Making The Case For A Direct-to-Consumer Website In China

On March 19th I will present at Forrester’s second annual Marketing and Leadership Summit in Shanghai on online direct-to-consumer (DTC) sales opportunities in the Age of the Customer; I will also facilitate a short discussion on the topic with Vincent Lau, Regional Director of eCommerce Asia Pacific for Deckers.  During the track session, Vincent and I will discuss:

How eBusinesses should measure the success of their DTC site. In China, DTC sites can’t generally compete with a marketplace when it comes to traffic and sale volume – the traditional eCommerce metrics. However, they can compete in a handful of other meaningful ways – fashion retailers, for example, report higher average order values, larger margins as a result of not having to sell at discounted rates, and a positive influence on overall sales growth across channels in the region.

How a DTC site compares to marketplace channels. There is no denying that marketplaces dominate the eCommerce landscape in China, and will likely take the lion’s share of online sales for a business, but DTC sites also offer a handful of lucrative advantages. One eCommerce executive noted that the DTC shopper is very different from a marketplace shopper and is ultimately more valuable. Not only do shoppers on DTC sites spend more, they buy across categories, pay full price and engage with the brand in meaningful ways by shopping across channels and categories and contributing to social media communities.

How a DTC site can be a key pillar of a digital strategy in China. Currently, most DTC sites in China operate as a channel to drive customer engagement and as a tool to track customer data. However, a number of eBusiness executives operating a DTC site in China, or who are in the process of building a DTC site in China, have shared that in the longer term the DTC channel will be a key part of their omnichannel initiative in the country. Some shared that they are planning omnichannel basics – buy online, pick-up in store, for example – while others are creating a fully integrated digital ecosystem between mobile, social, DTC, and brick-and-mortar with the hope that each will work together to drive overall in-country revenue.

I look forward to seeing many of you in Shanghai and discussing the topic further!