Breaking into the Chinese eCommerce business is a high-risk, high-reward bet for foreign companies. Today, Florian Legendre, Director of Operations at BysoftChina, is going to tell us about how to be successful in such an appealing but challenging market.
Hi Florian! How did you happen to work in China and how do you like it?
In 2005, I landed in Beijing for a six-month internship and I never came back home. After three years at IBM, I was hired to work for Bysoft as Director of Operations and here we are! Six years in China, from Beijing to Guangzhou, and now Shanghai. Living and working here is very exciting as the country’s economy – and the Internet sector in particular – is rocketing, offering amazing business opportunities.
Can you tell us about BysoftChina?
BysoftChina was established in 2003, as a subsidiary of Bysoft International Group, a French expert in telecommunications applications, which naturally became a Web engineering company with the development of the Internet in the early years 2000.
From being a center of competences in web development and project management, and as a pioneer in professional Open Source web development in China, we evolved in 2007 as a complete service provider, letting our local and international customers benefit from our expertise in eCommerce.
How do you perceive the eCommerce market in China?
Counting till June 2011, there are more than 23,000 eCommerce websites in China, representing a growth of more than 20% compared to January 2011. Total visitors on eCommerce websites counted almost 400 millions, representing a growth of 6.89% compared to January 2011. The market is simply booming!
As a web agency, what do you need from eCommerce solution providers to make your clients successful and allow them to satisfy their own customers?
First, we absolutely need to have a back-end and a front-end translated in Chinese.
Second, the solution must be optimised to meet local end-consumer needs: for instance, it is necessary to offer integration with Chinese payment gateways and supply chain companies and the opportunity for the end-user to deal with a specific kind of receipt called FaPiao.
Last but not least, SaaS solutions need servers located in China to prevent issues related to the Great Firewall.
Have you found a solution meeting those criteria?
The eCommerce solution we are currently using is Magento for its performance and numerous functionalities. As we are official partners, we have customized the solution to offer our clients exactly what they need, according to the constraints I just mentioned (above).
However, we would be delighted to work with new solution providers too, and enlarge the range of services we can offer to our clients.
What are the main challenges for a foreign company willing to break into the Chinese market to sell products online?
In China, Tao Bao is the absolute reference in terms of eCommerce: when a Chinese shopper is looking for a product, he or she directly goes to Tao Bao to make the search. Consequently, Tao Bao is the main source of competition for anyone willing to do business online in China, especially for foreign companies.
If they cannot align their prices to those displayed on Tao Bao, it will be very complicated for them to succeed, because the culture of discount is very strong in China. People love great deals and power sellers know it.
Consequently, many companies use Tao Bao as another distribution channel, in combination with their corporate website.
Is there a common mistake that foreign companies tend to make when they come to China?
The Chinese market is so huge that it can appear to be an Eldorado, where you just need to show your products on a website to make millions. Although it is true that there is a huge potential in China, you have to take into consideration the fact that competition is very strong too.
I have seen entrepreneurs coming to China with the idea of importing high quality food from France: that is a good idea and there is demand for this. However, they did not have planned any marketing budget to promote their product and logically, they failed.
Spreading a message out to consumers is a daily challenge in China. For instance, Baidu’s search algorithm has been fairly improved in the last couple of years, but it still displays commercial links among natural results, without letting the visitor know: if you do not advertise, you do not appear, period.
Do you have an example of a company that successfully made it in the Chinese eCommerce industry?
After more than 10 years of implementation in China (with almost 5,000 stores), Etam needed to rebuild its eCommerce website according to the specificities of the Chinese markets. The project was urgent and in only 3 months by sending our development team on customer site, BysoftChina deployed a first release of Etam China Website.
The strong time constraint did not impact the quality of the project: Etam China keeps on trusting us through new evolutions.
The last word?
Finding the right partners is the key of the success of your eCommerce projects in China.
Thank you very much for sharing your insightful experience with us Florian. Hope to meet you again soon in Asia and by then, best of luck to Bysoft.
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