By Vicki Matranga, Design Programs Coordinator
Wednesday, June 18, 2014
After an exciting first day of sessions and yesterday’s deep dive into the customer-centered marketing approach presented by Jonathan Knowles,Day 2 of the IBC Global Forum offers five country market overviews from retailers in China, Russia, Brazil, Czech Republic and Australia. Mark Zhang, president and founder of DUHUB, International, began with a market overview of the China market.
After earning an MBA from Renssalaer Polytechnic Institute in Troy, New York in 2000, Mr. Zhang was head of online sales and operations for Google China and worked for Dell China and GM. He held various senior management positions in Cisco US, GE US and Michi China Group. In 2008 he established DUHUB International as a leading sales and marketing company to introduce and promote international home design brands in China.
With operations in Beijing, Shanghai and Shenzhen, Mr. Zhang positioned DUHUB to distribute multiple brands from Europe and North America to the major cities in the China market. It aims to bridge the Western lifestyle with the needs of middle class Chinese. DUHUB covers more than 1000 outlets, including department stores, shopping malls, independent shops, boutiques, kitchen stores, design and gift stores, museum shops, coffee and tea shops and chain stores. The company’s Design Trade Alliance (DTA) is the service platform to help foreign brands enter the China market in the appropriate fashion. DTA promotes top brands to specialty shops. DUHUB was honored to be named the official partner for Beijing Design Week in 2012.
As more companies are developing product specifically for Chinese consumers, Mr. Zhang opened by presenting opportunities and challenges.
Key Facts About China
Thirty provinces, four metropolitan cities with the coastal areas more developed than the inland cities, which are now growing quickly.
1.4 billion population, 25 million in Beijing, #2 in the world GDP, 2nd after U.S.
#1 in the world for penetration of internet, 618 million internet users, with 81% mobile users.
Online shoppers: 302 million in 2013, Groupon type of purchasing is very popular.
In May 2014 sales of social retail for consumer goods totaled $343 billion USD, with higher than
expected 12.5% growth. Online counts for 7.4% of total retail goods and growing very fast, doubling annually. Tmall (50.6%) and JD.com (23.3%) dominate the market. Amazon holds 2.1% of sales.
Opportunities
- Growing consumer demand
- Changing consumer behavior, esp. with younger generation
- Tier 2 and 3 cities offer huge potential for growth. Now residents of Tier 3 cities come to Tier 2 cities to shop
- Online offers fast-to-market opportunities
- Chinese people travel for business and vacations and see global brands they then want to buy at home
Challenges
- Immature retail market
- Regulation & local policies
- Culture differences
- Logistics
- Product category management
Important aspects of doing business in China
- In this huge country, it is important to identify the proper cities that would be most appropriate for your business.
- Free Trade Zones
- Choose local partners and treat this cooperation seriously
- Patents are important, but brands are even more
He distinguished between the importance of online and onsite retail growth and suggested that a brand should establish a physical presence before introducing its online presence, which then grows quickly with complementary brand-building experiences. China is very receptive to U.S. brands and younger consumers are deeply engaged with social media platforms such as Facebook and Twitter.
DUHUB Stores, Appearances and Programs: Designed for Life
DUHUB stores create unique looks and programs in different locations in malls and shopping centers to capture high traffic 28-48 year old consumers. Successful in-store programs are based on education and experiences such as product demonstrations, tastings, and engage consumers in DIY craft-making activities and events with designers and celebrities. DUHUB has a broad media reach and collaborates with 400+ publications and websites and sponsors cooking shows and product competitions on television.
Focusing on three key cites: Beijing, Shanghai and Shenzhen, he explained the sales networks and the market characteristics of these regions.
DUHUB aims to be the one-stop hub for world designs. The company’s name joins Design + U (Unlimited, Universal, United) + Hub. Mr. Zhang believes that design contributes to a better life and that everyday life is better because of design.
