Cyber sails to the Mainland 

Teaming with Mainland online and catalogue sales operators allows Hong Kong companies to rapidly break into the Mainland market, tap valuable consumer resources and boost product sales.

A good example is that of Red Baby, a Mainland catalogue sales firm, which has helped Hong Kong companies open up the domestic market through catalogue and online sales channels. The company has a network of marketing, purchasing and operational centres to combine retailing with media, logistics and financial services.

Red Baby Vice President, Liao Weiguo, says these operations have particular advantages. First, online or catalogue sales are themselves an effective medium for product promotion and can deliver the desired marketing.

Also, online and catalogue sales are a form of “database marketing” and ultimately provide customer data for “target marketing”. With the help of backend data mining, it can show what consumers have bought and how much they have spent within a certain period.

That helps the sales process and ultimately replaces the old practice of “products looking for consumers” with “consumers looking for products”.

Finally, this approach saves business operators the costs of introducing products to the market, including that of advertising and inventory, as well as the costs of setting up physical stores and building in wages.

Ideally, an online platform can facilitate products being sold at lower prices and consumers will have more to choose.

Red Baby provides customers with a convenient means of shopping and value-for-money products through catalogues and the Internet. It has expanded rapidly after its establishment and has now become China’s biggest catalogue sales operator, with five product lines, including maternity and baby goods, cosmetics, health care products, gifts and household goods.

Compared with traditional retailing, Red Baby says its most important advantage is that it can achieve an accurate grasp of consumer information through its call centre and website, while collecting information on market demand closest to its consumers.

After achieving a better understanding by tapping information about consumers, the company reckons it can then develop new product lines that meet consumer needs and make these its core business.

Red Baby identified its target consumers by analysing the information obtained. Young mothers usually play a decisive role in shopping for the family.

So, the company has turned itself from a dealer of maternity and baby goods supplies into a dealer of household goods.

On the basis of its maternity and baby goods catalogue, it has introduced a number of other catalogues, including Red Cosmetics, Lifestyle, Health and Health Food, with product lines extending to cosmetics, health care products, household goods, computer technology, communications and consumer electronics products.

For Hong Kong-funded enterprises turning from exports to domestic sales, the most difficult problem is to build up market networks and channels. Many only have experience of dealing with overseas orders and aren’t familiar with the domestic market.

Also, they don’t have mature business connections or marketing channels so have to begin relationships from scratch. This requires financial or personnel resources and often takes a long time to build. Working with a company like Red Baby could be an option worth trying.

The Chinese mainland has 250 million web users, ranked top in terms of numbers globally.

An increasing number of enterprises are beginning to attach importance to Internet marketing and website building. Many leading brands are maintaining ties of strategic co-operation with e-commerce platforms and speeding up their efforts to open up the cyber market.

The HKTDC Design Gallery opened a new shop in Beijing in June this year to help Hong Kong products into the market.

Many brands are hoping to find agents and marketing channels in Beijing, but department stores and shopping malls are not their targets because of their high entry thresholds. Their top priority is to find a means of making themselves known to the local people quickly and at a low cost.

Red Baby, for example, has set up 17 branches in different cities including Tianjin, Shanghai and Nanjing, with each branch controlling its own inventory to offer a stable marketing approach.