E-commerce the China Way With James & Wells

Johnathan Chen of James & Wells Intellectual Property Experts recently published a blog on their website at http://www.jaws.co.nz, on E-commerce in China. As Johnathan explained,

E-commerce is a term that covers a very broad range of activities, from simply cementing orders over the phone to the highly sophisticated online marketing and selling systems that are increasingly dominating economies around the world.

 

As Johnathan says, the huge economy that is China is no laggard in the e-commerce area and those trading with China need to come to terms quickly with what electronic trade looks and feels like there. There are the Amazon-style emporiums like Alibaba’s Tmall, but there is also the recent phenomenon of Daigou – a channel that has evolved in which people buy goods in countries outside China ‘on behalf of’ (the literal translation of Daigou) consumers in China.  They locate themselves in, for example, New Zealand, buy the item or items and send them back to China, either individually, or in bulk - in which case they are repackaged in Hong Kong and on-forwarded to the individual customers.

 

Johnathan goes no, “It’s a workable and legitimate channel and for small to medium enterprises (SMEs), it’s not a bad option if you don’t have the marketing resource to get goods to China or have a presence there to sell.  Moreover, if the goods take off, it can go viral for the lucky Kiwi company via word-of-mouth and social media, especially if you can access a niche, targeted market and have key opinion leaders KOLs) on board to endorse your product.

 

“But Daigou can be a double-edged sword.  It’s a very quick, easy and cheap way to get your products out there – but easier ways usually come with higher risks.  The Chinese marketplace can be brutal on naive suppliers; you still need to take steps to protect your brand, locking it up with suitable IP protection.  Unprotected brands will soon draw the attention of opportunists and the risk of trademark “trolls” ripping your IP out from under you.”

 

This means that Kiwi companies selling through Daigou in New Zealand are often lulled into the false comfort that they are only doing business in New Zealand, and so don’t prepare themselves accordingly. The products end up in China, so you must have capabilities in-house to monitor what your consumers are saying about your product, and you must ensure that you have ownership and control of your brand(s) in this market.

 

To find out more about intellectual property and James & Wells, please visit the website at http://www.jaws.co.nz .