SILK Road to China - Architecting a Cross-Border Strategy

September 8, 2015

By: Featured Author,
Author Title: 
Patrick Do, Project Manager
, SILK Software

For online retailers seeking to expand their eCommerce business into other markets, look no further than the world’s fastest growing eCommerce market-China. A new report by Forrester Research indicates that China’s online retail market will reach one trillion dollars in total sales by 2019. Retailers looking to get a piece of this pie must first take the proper steps to ensure their cross-border endeavors are successful. By leveraging the flexible and scalable Magento platform, SILK Software has architected a cross-border strategy that will allow you to sell overseas in no time.

Optimize Existing Website

The first step to entering the Chinese marketplace is to start by localizing your existing US website. At minimum, these changes will allow you to introduce your brand and products to the Chinese market, collect payments via US credit cards and utilize US logistics companies for cross-border fulfillment. The goal is to make your website friendly to Chinese consumers without any major design or functionality overhauls, while maintaining your operations in the US.

Leveraging the multi-language capabilities of Magento will allow online shoppers to understand and navigate your website to easily locate products and make purchases. While your website’s content will not initially have to be completely translated to Chinese, the most important parts should be in the local language.

In addition to localizing your website’s language, product prices on your website must be viewable in the local currency. With Magento, your shoppers can conveniently switch currency views on your website and the platform automatically provides currency conversion rates for your web store administrators.

Mobile in China is dominant and developing your website’s mobile strategy is vital. With the vast majority of Chinese consumers being mobile users, this market demands an online shopping experience that is tailored to mobile devices. Magento’s responsive framework allows retailers to quickly meet this demand.

Once these enhancements to your US site are in place, you will need to look into working with a logistics company such as WIN.IT who specializes in cross-border logistics. WIN.IT assists with all aspects of shipment including customs and duties. Leveraging their existing service, SILK can help develop a solution that ensures delivery of products in 7 days!

These simple changes give your website more credibility in the Chinese marketplace and indicate to consumers that your products are meant to be purchased by them.

Moving Operations to China

After your US site is optimized for the Chinese market and you’ve gathered some experience serving Chinese customers, you may want to consider expanding operations in country. Setting up shop in a foreign country can be a daunting task, from finding a hosting company, to finding the right office space and warehouse. Fortunately, Magento’s flexibility gives you the power to manage different store views for multiple countries under one Magento instance significantly easing site management.

Another factor to consider after making the move to China is payment methods. For eCommerce businesses looking to achieve success in China, you must be certain you’re able to accept the preferred method of payment. Some of the most popular payment companies include: Ali Pay, China Union Pay, TenPay and WeChat.

Once your site is able to accept local payment methods you will need to be sure you’re also providing your customers the best rates on shipping. Some of the most popular logistic companies include: SF Express, STO Express, YTO Express, China Post & ZJS Express.

Magento’s extensibility to adapt to ever changing environments enables it to be easily integrated with local payment gateways and shipping carriers. SILK has extensive experience integrating the platform with these local solutions.

After your successful entry into the Chinese market, you may find the need for further assistance in focusing on your particular core competency. Fortunately, the Chinese economy is flooded with businesses and resources that are very vertically focused. For example, a business that may need assistance with fulfillment and shipping can hire an outside agency specializing solely in this.

Marketplaces

After your site has been properly configured for the Chinese consumer, you’re ready for traffic. But where is it going to come from? Unlike the US, where a site’s online marketing and advertising initiatives drive traffic, eCommerce sites in China must engage the 2 major marketplaces for exposuretmall.com and jd.com which hold a 57 percent and 21 percent share of the B2C market respectively. Similar to an eBay, these marketplaces have nearly monopolized the Chinese eCommerce playing field and any business looking to gain traction in China must be sure to set up shop here.

Selling on these unique channels couldn’t be easier with Magento. The platform can be used as the hub for product information, make your updates here, and project them to all your channels. All orders also flow through Magento, again making it your one stop shop for managing all your online channels.

This carefully crafted strategy is designed to quickly bring your site to the Chinese market and then further optimize your operations for continued growth once you have gained traction there. The flexibility of the Magento platform will allow you to get your foot into the Chinese marketplace, but more importantly, the scalability and extensibility of Magento can firmly plant you there. The demand in China is there, let Magento and SILK Software help you become the supply!

About the Author

Patrick Do currently works for Magento Gold Solution Partner SILK Software. Along with his degree in journalism Patrick brings over 5 years of eCommerce experience to SILK, ranging from online marketing and advertising to content creation to managing site development and support. In his current role as an eCommerce consultant, Patrick works with clients on a day-to-day basis to identify and recommend best practice solutions to everyday eCommerce issues. When he is not helping his clients grow their bottom-line, Patrick enjoys playing basketball and spending time with his family and friends.