International commerce solution providers need further localization

By October 23, 2012 1 comment

Although more and more western multichannel commerce solution providers foray into China, and particularly stare at the huge opportunities of merchants and retailers going e-commerce or m-commerce in this country, the most thorny issue which haunts these foreign service providers is always how to get my new clients? Because unlike manufacturers or retailers which can utilize digital/social marketing tool to allure mass consumers, service providers for enterprises still primarily resort to traditional ways, i.e. recommendation, connection and partnership to land a business contract.

Last week, I went to an e-commerce solution event in Shanghai. Introduced by a friend, I had the chance to talk to high executives from two very reputable e-commerce service providers from Europe.  One is specialized in IT solution while the other is in payment.

The innovative showcase in their conjoined booth was the “mobile shopping wall”, basically a wall of images of displayed products for passer-by to scan and buy via smartphone.  The concept is actually akin to Tesco’s Homplus subway virtual store in Korea and Yihaodian’s (China’s leading grocery online store) imitation of Tesco’s practice in Shanghai’s metro station last year.  I would not say it was not innovative, but must admit nor were my eyes goggled with amazement.

I do not refrain myself from above digression because I want to give a rough idea of their technology capacity without referring their names. The two companies are now seriously expanding their business in China, and that is why they attended this event to launch intensive marketing propaganda, and invited various local media for PR press release.

Based on my chat with the two companies, I figured that currently they form partnership approach to enter into China, since the two perfectly complement each other an e-commerce front end supply chain. If IT solution acquired a client, the payment provider would get recommended immediately, and vice versa.

In addition, they also mentioned other company names in their little “confederacy”, and no big surprise, most in such alliance have the same country origin. The approach is good, but definitely can do something better. So I asked one of the executives whether his company has formed any partnership with non-European background companies, especially with local logistics companies, his answer was “not yet” but kept nodding his head for the determination of going that direction.

But it might be easy to determine, and much harder to execute. I perceive partnership outside of your own country back ground can be outside of your comfort zone, or sometimes even out of your league. To maintain status quo is fine, as you would keep serving certain European clients which already have their business presence in China. Nevertheless, in such way, it would be very hard to inject a new blood of Chinese clients into your company; in such way, your localization job is just half way done.

I noticed that IT solution provider only opened a Hong Kong branch, yet no physical presence in mainland China at this stage. Sooner or later, I think they will open an office in mainland China, and hope by then, they will be able to hire a bunch of Chinese employees who must have profound local connections and know the tactics of forming partnership with non European companies. Once were such bottleneck conquered, it would truly propel its growth and bring up its performance into a whole new level in China.

Localization is a word which we often hear as an ultimate instrumentality for international companies, however many have still been criticized for not pushing it sufficiently; perhaps for starters, localized your partnership, and even such baby step can work you to sweat.


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1 Comment

It is only from you that I came to learn the fact that Localization is a word which we often hear as an ultimate instrumentality for international companies. Many thanks for sharing such an informative piece .well done team

Submitted by Clickhere (not verified) - on November 07, 2013 at 01:07 pm

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