by Azoya Consulting
On last year’s Singles Day, Australian discount pharmacy Chemist Warehouse became the first retailer on Tmall Global to surpass 100 million RMB in transactions, drawing attention from industry insiders and prompting rumors that the company may even go public.
Other top sellers like Swisse and Move Free have consistently topped the rankings year after year. What’s their secret?
We take a look at what’s going on and give some practical tips for newcomers to the China market.
Swisse’s localized approach in China relies heavily on KOL and celebrity marketing
Both Chemist Warehouse and Australian supplements brand Swisse were amongst the top ten sellers on Singles Day last year.
Swisse is unique in that it is an Australian brand that had been purchased by Hong Kong-based Health & Happiness International, a company that also runs and operates the popular milk powder brand Biostime.
This has helped Swisse developed a localized approach in China, having expanded to multiple e-commerce platforms, including Tmall Global, JD Worldwide, and Netease Kaola, and offline retail stores such as Watsons pharmacies and Ole supermarkets. In the first nine months of this year, revenues for Swisse’s adult nutrition and care products division rose 40.8% YoY to reach US$180.63mn.
Part of Swisse’s localized strategy has been using celebrities and KOLs to market its products, having hired Nicole Kidman and Fan Bingbing as brand ambassadors in the past. This year, Swisse is using younger influencers to market to a younger customer base. Swisse’s front page on Tmall Global is littered with pictures and videos of 26-year old pop singer Zhu Zhengyan and KOLs Lin Xiaozhai and Kakakoo.
Different KOL videos are launched every day on Swisse’s Tmall store
KOL marketing is especially important for the health & nutrition space as the products can be more complex and hard to understand. It takes time to educate customers about brands, especially with the number of fraud cases that have occurred in the past. KOLs can help speed up the process as they’ve already developed a sense of trust with their fans.
Chemist Warehouse offers a wide and deep assortment of goods at ultra-low prices in China
Chemist Warehouse was the first retailer to reach over 100mn RMB in sales on last year’s Singles Day. Like Swisse, Chemist Warehouse used KOL marketing to drive traffic, hiring between 20-30 livestreaming KOLs to introduce its products on Tmall Global and other Alibaba-affiliated platforms such as Youku.
Another key to success has been its ability to provide a wide range of different categories and brands at extremely low prices, sometimes as much as 40% lower than those of supermarkets in Australia. Some say that Chemist Warehouse is the Costco of pharmacy chains in Australia, as its large network of 300 pharmacies gives it bargaining power to procure inventory in bulk and pass the savings on to its customers.
Chemist Warehouse offers all sorts of mom & baby, health supplements, personal care, and cosmetics products. Becoming a one-stop shop for all of these products drives traffic and has established Chemist Warehouse to be the go-to retailer of choice for those looking to purchase quality Australian goods.
With all this in mind, let’s take a look at how Chemist Warehouse is preparing for Singles Day this year.
Four items on sale (every day at 10am & 10pm, Nov 1-11)
Raffle to win 10 RMB, 200 RMB, 400 RMB or iPhone XS (Nov 1-10)
20 iPhone XS models raffle giveaway for those who spend over 400 RMB within first hour of Singles Day
Spend 400 RMB, get 400 RMB Off (Nov 11, 12-12:30am)
Spend 400 RMB, get 200 RMB Off (Nov 11, 12:30-1am)
Cool Down & Other Deals:
Select pre-sales for the rest of Singles Day
Spend 888 RMB, get free perfume (Nov 11)
For every 400 RMB spent, get 50 RMB off (Nov 11)
Chemist Warehouse’s approach is well-planned. For its warm-up promotions, it rotates different product sales and offers raffles to build traffic leading up to the final day. On the final day, Chemist Warehouse offers its steepest discounts during the first hour as consumers are likely to spend the bulk of their budgets in that time period.
Some Key Tips
1. Combining Singles Day promotions with KOLs & livestreaming can be a quick way to encourage impulse purchases because KOLs have already built trust with their fan base.
2. Retailers should stock enough inventory so that they don’t run out. Stocking inventory in Hong Kong warehouses or free trade zones can speed up the fulfillment process. The entire logistics industry in China will be backed up because of Singles Day, so shipping on time is important. Remember that Singles Day is just the beginning of the holiday season, so leftover inventory can be used for sales on Black Friday, Double Twelve, Christmas, and even New Years.
3. Getting customers excited about the biggest promotions is difficult. Many retailers keep waiting customers entertained with interactive games and raffles and giveaways. Others hold pre-sales in which customers place a deposit for items well before the final day comes. It’s also common for smaller brands and retailers to plan their promotions in the days before Singles Day, because the traffic acquisition costs are slightly cheaper.
4. The competition is intensifying on marketplaces. There are already over 19,000 brands on Tmall Global, so it’s easy for a brand to get lost in the mix. What’s more is large marketplaces such as Netease Kaola and Tmall Global are heavily marketing their own direct import stores with large banners and big discounts on their front pages. Third-party sellers should be wise not to place all of their chips on the same top-selling SKUs that marketplaces’ own stores sell because they likely cannot provide the same low prices, nor can they ship products as fast, since direct import stores tend to stock goods in Chinese free trade zones.It may be more beneficial to sell lesser-known brands or sell on other niche platforms such as Pharmacy Online and Pharmacy 4 Less.
“在中国双十一销售额过亿，澳洲保健品巨头Chemist Warehouse计划上市？” 8 Dec 2018. Sohu. 5 Nov 2018 <https://www.sohu.com/a/209241241_509974>
 “Strong Australia and China sales propel Q3 revenue growth for Swisse.” 5 Nov 2018. Nutraingredients-Asia. 5 Nov 2018 <https://www.nutraingredients-asia.com/Article/2018/11/05/Strong-Australia-and-China-sales-propel-Q3-revenue-growth-for-Swisse>
 “Chemist Warehouse Extends Exclusive Agreement with Tmall Global.” 15 Sept 2017. Alizila. 6 Nov 2018 < https://www.alizila.com/chemist-warehouse-exclusive-agreement-tmall-global/>