8 Tips for Foreigners to Sell on Taobao
Source: Forbes
Starting an adventure into the e-commerce world, is a big step for any individual or start-up company, especially in China. Similar to the traditional retail stores, Taobao is a "dog eat dog" world, where it can be difficult to survive, if you're not prepared.
To aid you in your adventure, here is a list of 9 tips for success when selling on Taobao!
Bring Something New to the Party
In the early days of Taobao, thousands of online vendors found success simply by taking everyday products from China’s shops and making them widely available online. Nowadays Taobao Marketplace hosts listings for more than 800 million products. To stand out, it helps to have something unique to sell.
Richard and Francis Law recently launched their first Taobao store, jinfeibao.taobao.com, after spending more than 18 months developing a personal air filtration device worn in the nostrils so it can’t be seen—an alternative to the ugly facemasks that help Chinese cope with the country’s severe air pollution. “I don’t think you need a breakthrough idea,” says Richard (who is unrelated to Francis), “but you need some kind of competitive advantage. That’s why we spent the better part of two years developing our product. You have to have patience and perseverance.”
Hire Great Contractors
You’re going to need expert help in esoteric areas such as “search-engine optimization” to attract customers, in package delivery and in manufacturing if you are launching a product. You’ll improve your chances of success if you select contractors carefully.
The Laws winnowed a list of 100 potential manufacturers down to 25 for trial production runs before settling on six or seven. “People will tell you they can give you the world,” says Francis Law, “but if you take a hands-off approach, it will come back and bite you.” Says Mao Ronghua, the 28-year-old founder of 51food.taobao.com, which sells fresh food and produce online: “The relationship between us and our logistics partner is just like lips and teeth. As the Chinese saying goes: If the lips are gone, the teeth will feel cold.”
Don't Plan on Making Money Quickly
It’s a virtual jungle out there. Mao said when he first got started, he was surprised to discover how much importance consumers place on the sales volume of Taobao stores when choosing a vendor, a situation that leads to brutal price wars as store owners try to boost volume—and their all-important Taobao ratings derived from customer feedback—through deep discounting. In this margin-crushing environment “it took us one year to gain stable profits,” Mao says.
Even If The Customer is Not Right, Don't Ignore Them
Online vendors have to overcome consumer angst because wary Chinese e-shoppers can’t fondle products before they buy. You’ll need to use Taobao’s instant-messaging tool, called Ali WangWang, to answer real-time customer questions about sizing, shipping speed, and so on. Be available for hand-holding from morning to evening. Some sellers offer IM service until 11 p.m.
Dealing with crazy demands? “I would try to avoid direct conflict with unreasonable customers and let them vent their anger,” says Mao. “The less you say, the fewer mistakes you will make.” Or try this approach practiced by Su Renfeng, 28, who has been selling photography services on Taobao since 2010: “No matter how rudely clients treat me, I will care for them as much as my first love.” This is not a joke. More than consumers in other countries, Chinese e-shoppers are deep into social media and pay close attention to comments others post online when making buying decisions. Bad e-word-of-mouth from a jilted customer can be poison.
Expect To Be Imitated
If you are successful, your business model or product will likely be copied. “The key is to differentiate yourself from others” by offering lower prices, faster delivery and better service, says Mao. “Product, service, price, and marketing strategy matter.”
Get Mature, Get Busy
The good news about running a Taobao e-commerce business is the flexible hours; you don’t punch a clock. The bad news is, your store is a 24/7 operation, so in the beginning you’ll be working most of the time. Forget about going to nightclubs, karaoke and dating.
Expect To Make Mistakes
Mao says he messed up at first by avoiding participation in promotions run by Juhuasuan, Taobao’s daily deals website. He figured selling items at severe discounts was a formula for losing money. “I didn’t realize that the purpose of joining promotions is not to make profits but to raise exposure and brand awareness,” says Mao, who is now a Juhuasuan believer.
Remember, mistakes are an entrepreneur’s best teacher. “You need to be prepared for failure,” says Su, “and always keep the faith that your failure this time will help you succeed next time.”
Aspire To Help, Not Just To Get Rich
The most successful entrepreneurs aren’t doing it just for the money. They’re doing it because they want to make a difference in people’s lives. “We started thinking about a business when we were living in Beijing in 2010 and were suffering from the air pollution every day,” says Richard Law. “We realized we wanted to help not only ourselves, but also our friends, family and the general population.”
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