Case Study - US Health Supplements
With cross-border e-commerce growing in popularity amongst Chinese consumers, we often hear about many consumer brands doing very well in China. But today we want to bring your attention to a lesser known but rapidly growing segment within the cross-border e-commerce industry – the vitamins, herbs, minerals, and supplements sector. According to Bain & Company, the VHMS segment is expected to hit 153 billion RMB in revenues by 2019. The most popular brands tend to be from the US, Germany, and Australia, and are all doing quite well in the China market. While some of them elect to set up their own online e-commerce websites in China, others choose to use marketplace platforms. Many of these players mail their products directly to consumers in China, with some offering free shipping on bulk orders.
SF Express has been working with one of the world’s largest online distributors of health supplements, which sells over 35,000 different products across 1,200 brands worldwide. This client took many crucial steps to acclimate to the China market by hiring Chinese executives, setting up a Chinese website, and allowing Chinese customers to pay with online Chinese payment tools. The client went one step forward with community management by setting up a community forum for its customers to discuss the latest natural health supplement products. In China, there is a general level of skepticism of the authenticity of e-commerce products and online communities help consumers review and recommend products together with their peers. It is quite common for many e-commerce platforms in China to develop such forums to facilitate discussion amongst their customers.
This customer, however, was struggling with stringent government regulations that make it difficult for foreign companies to use bonded warehouses to store health supplements products. In 2015, upon learning about SF Express’s end-to-end B2C cross-border e-commerce solutions, the customer began working with SF to deliver its goods to China using both personal and cross-border B2C customs clearance channels. The goods were shipped directly from warehouses in the US to customers in China.
On the marketing side, SF Express also collaborated extensively with the client to help enhance its brand exposure to Chinese consumers. Instead of investing large amounts of money to get onto a large e-commerce platform, the client chose to operate its own independent website and mobile interface; however, with this the client faced the challenge of driving user traffic to its website. SF Express solved this problem by leveraging its strong brand and its internal and external channels to launch a series of marketing campaigns with the client, in order to help market the client’s products and raise its brand visibility and trust amongst consumers.
One such campaign included the SF Certified International Shipping (CIS) program, in which SF Express placed a special certified stamp on each package’s waybill. The standardized stamp acknowledges that the customer is a trusted partner of SF Express and that SF has verified the origin of the package. Fraud is common within the cross-border e-commerce industry, and this is especially so for health supplements products, where it is easy for fraudsters to pass domestic/fake products off as real, overseas products. Foreign products can be sold at a premium and so there is a large incentive for fraudsters to do this. The SF Express brand is known for higher quality, premium services in China, and so the SF CIS program provided a way for the client to build an authentic brand and a sense of trust with its consumers.
Entering the China market and appealing to Chinese consumers can be daunting to many companies overseas. As one of China’s leading express delivery providers, SF Express has been operating in the China market for over 20 years and is well-positioned to advise its overseas customers on their China market entry strategies. For more information on our cross-border e-commerce solutions, please visit our Key to China page at http://www.sf-express.com/us/en/key_to_china/detail/d586fb4a-f120-11e7-9fcc-60c5479253e4/