• Transform magazine
  • October 21, 2018

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Ogilvy China’s report helps China brands top e-commerce market

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Being at the top of the e-commerce market is a goal every China brand is after with estimations counting a total of 10m online stores that are expected to sell over 1bn products with a transaction value of more than $1tn this year. When comparing prices and shops is a click away, standing out among thousands of brands is the only way to sustain a healthy company over time.

Marketing communications company Ogilvy China has released a new report, ‘Why Brands Matter on Chinese E-commerce,’ on the ways brands can succeed in the Chinese e-commerce industry. The report’s results came from China’s e-commerce platform and provide advice, tools and strategies to help corporate organisations with online consumer engagement.

Being at the top of the Ecommerce market is a goal every China brand is after with estimations counting a total of 10 million online stores that are expected to sell over 1 billion products with a transaction value of more than 1 trillion dollars this year. When comparing prices and shops is a click away, standing out among thousands of brands is the only way to sustain a healthy company over time.

Chris Reitermann, CEO of Ogilvy China and co-CEO of Ogilvy Asia Pacific says, “We want to enable brands to build a sustainable advantage that can deliver meaningful value for the long term. The fast changing e-commerce environment tends to make brands more focused on the short-term sales growth rather than brand building for the long term. With brands spending more and more on e-commerce platforms and generating a large percentage of total sales through e-commerce, it is essential for brands to be able to navigate this environment. Brands in China are increasingly built bottom up, and social and commerce driven campaigns need to ladder up.”

The report divides customers into groups based on their shopping behaviour and preferences, suggesting strategies to both attract and maintain them, a demanding task in a notoriously inconsistent market where customer engagement is becoming increasingly difficult.

Mike Zhu, head of e-commerce & analytics at Ogilvy Shanghai, co-author of the white paper, says, “The operating dynamics of Chinese e-commerce are unique and evolving, but not a complete mystery. We believe that the key to success is a holistic approach providing comprehensive customer experience across all channels, looking beyond conventional e-commerce practice to respond to changing consumer needs.”

The paper also highlights commonly made mistakes in e-commerce marketing strategy, such as the frequent use of big discounts by fast-moving consumer goods brands. Big reductions in prices don’t promote the goal the most prestigious online brands have, which is focusing not only on growing the profit rates, but also the lowest value to be gathered from the e-commerce market.

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