different regions, different cultures, different styles)

Communications: managing team that operates into online businesses are sometimes really different than usual ex so enterprises or usual main trading companies which we were familiar to do business with, timing of doing business online needs specific attention, tools used to communicate with chinese counterpart (stop email – ok instant massaging) must be well selected

Research and Strategic Planning: publicity, online communities, competitors and  investments for online presence,  (around 10% of annual investments for maintenance and develop of business from companies in China is for online publicity) needs dedicated team to sustain planned objectives.

If will be able to assist italian companies not only on getting sustainable entry for online platforms but also on providing for them specific skills and preparation to manage diversified tools that such scenario constantly involves, in addition with cross cultural  vision that I think will always represent “distinctive  plus” for people whom wanna doing business in China

 

Introducing new Centre for International Perspectives: focusing on heart of international scenario Milan Expo 2015

As advisor for companies that are really looking towards international dimension to relaunch their businesses I’m pretty familiar with the importance that such dynamics on operating as international player can represent for development and production of SME.

Then, if we’re talking about italian contingent situation, in particular if we consider the perspective that actually productive policies and central executive government and local administration are providing for the common good of our national economic players, I think that immediately you’ll agree with me about the high value’s content that it could be represented by introducing free and inter structured platform among sector-operators and professionals to boost international effects into national markets, always looking forward to provide cross-social education and training about the meaning of such involvement for well framed comparison managed on international scenario.

international perspectives

No lobbies or real-politic’s games. Just concrete needs to build up network of efficient players that will make on sharing tools, vision and cooperation to develop diversified projects that will concern the relaunch of sectors, territories and marketing strategies on international dimension: welcome to C.U.P.I – Centre for Union of International Perspectives.

Let’s check together the presentation of CUPI following some important aspects:

Ritaglio CUPI English

What is C.U.P.I.?

Working board aimed to operate with well framed dialogue about the topic of internationalization’s of economic subjects from specific territories. First of all structured with joint cooperation of associations, sector-workers, professionals, representatives of categories, common citizens associated by interest on valorizing high profile’s dynamics for that concerns perspectives of international promotion of their activity; everybody joins the board with deep awareness about the importance of sharing results and aims to make mutual perspectives more concrete and functional into sustainable development’s frame.

Which aims?

To guide the territory towards concrete proposals for the relaunch of working opportunities, education and research’s development for an high value’s  emancipation about international dialogue, reinforced by exchange experiences and professional comparisons collected in co-working atmosphere with well framed social cooperation’s activities. These operations will be also useful to create common consideration about the topic of international dynamics and international events that could bring more opportunities for the benefit of territory and players.

Which tools?

Board for operative dialogue about concrete projects of main importance under economic and institutional aspects (like EXPO 2015 and following editions, international fairs and seminars, EU funds and sustainable development’s opportunities for european SME, business tours and business missions, academical researches, feasibility studies applied to operative strategie for market entry’s dynamics)

Shared tools panel structured among supporters and members of C.U.P.I. with agreement to make more easy and sustainable the access to services form common goals and perspectives. comune.

Analysis and research activities to boost training opportunities and educational platform for social aims. Such activity represents concrete base to improve social participation and civil involvement into international dynamics

 Where does it operate?

C.U.P.I. represents a long time highly “felt” and discussed project. As working board among professionals and organizations, it takes place in Milan and it embraces operators almost from the area Padano – Veneta, but it is already collecting energies and proposals from foreign partners and associations. In particular the Association that I manage as President and Director, Asian Studies Group well represents the cross cultural “soul” which we want to approach for example operators from East Asia – In tight connection we have already introduced the activity of EU Networking Centre in Japan from Kobe, and some consulting companies that operates on internationalization’s of SME on foreign markets, both EU and not EU markets. In particular in Bologna we are already working hard with Internazionalizza S.r.l. for that concerns some companies in that area and they are approaching Japan, China and Korea,  and recently we’ve started to collect some contributions and proposals from GN Lex – legal firm with hq in Milan and operative branch in Shanghai. In Milan we well know the activity of CMEX China Milan Equity Exchange and Carone and Partners Legal firm which we’re used to consult frequently for some issues in behalf of our C.U.P.I.’s members. Recently we’re also cooperating with AITA – International Association for development of Advanced Technologies with hq in Rome with recent branch in Milan to assist some projects during Milan EXPO 2015.

In particular,  concrete board for cooperation in behalf of key local sectors during Milan EXPO 2015 is one of our first high working points which we’ve introduced recently the activity of our group. ‘Cause in Milan operators, associations, professionals and companies are already working towards right and effective mood for the international event, we think that some borders- area like Province of Lodi, Province of Pavia and Brescia, Bergamo, Monza etc (and I’m not talking about local administration as politic entities..) should create more intense network of projects to boost the opportunity the Expo will bring us towards their local operators and territories. That’s why, for example, recently we’ve presented to Lodi Export (consortium for development of  exporting opportunities for province or Lodi’s area) the proposal to join our discussion-group to focus on common aims for mutual benefit that international perspectives could bring to this area.

contact C.U.P.I.

for more info about our activity and our group please leave your comment / question at the contact form as follows

Business Culture in China: facing with new business model to approach opportunities with concrete tools

During last training that I managed for companies and managers I put on focus this fundamental: talking about China needs to consider this country as well framed system and well built structure that really can be introduced  as new business model for economic operators.

Recently I got opportunity to introduce macro economic elements, marketing strategy’s fundamentals, and geo-political issues about China during course issued in behalf of “Quadrifor” (special fund centered on didactic programs for managers)  to 11 italian managers involved into diversified business missions on chinese markets; the first consideration that came to light is about the perception which most of companies (not only SME but multinationals as well) are used to have for internationalization of their businesses: re-locating on new market is almost considered doing export. Obviously on this way it’s really difficult to understand why it’s important to recognize into “Chinese System” elements that need holistic vision and deep awareness of its features to get approached correctly.

First of all, also on doing export, we need to consider that nowadays as chinese market we’re talking about several different “chinas”: some areas are getting more familiar with financial sector’s liberalization (Shanghai and Beijing for ex) and others are receiving benefits from “go west” policy facing with sustainment for development of infrastructures and key – sectors (Chongqing). We well know that we cannot also introduce national logistic net of services for our business in China and entry strategy must be fixed with local analysis, social involvement on expenditures that is different according with contingent local situations and sub cultures.

The new middle class as representation of urban revolution just now is going to express specific identity through expenditures and consumptions and some disastrous operations got in the past well clarified how we cannot consider easily urban population like mature middle class about way of approaching towards consumptions and goods.

The VAT pilot reform is direct expression of system that wants to be balanced and boosted by market and dynamics about development of political reforms could be understood more with vision of market’s socialism than communist rhetoric. Also the last third session of plenum of communist party specified how the next step for glorious health of chinese nation will be represented by circular movement towards urban revolution: where Mao started with countryside’s revolution, Xi Jinping will end it  closing the circle with revolution that will involve countryside with urban development. Same class, same perspective, same salary, same conditions of being free with access to expenditures and consumptions. Giving back the land to the party the farmers will receive  reimbursement to allow them to start new life in urban societies (the plenum recognized how it’ll be crucial point to reassure farmers with high amount for the land they will give back to the system) and soon the abrogation of “one child only law” will represent a new beginning with stimulus towards high population’s society with more needs but also with more power and efforts on building up strong system and consumptions.

The education of new generation on respect for tradition, common values, national stability and central power will confirm the prosecution of glorious chinese nation on boosting features that will characterize chinese model as major power nation on international economic scenario.

So, after 16 hours of intensive training about such perspective that is involving quickly chinese system, when I asked to some professionals joined my course, what do they recognize as new perception about China, some of them replied as follows

Marco Migliorini , Marketing Manager: as half italian – swedish I’m really sensitive to cross cultural elements and pretty curious about their influence on business dynamics and negotiation’s steps; that’s why I found this training very useful ‘cause it introduced technical matters and contents using cultural lens to explain features and tricky point of system that beyond business fundamentals consist of people

Marina Masci,  Advisor: I confirmed my attendance to this program ‘cause it’s really important today focusing on concrete tools to understand better one of most important markets for contemporary economy; usually the common opinion look at China with “fear and suspect”, I think that’s usually it’ is cause we don’t have concrete vision to approach their culture and market. I found this opportunity of study and confrontation as useful and well structured and I’m sure now I’ll be able to face with China with better awareness.

Davide V., Export Manager: I’m thinking about professional relocation in China cause my company is dealing with this market and they needs my presence there. I think this course represented a concrete opportunity to understand more about chinese culture and society; in particular I think that we need to consider cross cultural and social aspects as fundamental key factors to approach chinese system on conscious way.

For me it was hard 2 days no stop teaching experience which I knew a lot about professionals who, even if with different projects and in different steps of their internationalization’s perspective, are getting involved with passion, respect and patience into chinese system. i’m pretty sure for them it’s gonna start a very crucial and important step in their professional life.. I wish to everybody all the best and good business in China! see you there!

managers verona

 

Shanghai nomination approved: soon new free trade zone – building up new china

I think that is part of modern chinese DNA  to get everyday more addicted to new 改革 (gaige means reform). That’s because is important to show to chinese population and to investors from all the world that China can always go ahead into something of new without changing that we could define as social harmony (one of most important fundamentals of confucianism as for communism party and keeping business environment as one of most interesting to develop new ventures.

And in particular each gaige could be more interesting if driven with the same perspective that was used by Deng Xiao Ping in ’78 when he started the glorious 改革开放 – So the news about Shanghai City’s will to introduce Free Trade Zone in  municipal area completely match with chinese ambition to drive new area where chinese system can realize his awarness of being real business model and place of opportunities for trading and investments  of the same importance like New York or Hong Kong –

Yes, because HK even if is part of Chinese Nation still today represents concretely the perspective of “1 country 2 systems” that has been considered as fundamental to manage the re-entry of HK under chinese political asset and it still maintains one of most profitable condition of Free Trade Environment for goods and direct investments.

China MarketsFrom 2008 when Beijing has been protagonist of Olimpic Games, Shanghai has been indicated as new center of the world for economic attraction in particular when SH was choosen as host – city for one of most important EXPO’s editions in the history in 2010. I well remember the perception about being the top of the world when i was working in SH in 2006 – 2007 and then in 2009 – It was like the beginning of new era. But at the same time i remember that even if companies were investing in SH registering their representative office first (then officially with new wofes in particular from 2010 when regulamentation changed in behalf of wofes) HK represented always the best place to invest capital gains and where drive good IDEs and high profit’s financial ventures. Why? Chinese money are chinese.. investors said.. money in HK are our money. They probably were refering about easy access to investiments using fully convertible RMB…

Well according with recent news Shanghai’s request about start of procedure to become FTZ for investments and goods has been approved by State of Council (in particular the issue has been boosted after visit of premier Li Keqiang in the previous days at Pudong district) and it’ll represent an hypothetic step of testing how other municipal zones could in the future get the same condition boosting their operative assets of investment also in behalf. of businesses built in other regions in mainland. SH will start to compete with HK on this issue and the big internal market and the well framed facilities system already improved for Expo will make for sure the difference and it’ll be really important comparing with HK. We should also to remind that SH got more productive and industrial zones (Ningbo area and others) comparing with Hong Kong but for sure the general tax conditions in HK still represent a very good appeal for investors.

I’m sure that this condition will start new era for chinese investments environment and again it’ll show to the “old continent” how we have to work hard on promote good network and common system also for attraction of IDE in particular towards that fields that we would be proud of holding primacy.

Marketing Strategy on east Asia – contents of marketing course for Master in Internationalization of SME – NIBI new institute for international business Milano

It started as professional collaboration 3 years ago and now it’s becoming an interesting opportunity for me to introduce specific contents about doing business in China and Japan, in particular focusing on marketing strategy’s tips for companies according with personal professional experience as advisor for such commercial dynamics.

For the next session that will start soon, I’m going to teach in Milan on 5 of October 2013 and I’ll provide to my students concrete tools to approach chinese market considering elements as follows

– now china represents a real business model that consist of specific and distinctive features (about target, IDE, regulamentations for specific fields, VAT , company lawa etc)  that must be considered on planning strategy (as model it means that way of doing business and promotion need particular attention on specific steps and as part of internationalization’s process)

– target’s control: we’re really sure to know well chinese market? we should remember that when we talk about china we’re approaching an highly framed market and also when we refear to “rich chinese as potential customers” we have to take care about several levels of richness (middle class, upper middle class, rich people etc)

– regional marketing in China needs probably the most demanding attention than any other market, that’s  first of all beacause it’s a very big country, then cause we’re approaching a multi ethnic – country and doing business locally needs local connections and specific awarness about elements that marks operators (suppliers) but also trading companies or final customers.

– during this lesson I’ll also specify some new elements that represent big change for China about e-commerce policies and doing business on the web

– then we’ll focus our attention on some cases and we’ll introduce some basic info about negotiation’s steps.

‘cause I’ve expertise about chinese language I’m used to introduce the above contents using some key-words in chinese and I’ll try to channel attention of students about specific Hanzi that will express the meanings i’m going to focus on –

If you wanna know more about NIBI’s faculty and didactic programmes check the link as follows. I’m proud to remind you that Asian Studies Group, the studies centre which I’ve founded is official partner of the Institute as Consulate of Republic of Korea in Milan and Confucius Institute.

 

 

http://www.nibi-milano.it/Corsi_internazionalizzazione_impresa/Corsi_impresa/Far_East.kl

You have smart ideas for business? Make them reality! The opportunity comes from Hong Kong

I’m not a dreamer you know. As business developer the first thing I’m used to take care is the feasibility of our entrepreneurship.  Sometimes I have to face with great concepts that cannot reach expected results as fixed on business plan, cause they’re lacking of co-investiments or connections to improve business appeal of the project.

It’s not just a problem with marketing strategy or general management (of course they must run well from the beginning of the venture), sometimes it’s because it’s not easy to approach the right network of experts, of operators and right developers that could play the difference for us.

For young people one of most difficult step is represented by introduction of own business – idea among personalities  who count for the field we’re going to invest.

Institutions seem also pretty far away than being present on supporting step by step our investiment (little or big whatever it’s gonna be) and usually we’ll finish to consider our “smart idea” like an illusion, and at the same time “doing business” will appear  really inconsistent or unreachable by common people.

So, that’s why i consider the project called “Start Me Up” introduced recently by Invest in Hong Kong as real opportunity for whom want to present smart projects still never actualized and get them on good selection (sometimes professional suggestions can help us on understanding the right way to direct our energies before being mistaken)

The proposal promoted by specialized office for foreign investments of Hong Kong Special Administrative Region consist of selection of 12 projects concerning innovative business solutions applied in HK or in other countries as introductory step of business (so they will also accept candidates with some ventures already ongoing but it’s important being at initial steps and not into high profits already).

The programme will check the details of each project considering the concept, the prototype (if necessary), then the early revenue and the breakeven and profit phases. It’s interesting cause the commission will not judge following common business criteria according with usual well detailed business plan, but they will also consider other important elements as basic fundamentals of planning a good venture as follows

Immagine

Finalists that are not based in Hong Kong will be provided with economy class travel (direct return flights to Hong Kong) and five nights’ accommodation. The also will pitch to potential business partners and investors in Hong Kong at the StartmeupHK Venture Forum on 5 December and a series of partnership matching sessions.

The Hong Kong Trade Development Council will provide a business matching service to Finalists who are looking for business partners e.g. product/service suppliers, manufacturers, agents/distributors, buyers, licensees/franchisees. For finalists in the ICT sector, Cyberport will provide a one-year basic service subscription to the Cyberport Collaboration Centre, which provides business support and facilitates partnerships and technology and talent transfer. The Hong Kong Productivity Council will offer technical consultancy advice.

Our Chamber of Commerce in Italy, following dispositions issude by regional institutions, often provide some funds or opportunity to oin some development’s programmes (even if usually we face only with vouchers for reimbursement for international exhibition), but as I’ve already said lot of times, i think that Ideas and Energies need specific knowledges to grow up on the right way and these contents and concrete orientation must be offered into projects that can place side by side experts and supporting staff with entrepreneurs and investors.

Start Me Up HK well represents congruent exemple of professional support for doing business and it reminds perfectly that who invest (time, money, dreams and energies) is precious resource for community…

So let’s stop thinking that being internationals means only to join to international exhibitions… such mentality will not guide into concrete environment that will be useful to make our ideas real business (really connected with professional network that counts)

For details please check the official link as follows

http://www.startmeup.hk/