How to Escape the Three Retail Black Holes in China

Smart ways of growing brand-loyal customers in China

HONG KONG, Dec. 2, 2014 /PRNewswire/ — On Nov. 26, NanoMatriX International Limited hosted a seminar on "How to escape the three retail black holes in China" at the Hong Kong German Chamber of Commerce. Business representatives of international brands from industries such as electronics, IT, fashion, F&B, retail, consulting and more participated in the seminar.

NanoMatriX - Retail and Distribution Seminar - GCC

NanoMatriX – Retail and Distribution Seminar – GCC

China is so large that international brands need multiple sales channels to reach out to customers.  Local distribution networks, along with ecommerce platforms like Tmall and WeChat, are the most popular channels. However, they are opaque to a certain extent. Like black holes, they are massive, attract many brands, products and consumers. In this case, valuable customer and sales information is not made available to brand owners. As a result, the brand owners are trapped, like in a black hole, and are unable to get away from it easily.

Tmall has a 50% market share in on-line sales at a growth of 100% yearly in China. During the 11-11 Sales Event, sales reached RMB 10 billion (USD 1.6 billion) in 38 minutes and a total of RMB 56 billion (USD 9.1 billion) in 24 hours. Consumers like Tmall because of their product return policy, trusted payment methods, abundant product choices and other features. Brands choose Tmall because of its massive customer base. Opening a store in Tmall is just plug and sell! Tmall allows consumers to search easily for the cheapest products; consequently, brand owners need to reduce margins in order to maintain sales volume in the long term. Meanwhile, Tmall does not share customer information with brands.

WeChat is the most popular free and easy-to-use messaging app in China, with 468 million active users around the globe. WeChat allows customers to connect with brands, to purchase items or services. It works for both in-store payments and online purchases. With WeChat, consumers have full control of their privacy; at any time they can switch off unwanted advertisements. WeChat provides various possibilities for brands: mobile commerce, marketing, mobile payment, implementing O2O by the scanning QR codes, and many more. Like Tmall, brand owners do not have access to customer information from WeChat.

Distribution networks have strong customer relationships, local market knowledge and are able to achieve sales quickly. However, distributors are intermediaries who own the customers’ data and control prices and promotions. Due to limited supply chain control, brands may risk reputation and lose opportunities from fake products, parallel imports, etc.

Client cases were presented during the seminar describing how brand owners from various industries with multiple channels successfully address the above problems. Brand owners are advised to define a suitable multi-channel market entry strategy supported by IT systems that can easily integrate data from multiple channels in real time, synchronize data between regional branches and headquarters’ ERP and CRM. They can use TrackMatriX® for unique product authentication, track and trace, and consumer engagement to limit the risk of counterfeiting and parallel trading. Openbravo ERP and Commerce Platform is used in the cases described. Openbravo has more than 400 downloadable modules, such as for localizing the system’s user language and accounting standard, data analytics, etc. Furthermore, APIs are available for integrating with 3PL warehouse management systems, improving end-to-end supply chains and inventory transparency.

All company representatives with local and international presence attending this seminar agreed that it is important to know how to leverage Tmall, WeChat and distributors without losing control. Here, system integrators like NanoMatriX and Openbravo (China) can provide companies with the necessary support and know-how to enhance their competitiveness.

About NanoMatriX International Limited

NanoMatriX International Limited, a certified IT partner of Openbravo and a Hong Kong based company, organized the seminar to introduce the topic and analyzed some real cases in China. Founded in 2004, NanoMatriX specializes in anti-counterfeiting technology and proficient IT integration of agile, scalable and affordable enterprise software (ERP, commerce platform, etc.), as well as mobile tracking and trace verification systems.


Miro Zeng
Phone Number: +852 2523 9959

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