FAQ

Frequently Asked Questions

EXPANDING TO EUROPE

Working together with a service provider is not mandatory in Europe.

But building up internal resources for selling online on multiple marketplaces takes a lot of time and is very expensive. Brand have to negotiate contracts with every marketplace individually without having existing relationships to the procurement departments.

Furthermore, the brand has to setup IT interfaces and technical infrastructure to every marketplace and adapt the logistical processes to each marketplace and has to handle stock, order, return and debtor management.

Hence, the brand can’t focus on its actual core competence: designing and producing its products.

The European marketplace landscape is divided  into open and closed marketplaces:

  • Open marketplaces: everyone can sell everything (e.g. amazon/ebay)
  • Closed marketplaces: the decision of selling goods is made by the buying department (e.g. zalando/otto/AboutYou)

The main benefits are:

High potential

Due to revenue increase of 13,3% in 2015 with €455.3 BN market share, Europe is the world’s third largest e-commerce marke

Low barriers

  • Lower barriers for entry to different powerful marketplaces
  • No need of a local setup or costly infrastructure investment in different countries
  • No need of changing products based on regional reasons e.g. confection sizes and dimensions

Many regions but one warehouse

  • Strong markets like UK, France and Germany fulfilled by one partner
  • Strong control over processes/sales channels/branding

New business opportunities

  • Buyers have a limited purchasing budget. They want to test new products before purchasing directly.
  • Marketplaces source out risks and processes by offering a mix of wholesale and consignment business. Brands, who want to offer the full assortment, can offer their products via marketplace business (Example scenario: 30% wholesale and 70% offered in marketplace business).

To reduce the complexity, Zitra is the single point of contact for both the brand and the marketplace:

Hier muss eine grafik eingefügt werden!

From preparation to implementation to go live it takes approx. 10 weeks.

This depends on the internal line-op of the individual brand.

We highly recommend to start with the online expansion with a market entry strategy concept.


Expanding to China

The Chinese e-commerce market is highly competitive, complex and frankly may not necessarily be suited for every brand.

Why? Because Chinese consumers are price conscious in terms of steady search for discounts vs. quality conscious in terms of assuming that a high price indicates high quality, and brand obsessed and crave authenticity and reliability in their shopping experience.

In order to be successful in China, a brand needs a certain level of awareness and/or relevance to be recognized and purchased by the Chinese online shoppers.

In order to avoid the risk and unnecessary costs for both sides, Zitra first analyzes the brand’s awareness and its environment in order to evaluate its market potential in the Chinese market.

B2C Business Consignment

  • Zitras focus is on finding and managing TPs in order to utilize the local e-commerce know how and best experience
  • Brand/retailer management team handles all aspects of the business development across all e-commerce channels
  • Zitra steers and controls the operational work of TPs locally and the business results

Vs.

B2B Business Wholesale

  • Zitra provides a Chinese merchandise and key accounting/ sales team
  • Zitra sells to the relevant e-commerce platforms in China
  • Zitra acts as trade agency or as a traditional and/or digital distributor

Chinas cross-border marketplace business demands e-commerce service providers as certified third parties:

A Third Party Service Provider, also formerly known as “Tmall Partner” or nowadays as Trusted (marketplace/trade) Partner, is a Chinese service provider/agency, that offers international companies access to Chinese e-commerce platforms and has operational responsibilities for shop/platform content, marketing and customer service in China.

Why the need for a TP?

  • Tmall Global established a system where companies must be directly invited by Tmall or apply through the lobbying of a TP.
  • Tmall, JD and other e-commerce platforms certify TPs if they meet certain conditions, e.g. cross border e-commerce and logistics experience, boast a multilingual staff, and have ERP systems and IT interfaces integration ability.
  • With this system, platforms try to filter out counterfeiters and disreputable companies to ensure quality control and strong consumer confidence.
  • TPs offer an array of different services and expertise for operating a shop.

Zitra is responisble for the strategic and operational management and control over all cross-border activities. Hence, we are the single point of contact for both the brand and marketplace.

 

Hier muss noch eine grafik rein.