China Cross Border E-commerce Sale Channels (2) Standalone E-commerce
Updated: Nov 4, 2019
In the previous post, we have discussed China cross border e-commerce sales channels (1) Marketplace. In this article, we will dive deep into the other sales channels (2) Standalone e-commerce website. To begin with, we will illustrate the pro & cons of standalone e-commerce websites, compare standalone websites with marketplace platforms and then we will also introduce the WeChat mini-program, which is one of the emerging standalone e-commerce website in China and compare it with mobile APP.
Standalone E-Commerce Websites
A standalone website is an independent website, and it consists of
Mobile website (H5)
The advantages and disadvantages of standalone e-commerce websites can be summarized as below.
The Major Benefits of Running Standalone E-commerce Websites
1. Independence and Freedom
One of the biggest advantages of running standalone e-commerce websites is that the brands fully run the autonomy of the store operation. Standalone e-commerce websites can be bound to independent domain names, which enables customers to easily identify corporate brand information. Besides, standalone e-commerce websites can alleviate the dependence on the marketplace platforms, avoiding many special restrictions by the platforms and setting their own rules.
2. Flexibility and Friendliness to Branding
Standalone e-commerce websites maximize the flexibility regarding implementing the brand strategy, highlighting brand personality and facilitating brand promotion as standalone e-commerce websites possess their own control over the website design, promoting campaigns, etc.
With standalone e-commerce websites, brands are capable to add more powerful and scalable features when operating their own stores, giving customers a more customized and unique experience, whereas for the marketplace platform operation, the designs and promoting rules are constrained by the e-commerce platforms, rendering relatively less space for brands to manifest themselves in the communication with customers.
Apart from that, standalone e-commerce websites can easily express brand advantages by telling brand stories as marketplace platforms aggregate multi sellers or competitors on-site for consumers to compare and there is no intense peer comparisons in the standalone website. In other words, standalone websites can be exclusively sourced which can avoid the malicious low-price competition of the platform and improve customer retention and loyalty.
3. Full Access to the Data
Data is the biggest wealth and resources for cross-border retail. The primary advantage of running standalone e-commerce websites is that brands or retailers have full access to data resources. Brands or retailers can make full use of the data in the implementation of marketing, customer maintenance, and brand building.
Thus, with standalone websites, it is convenient for brands to enhance corporate image, flexibly display corporate information and fully demonstrate corporate strength. As an inevitable stage of business development, standalone e-commerce websites provide functional customizations and enable business inspiration and fully implement creativity.
Disadvantages of Standalone E-commerce Websites
1. Traffic acquisition is a bottleneck of standalone website
For standalone e-commerce websites, driving traffic is a key task. For those gigantic e-commerce marketplace platforms, they drive exceptional traffic due to its exponential availability of product portfolio, while for a new standalone e-commerce website, it takes time to drive the traffic.
2. High threshold: require to have an excellent technical team and operational team to support
The standalone e-commerce websites involve a lot of technical inputs, such as IT infrastructure setup including independent domain name and server purchase, page design, page maintenance, and other customized inputs including designated payment solutions, logistics solutions, etc. Additional costs and investments also incur when it comes to managing warehouses in the country of origin.
3. Marketing promotion is more difficult
To build a standalone e-commerce website from scratch is a very rigorous and large-scale task, which involves several stages including the establishment of standalone e-commerce websites, order acquisition, marketing promotion, etc. It is inevitable that the implementation of a standalone e-commerce website is complex and capital-intense because the investment is large and the life cycle of the implementation is long.
Especially in the early stage of running a standalone e-commerce website, it costs a substantial fortune for constant market investment.
Generally, the marketing promotion of standalone e-commerce websites that are targeting an overseas market requires a professional team to tackle with it, which does bring a certain threshold and difficulty for small or less known brands or enterprises. Besides, the trust establishment of new customers requires a relatively long period.
To give a more comprehensive illustration, we also have summarized the comparison of standalone e-commerce websites and marketplace platforms below.
WeChat Mini-Program & Mobile APP
WeChat mini-program is the sub-application within the WeChat ecosystem. WeChat mini-program was initially launched more basic in terms of technological perspectives than native APP and there are many features attached to WeChat mini-programs such as additional contents, availability of transactions, referral program, etc.
There are five primary ways for the customers to find the WeChat mini-program:
1) Search it directly on WeChat
2) Find it linked to the WeChat Official Account
3) Find Mini Programs Nearby in WeChat
4) Scan the QR code in the offline scenario, such as advertisements. It is very suitable for the scenario of marketing use in the offline store in conjunction with the utilization of the WeChat official account, etc., with which the brand has formed a closed loop of WeChat business.
5) Receive it from the WeChat group or a WeChat friend
Brands are able to set up the WeChat mini-program to interact with potential consumers and make it possible for consumers to view product information and purchase favorable items without downloading any APPs.
Here is the flow about how WeChat users make a purchase through a mini-program.
Advantages of WeChat Mini-Program
1. As a heavyweight product of WeChat e-commerce, WeChat mini-program has the advantage of being deeply connected with WeChat and grafting WeChat 900 million daily users.
2. Moreover, the WeChat mini-program users’ threshold is quite low since the WeChat mini-program does not need to be downloaded and occupies any memories on the users’ mobile phone.
3. The customer acquisition cost of the WeChat mini-program is pretty low.
Disadvantages of WeChat Mini-Program
1. The initial positioning of the WeChat mini-program is to let customers use it immediately, without downloading any APPs or being directed to the website. The feature also gives WeChat mini-program some limitations that it would be difficult to retain the customers.
2. Apart from that, there are other obvious shortcomings of the WeChat mini-program that the WeChat mini-program cannot carry large applications since the size of a mini-program is limited to 10 MB.
3. WeChat users can not share the WeChat mini-program on WeChat Moments, which is the social networking feed.
Advantages of APP
APP can achieve many functions.
1. With the availability of a native APP, brands are able to customize the branding and design the APP page.
2. In the user journey of APP, the user experience is good, the fluency is high, and the response speed is fast.
Disadvantages of APP
1. The cost of developing a native APP is much expensive than that of developing a WeChat mini-program.
2. It requires the brands to make use of other marketing channels to promote the APP
Here is the summary of the WeChat mini-program and APP.
Logistics Models of Standalone E-commerce Website Vs Marketplace Platforms
In the part, we will illustrate the logistic models of standalone e-commerce websites and compare them with the sales channel of marketplace platforms. ( See below chart)
If the standalone website is located outside of China, that is, the entity is located outside of China, the server is outside the country, and the operating entity is also outside of China, then the new E-commerce Law is not applicable in this case.
Under this circumstance, most of the brands or retailers will adopt the logistic model of personal effect for cross border transactions. For the standalone e-commerce website, it should enable a portal for chinses customers to upload the ID for the purpose of customs clearance and make additional efforts such as proving customized and localized payment methods such as Alipay or WeChat pay to provide a frictionless paying experience for Chinese customers.
If the standalone website is located in China, the goods are imported through the form of ordinary goods trade, at this time involving import and export laws.
Mode 3 in the above chart is the critical cross-border e-commerce standard model. The cross-border e-commerce here generally refers to the import of cross-border e-commerce. In this model the server of the platform is located in the territory (China), taking Ymatou and NetEase Koala as examples, the marketplace platform is built in the territory, and some brands or sellers on the platforms are overseas entities. In this case, cross border direct shipping & personal effect will be adopted.