This is a plead to all Rakuten Marketing Merchants to start exploiting the full reach of the Rakuten Global Affiliate Network. My heart cannot take any more recruitment proposals being shut down because a client “doesn’t ship overseas”!
Learn from Strategic Account Manager Angelika Porfyratou why it’s beneficial to your organization to ship overseas, how to regonize your APAC customers, and what you can do to meet their shopping needs!
The Asian Pacific market is leading E-commerce is not something new. Despite that, so many merchants are still reluctant to explore how to grow in these regions. “Increased import & consumption taxes,” “shipping costs,” and “animal testing regulations” are only a few of the panic terms associated with the subject. Fortunately, the APAC market is fearless and has developed ways to engage with international merchants regardless!
The Desire for American Products in China: A History
It all started in 2008, with the so-called “baby formula scandal”, where toxic melamine was identified in infant formulas across China. Thousands of toddlers were infected and the Chinese’s trust in locally manufactured goods was strayed. As a result, Asian consumers gradually turned to international retailers for their shopping needs. Needless to say, their purchases were not limited to baby formulas!
Advances in technology and the social media space (including Chinese social media platforms such as Sina Weibo and WeChat) has allowed APAC consumers to find and compare any products their heart desires. Interestingly, this extensive engagement also lead to the realisation that due to import taxes, foreign-based brands are significantly more expensive if bought locally, as opposed to directly from the international retailer. Thus, purchasing aboard is what they did! These highly eager and savvy consumers discovered several loopholes that allow them to obtain any foreign commodity they want – regardless of whether the brand agrees to ship to their region! Last year, only Chinese consumers drove the majority of global purchases (>31%).
Buying Abroad: How the APAC Customers Find, Research, and Purchase Internationally
How? They start by using digital spaces, such as Sina Weibo & WeChat, for their comparative research. These shoppers are then converted by engaging in either of the below activities:
- Traveling Abroad:
- According to the Fortune Character Research Center, Chinese travellers’ spent enough while overseas to account for more than 46% of luxury consumption! This spend was scattered across Europe, North America, and the Middle East. These countries were the most visited non-Asian destinations by Chinese travellers (+306% since 2011!!). GfK reports that this new wave of visitors are “ambitious” travellers “willing to spend [more] money and pamper themselves” than your average tourists. Commodities are already cheaper than in their own countries, and the appeal of a tax refund upon their return makes these shopping experiences even sweeter!
- Airport retail in 2015 accounted for 6% of the global luxury market and reported +25% YoY growth, only illustrating jet setters’ shrewdness (as well as the benefits of) of duty-free shopping. They recognise the satisfaction of a good bargain and are more willing to pay the price of carrying some extra luggage!
- Furthermore, retailers must not fail to consider the steep increase of international students, which are not to be treated as average pupils saving up for their party shots. Forbes Asia (2014) draws an interesting profile, illustrating how Asian students are a highly lucrative market. Not only are they willing to spend in favor of acquiring the latest brands in fashion, but they also act as personal advisors and/or shoppers to their social groups. Their ever-growing social media platforms are swamped with shopping insights, updates, and bargains. Should any of these attract a consumer, students can offer to purchase on behalf of the interested client. This brings me to the next acquisition trend…
- “Daigou” specifically means is buying on someone’s behalf. But for digital marketers, this term has actually started to define a new market. Specifically, the immense demand for internationally sourced commodities by Asian consumers has correlated for the increased desire of personal shoppers, or a Daigou. Asian expats and/or students have adopted this new career: they will shop on behalf of APAC-based consumers and earn commission on their tax return upon shipping.
- Freight forwarding:
- If not purchased via traveling or Diagous, Asian Pacific consumers are frequent users of freight forwarding companies! Essentially, they have all their oversea purchases shipped to local warehouses, which mediate the delivery to the respective APAC destination.
Identifying and Expanding to APAC Customers
It’s often been the case that a retailer’s site reports high traffic from the APAC market, but is assumed not to convert any sales due to a lack of or high shipping costs. Yet, retailers fail to consider that this traffic may be converting – just not by having the products shipped to them directly.
Below is a list of popular freight forwarders. Should a merchant with high APAC traffic notice their orders being shipped to any of the below warehouses’ addresses then it would be safe to assume that APAC consumers are big fans!
Top Freight Forwarders (courtesy of the DealAM team):
Evidently, should a retailer be interested in expanding its international reach, exposure on any Asian Pacific targeting affiliate site is of great importance. Doing so will allow the brand to control the content and merchandise available. Then, using the data the Rakuten Affiliate Network platform reports on will enable the advertiser to further enrich their understanding of their APAC consumers’ behavior. This will also tell the advertiser whether there is any unconsidered incremental value in exploring an international expansion further. Platinum partners, such as the Deal AM group sites (55Haitao – SID: 2927537, DealAm/Baijie – SID: 2412668 , GoCashBack – SID:3099762, LinkHaitao – SID: 3269724) are a safe starting point!
Don’t be afraid to explore partnerships with APAC affiliates. Let APAC consumer’s come to you! “Think Global, Act Local” is the Rakuten Marketing Motto; I recommend you try it out!
*Special thanks to Angelika Porfyratou, Strategic Account Manager, Rakuten Marketing Europe Limited/Exchange, for contributing this article!*