Blog Post • 26 April 2022

Unlock China DTC From Your Own .com

“China used to be 15% of our total revenue but we had to shut it entirely”, said Claire.

“15%? Direct orders through your site? And you turned all that business away? Why?!” I said in disbelief.

“Yeah, the customs failure rate of 30% was just too high for us to bear. Our parcels could go missing for months before we could find their whereabouts. While we located our parcels, customers grew impatient, either requesting a refund or a redelivery. 

For the parcels that we managed to find held by China Customs, it could take up to 2 months and cost customers up to 50% tax to retrieve them. We just don’t have the knowhow to contact China Customs or the manpower to handle disgruntled customers.” Claire explained, resignedly.

Claire is the founder of a niche skincare brand based in UK. Despite all the traffic from China she saw on her site, she just couldn’t find a cost effective and frictionless way to convert. In the end, she had to give up a business that grew 20% a year consistently and constituted a good, and rising proportion of her business and was high margin vs the traditional routes to consumers involving distributors and marketplaces

Claire is not alone in shying away from selling direct to the world’s largest eCommerce market.  Many retailers that benefited from high spending Chinese tourists have lost this market due to travel restrictions and seek new ways to engage directly with Chinese consumers

With more than 50% of retail transactions happening online and a rapidly growing “middle income” population, the Chinese eCommerce market is not just bigger than any other market, but the next 10 markets combined. Chinese consumers hunger for buying authentic international brands direct from the brand is stronger than ever powered by rising incomes, increasing sophistication , desire for authenticity, and inability to travel

Yet, China’s unique digital ecosystem and complex regulatory environment have made exploiting this US$1.5 trillion market a difficult, laborious task for international merchants, from brands to marketplaces. Given the challenges presented and potential upfront investments required, many international merchants either opt for the default solutions of working with a local Chinese third party, or simply watch from the sidelines.

But it doesn’t have to be this way.

What if there is a way to do China DTC from your .com providing Chinese consumers the same shopping experience your domestic customers enjoy? What if there is a way to do China DTC without having to navigate China’s complex customary system? What if there is a way to provide your Chinese customers door-to-door parcel trackability and much faster delivery?

Nomad Checkout is the answer.

Our years of working alongside international merchants and operating eCommerce on the ground in China have helped us thoroughly understand the problems and successfully built our disruptive solution, Nomad Checkout.

An easy website plugin that can be up and running within days, Nomad Checkout offers a turnkey solution to unlock China DTC by materially improve shopping experience on your domestic .com. The major problems that Nomad Checkout solve include

  • Slow site speed: The various commonly used Western pixels installed to a .com significantly slow down the load time for Chinese consumers. On average, the load time is 4X slower for Chinese consumers. Consequently, Chinese consumers often run out of patience during the long processing time and aborted their transactions. Nomad Checkout improves the load time for Chinese shoppers by 4-5X for it to be on par with that for domestic consumers.
  • Unfamiliar payment method: China has one of the world’s highest level of digital wallet adoption. It’s a market where even street beggars refuse cash and accept WeChat Pay and AliPay only. Yet, these payment methods are far from well-adopted by the Western eCommerce ecosystem. Nomad Checkout allows Chinese consumers to freely choose WeChat Pay or AliPay at checkout without any additional effort required from merchants.
  • Unknown and burdensome logistics: International players like DHL are not licensed for cross border eCommerce (CBEC) in China. Very few international players have direct access to the vast and complex logistical network in China and often have to rely on multiple layers of subcontracted local logistics players. This has resulted in lengthy delivery time and intrackability of parcels. Nomad Checkout is fully integrated with China’s leading logistic companies and provides fast delivery time (of one week from the West) and door-to-door trackability.
  • Costly customs charges: Approximately 30% of the parcels are stopped by China Customs for failing to meet its declaration and tax requirements. Chinese shoppers are responsible for paying up to a whopping 50% tax for their parcel retrieval. Worse yet, this process can take up to 2 months, in addition to the long delivery time. This unequivocally displeases the shoppers and discourage them from repeat purchases.

Our Nomad Checkout helps with the time-consuming product customs registration in advance for speedy customs declaration. Nomad Checkout also automatically calculates the tax in advance to ensure no hidden cost for customers. As a result, Nomad Checkout can reduce clearance failure rates from 30% to less than 1% only.

Nomad Checkout helps unlock China DTC by overcoming all the key barriers of transacting with Chinese shoppers. It helps your site load like a local page for Chinese consumers, calculates true tax-embedded prices, be China Customs compliant, and drastically improve delivery success rates and time. There is an easy and inexpensive way to tap into the world’s largest eCommerce and enjoy the growth.

Contact our team at [email protected] for further information.

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