August 7th, 2017; Which 50
Building a brand in China is all about establishing trust with consumers.
That’s according to Claire Pallot, general manager of multi-channel for Sigma Pharmaceuticals, who is responsible for the online strategy, and end to end eCommerce operations of Sigma’s retail brands, Amcal and Guardian Pharmacies.
Amcal launched a Chinese ecommerce website over a year ago. It decided to enter the Chinese market after noticing an increase in demand from the Chinese middle class for high quality, ethically-sourced products from Australia. In the first six months of operations, sales exceeded Amcal’s business case expectations by more than 200 per cent.
Even with the early sales bump, Pallot says the company’s China strategy is about building the brand in China over the longer term.
“We recognised if the driver was the Chinese middle class it probably wasn’t a bubble. We thought it had a longer term benefit and would be around for a while,” Pallot told Which-50.
“We started really looking at the channels which they were using and it became really clear that mobile is so huge in China and cross border shopping was increasingly popular. So we looked at how could we enter through that space rather than opening physical stores,” Pallot said.
Amcal explored opening a storefront on marketplaces like Tmall and JD but restrictions around the number of products they could sell and concerns over margins meant the retailer couldn’t “work out a commercial model that made sense for us.”
The pharmacy settled on partnering with an ecommerce solutions provider called Azoya to build a its ecommerce store. Building a standalone site, rather than selling on marketplace, also helps Amcal to establish its brand in China, Pallot said.
“Because we took a longer term strategy we wanted to really build the brand and build the Chinese trust in our brand,” she said.
“We wanted to offer a product and service delivery that was the same as what we were offering in Australia. By having a standalone site we have a full customer service operation, we could manage the entire end-to-end supply chain, and offer them our full range.”
The prevalence of counterfeit goods for sale in China makes trust a top concern for Chinese consumers. Amcal’s Australian ecommerce site links directly to its Chinese website, and vice versa, so Chinese consumers can be sure they are shopping to ensure they are buying from a trusted source.
Digital marketing strategy
Last year Amcal hosted a delegation of Key Online Influencers (known as KOLs), who toured Amcal’s pharmacies, warehouses and met with key suppliers in an effort to further establish brand credibility.
“The KOLs build their influence by providing their audiences back home with really useful and validated information and content so that was another way that we as new entrants in the chinese market tried to build that level of trust and build the bridge to the brand from Australia into the Chinese market,” Pallot said.
As well as utilising online influencers, Amcal’s digital marketing includes a presence on Baidu, Weibo and WeChat.
Payment platforms such as UnionPay, AliPay and WeChat Pay are another promotional platform for the pharmacy and which is also experimenting with live streaming.
After 12 months learning the Chinese market, Pallot says her team now plans to leverage its marketing and ecommerce background to move away from promotions based on price and free shipping to promotional strategy such as curating baby products that Australian mums love.