How a Glasgow company is helping firms break into the Chinese e-commerce market

China has always been a tough nut to crack for online retailers. The casualties have included the biggest names of all, including Amazon, which recently scaled down its presence in the world’s largest e-commerce market.
Chinese consumers prefer to pay with mobile payments. Picture: PAChinese consumers prefer to pay with mobile payments. Picture: PA
Chinese consumers prefer to pay with mobile payments. Picture: PA

China, which accounts for more than 42 per cent of global e-commerce, is a larger e-market place than the next four largest markets (United States, UK, Germany and Japan) combined.

But where global tech giants have feared to tread, Unineed – a fashion and beauty retailer based in Glasgow – has made tremendous strides, building a multi-million e-commerce business with the vast majority of its sales in mainland China.

The company, founded by Chinese national Lowell Wang, who came to Glasgow to study for a masters degree in international marketing, is now packaging up its successful recipe – and offering end-to-end e-commerce support to help other firms who want to crack the challenging Chinese market.

The recipe for success is a complex one, focused on understanding the highly specific nature and expectations of the Chinese market – and how to navigate the tricky business-to-consumer (B2C) relationship.

As Lowell puts it: “There is a lack of understanding that the Chinese e-commerce market is just so, so different. If you want to do e-commerce in the United States, you have a common language, similar culture and the same kind of understanding of what brands and products are all about. They search for products in a similar way, whereas China is much more about affiliate marketing and key influencers. There is some search-engine generated sales, but it is much more led by influencers; the focus is very different. Also, the way in which people buy in China is very different, such as through social media sites and apps and largely on mobile phones.

“It’s much more synchronised and there is a tighter relationship between online and in-store purchases. One of the barriers is also a degree of Western arrogance. Certain brands might be very familiar to us but totally unknown in China.”

Cultural differences

These significant cultural and commercial differences demand a sophisticated approach, Wang explains: “It’s not just about translating a website into Chinese, it’s about translating a culture. Chinese web development is very different and the marketing challenge is very different. The Unineed beauty and fashion business is a test case for everything we do for other businesses.”

At the heart of the Unineed Group e-commerce package is web development and localisation, which is crucial to make any inroads into the Chinese market. Typically, more than 50 per cent of mobile users in China will abandon a website which takes more than three seconds to load, while non-optimised UK-hosted websites are likely to have load times of 30-40 seconds.

Unineed promises to use a range of technical strategies to overcome such damaging delays and get around what is often called ‘The Great Firewall of China’ – alongside expert knowledge of local nuances in content creation, customer service, payment methods, market trends, product preferences, trends and brand positioning. This is the cultural translation Wang talks about: “Your website for China might look quite different; we take the best of a brand and what will translate into the Chinese market, but also change what needs to be changed to make it appeal to buyers in China.”

The majority of Chinese consumers do not own a credit or debit card, preferring to pay using mobile platforms such as WeChat Pay or Alipay [part of the giant Alibaba platform]. “The size of the Chinese market is the real opportunity,” says Wang. “There is enormous potential for Scottish companies to take advantage. Chinese consumers are crying out for western products, particularly those with a reputation for quality. We want to help Scottish companies leverage this opportunity in China, and e-commerce provides the perfect solution.”

In the European e-commerce market, around one-third of sellers are based in China – but there are virtually no European sellers doing e-business in China. “Even if all UK retailers sold in China, it would barely make a dent,” says Wang.

Unineed hopes to shift that balance and has taken a significant step forward by becoming the first company in the UK to negotiate a deal with a Chinese e-commerce-bonded warehouse, in a project established by the Chinese government. “They deal with the whole B2C package, logistics, warehousing and fulfilment,” says Wang. “It brings the cost of delivery down significantly and reduces warehousing costs.

“It’s better for companies like us, it allows the Chinese government to control the cross-border tariffs, and it opens up consumer choice. Again, Unineed is a pioneer for other businesses.”

The business objective for the Unineed Group is simple – to bring in as many retailers and sellers as possible and to give them access to the Chinese market. “I want Unineed to do well but I also want to see more Scottish, British and European companies selling into the Chinese market,” says Wang. “We are building an e-commerce marketplace called Westyll, designed specifically for UK and European retailers looking to sell into China.”

Wang says he is trying to put something back through Unineed, especially with its zero upfront cost pricing structure. He explains: “I have a great affinity to Scotland. The people and the business community have been incredibly good to me, and I credit Scotland with much of Unineed’s success. As a result, I wanted to find a way to support Scottish businesses in getting into China. This is how we came up with the ‘zero-cost’ structure. We are so confident in the quality and demand for Scotland’s produce and in our own ability, that we don’t charge any upfront fee to give companies access to our services.”