China, ecostore and finding your gap in an overseas market

05 June 2018 / Published in Business

When Malcolm and Melanie Rands first launched their series of safe, sustainable home and body care products on the Northland coast in 1993, they probably didn’t expect to see their products lining the shelves of international stores. But today, ecostore exports to over ten markets worldwide, including South Korea, Japan, Hong Kong, Singapore, Malaysia and Thailand. China is one of the newest additions to this list, ecostore launching there in October 2015. In just two years, China has already grown to represent over 10% of total business, 22% of total exports.

Despite the speed in which they reached those numbers, ecostore’s journey into China was actually one of patience and careful planning, after originally discovering their baby products were being resold in Asian markets. Recognising a demand, they set out to learn as much as they could about why the Chinese consumer connected with ecostore, and how could they make the most of it.

“Everything about it is different,” says Jemma Whiten, Director of Marketing and Digital. “There are cultural differences in the way that they do business, the kind of platforms that they have – their e-commerce is so advanced. It was so important getting the right people, who understand that landscape, and then investing and doing the research.”

Derek Yu, China Market Manager, says the first step was figuring out what was already available. A quick search on Chinese e-commerce C2C platform Taobao found over 100 pages of ecostore products being sold by daigou: personal shoppers who purchase products overseas for buyers back in the mainland.

“Initially, there’s a honeymoon period. You’re happy that your brand from Australia or New Zealand has made it to China with so little effort. But when you actually do want to move into that market you realise that you need more than a C2C channel.  So at the end of the day, the brand needs to involve and commit to the China market regardless of the entry point.”

 “We needed to put some initiatives in place to better understand each of the touchpoints along the journey, and to make sure we’re delivering the right message to consumers otherwise we may be growing, but we don’t know why or what’s actually happening. We decided to spend at least a year really doing the homework.”

One thing that became apparent early on was that trying to adapt the ecostore brand could do more harm than good. The growth of the Chinese middle class and increase in disposable incomes has resulted in consumers increasingly looking for premium international brands, and Whiten says much of ecostore’s appeal rested in its sustainable image.

“One of the key things in our category is actually not to adapt too much. In many ways they are looking for an international brand, a New Zealand brand, because it carries with it integrity and trust in the products that they are looking for. They’re looking for something that is safer for the world. They want to do a little bit of good and our products allow them to do that. If you change it too much, you would lose that.”

Eventually ecostore decided to launch their own e-commerce store through Tmall, a Taobao spin off intended for B2C retail, and operate alongside the daigou. This would allow them to own the data and gain insights and a greater understanding of consumers, says Yu.

“China has different hurdles. You think of brick and mortar and competing with multinationals, but actually it’s the daigou, the fragmentation of the audience; the product is more niche. I think it’s really about understanding and making proper use of each channel. For example, Tmall is not just about the sales, it’s also about broadcasting your brand and understanding consumers. So when we choose a partner it’s about understanding their strengths. We look at the different capabilities. They also have to understand our brand and believe in sustainability as the goal.”

Understanding those unique channels isn’t always easy though, and a contributing factor to ecostore’s delayed entry into the market was ensuring they knew how best to utilise the options at hand. Yu’s expertise was invaluable, says Whiten, but they needed partners they could rely on that knew the channels and the audiences.

“One of the key things when moving into any market is trying to see if there is a gap in the market and a market in the gap, and whether or not your brand appeals. If you really care about your ROI, it’s about really understanding your niche, that gap. In many respects it’s not “should I enter that market?” It’s “do I have relationships or am I able to establish relationships with partners who genuinely understand those markets?” Alongside Derek, we have market managers in Korea and Japan based there that helps us with those markets. Because no matter how big the gap is, no matter how big the opportunity is, if you don’t have that expertise it’s going to be hard, hard work.”

“But if you’ve got that – thanks to China’s massive size and the scale of its market, it is actually possible to get a positive return on investment, even at an early stage.”

For Yu, it always comes back to the ecostore brand. That original vision established on the Northland coast in 1993 is what continues to drive the brand as it expands overseas today.

“Of course you have to profit sustainably and you have to grow there, but you need to know your mission. Ask yourself, as a brand and as a personality, what sort of message do you want to deliver to the world? I think ecostore has very clear values and they’re what we’ve been working towards for the past 25 years. So that guides how you engage with consumers and through which channels.”


More articles from ASB