Since 2011, the cosmetics market in China has seen sustainable growth. In 2018, the market size of cosmetics industry in China reached 3.69 billion RMB. From 2010 to 2018, the average growth rate of the market size had maintained at 7.87%. It is expected that the average growth rate will maintain at 5.4% in the following years. For those selling cosmetics in China, the market growth has slowed but there is no shortage of opportunity.

[Data source: chyxx, ‘Size of cosmetics market in China’]

Regarding the import trading pattern of the cosmetics market in China, since 2013, the volume and dollar value of import have both been rising. In 2018, China imported more than 200,000 tons of cosmetics products with the value of 92 million USD, which was approximately 160,000 tons more than 2013. Such a figure indicates that foreign cosmetics firms have a large business opportunity if they want to enter China’s cosmetics market. 

Cosmetics market in China: Distribution channel analysis

Finding the right distribution channel is important for selling cosmetics in China. Supermarkets and hypermarkets are the main winners in the battle for distribution share of beauty and personal care goods in China.

The increase in sales of beauty and personal care products through supermarkets and hypermarkets comes mostly at the expense of small independent stores, which dominate sales in rural areas. As the population shifts into the cities they are losing distribution share.

The share of direct sellers diminished since 2008 because of the regulation affecting multi-level direct selling. Internet sales have doubled from 0.4% of all beauty and personal care sales in 2011 as penetration of computers is on the rise in China.

With the development of Internet, online sales has become the major distribution channel in China’s cosmetics market. From 2012 to 2017, the market size of online shopping had a significant increase. The sales volume of online shopping accounted for more than 50% of the total sales volume. In 2012, the market size of online shopping was 62.2 trillion RMB. In 4 years’ time, it had surged to 154.4 trillion RMB. It is expected that the market size of online shopping will grow continuously.

[Data source: qianzhan, ‘Size of e-commerce cosmetics market in China’]

China cosmetics market case study: Sephora in China

While many foreign personal care manufacturers have not done as well as expected when entering the Chinese market, premium French beauty retailer Sephora has enjoyed a great degree of success selling cosmetics in China. After initial success in big cities such as Beijing and Shanghai, Sephora in China is speeding up growth and is now focusing on second-tier cities. The French beauty retailer pulled out of the Japanese market in 2000s. Its crucial mistake there was too much emphasis on stocking fragrances, a category of minor importance in Japan compared to skin care. Sephora in China has learned from this and is focusing its product range more on skin care and color cosmetics. This makes far more sense given that these categories are currently far bigger than the fragrances sector in China.

Analysis of cosmetics market in China

Cosmetics products in China

Cosmetics products segmentation is influenced by culture and focused on skin care According to research by IBISWorld, skincare products are the largest segment among cosmetic products in China, accounting for 55.2% of industry revenue in 2018. Skincare products are used to clean and protect the skin, and keep skin healthy. Most women use skincare products, underpinning skincare’s dominance of the industry.

Hair care products are ranked second with a proportion of 18.8% in China’s cosmetics market. Moreover, in the skin care and hair care segments, male grooming products have been growing in popularity.

Cosmetics include makeup for the skin, eye makeup, lipsticks and nail care products. In 2018, less than 20% of Chinese people use cosmetics, while over 95%  of Western women use them daily. However, the number of cosmetics users is expected to increase remarkably in the following five years.

Fragrances include perfumes, colognes and floral water. This segment has experienced steady growth in recent years as more Chinese women have started using perfumes. Relatively few Chinese people use fragrances, as market research shows they do not prefer strong smells. Nevertheless, this segment is anticipated to grow in the future with the influence of globalization and cultural integration, and would grow further with the development of lighter scented perfume products that fit Chinese consumer preferences.

Other products include deodorants, depilatory (hair removal) products, and pilatory (hair growth) products, accounting for an estimated 5.3% of industry revenue in 2018.

[Data source: IBISWorld, ‘Products of the personal care market in China’]

Key players in China’s cosmetics market: Foreign brands in China’s cosmetics market are successful

Foreign brands dominate the cosmetics market in China while domestic brands are catching up quickly.  The competition of brands selling cosmetics in China is tightening as more domestic brands gain market share.

In 2018, foreign brands such as Procter & Gamble and L’Oréal accounted for approximately 50% of the market share in cosmetics industry in China. Although domestic firms in China Chicmax, Pechoin and JALA Group) occupied 17.97% of market share, with the development of quality and innovation of products made nationally, it is expected that the market share of domestic cosmetics-manufacturing firms will increase steadily in the future. Previously, their performances have proven that this statement is real. From 2014 to 2017, the market share of Pechoin increased from 1.4% to 2.3% while Chando increase from 1.3% to 1.7% and ranked at the fifth place in the China’s cosmetics industry.  

[Data source: qianzhan, ‘Market share of major players in China’s cosmetics industry’]

Consumer analysis of China’s cosmetics market

Consumer profile: Female-dominated, concentrated in eastern and southern China.

To some extent, consumers of cosmetics and personal care market in China are distinct from others. In terms of genders, Chinese female consumers have contributed most of the sales volume of the cosmetics market in China. According to Institute of Sina WRD Big Data, 64.35% of the users that follow the topic of cosmetics and personal care are female. More specifically, females aged 20-29 accounted for most of the sales transactions with the proportion of 36%, followed by the segment of females aged 30-39 with the proportion of 26%. As the segment of females aged 20-29 consumed the most in China’s cosmetics market, this can be explained by the fact of the rising anxiety of beauty and aging among them and their increasing affordability. In 2028, it is expected that the contribution of females aged 30-39 will outweigh that of females aged 20-29 and the sum of their contributions will be more than 50%.

[Data source: qianzhan & Research Institute of Orient Securities, ‘Age distribution of female cosmetics consumers in China’]

On the other hand, with the influence of K-Pop and J-pop, Chinese males are becoming aware of their appearance, which lead to rising consumption on male personal care products. From 2019 onwards, in the following 3 years, the sales growth rate of cosmetics products regarding male segment in China will reach 13.5% in comparison with 5.8% of the global rate.

In terms of geographic locations, the sales volume of the cosmetics and personal care market in China is mainly concentrated in the area of Pearl River Delta (Guangdong) and Yangtze River Delta (Jiangsu, Zhejiang, Shanghai). According to Institute of Sina WRD Big Data, users from these areas are most likely to follow and post relevant information regarding cosmetics and personal care on social media platform. Moreover, it is found that the cosmetics market in  provinces that are in northern east (i.e. Heilongjiang and Liaoning) and middle (i.e. Sichuan and Anhui) China has a potential business opportunity.

Consumer preferences: Craving for different functions of products, natural ingredients and top-grade brands

As consumers of cosmetics market in China become more familiar with the variety of products available, the consumer demand grows stronger for more specific items. Take skincare as an example, whitening, freckle removal, moisture and antioxidant are segments becoming more prevalent in Chinese consumers’ mind. When selling cosmetics in China, foreign brands often need to alter their product to match the unique beauty needs of Chinese consumers.

Apart from the function, consumers in China’s cosmetics market desire for cosmetics made from natural ingredients. Due to the frequent safety issue of items in China, consumers are more aware of safety of cosmetics. Products made from natural or herbal ingredients become popular with consumers in China. This has been proven by the rising performance of companies that focus on producing cosmetics with herbal ingredients. In 2018, the sales volume in this segment was 5.3 times than that of 5 years ago while the consumer base was 4.2 times than that of previous years. In the future, cosmetics with natural ingredients are projected to occupy more market share.

Lastly, influenced by the rising purchasing power, consumers of cosmetics market in China are switching to top-grade brands. This has been proven by the increasing market share of top-grade brands in China’s market.

[Data source: qianzhan & Research Institute of Orient Securities, ‘Example: market share of Lancôme and YSL in China’s cosmetics industry’]

Choosing the right E-commerce Platforms for selling cosmetics in China

Dominating e-commerce platforms: Tmall and JD

In 2016, Tmall and JD were the dominating channels with the market share of 60% and 33% respectively. Although other channels such as Suning and yhd.com had occupied certain market share, they were still pale in comparison with those of the main channels. Moreover, as for the types of online stores that were most popular with customers, online flagship stores listed on the platforms like Tmall and JD accounted for the largest market share with 45.4% of market share while proprietary sales of these platforms ranked at the second with 23.9% of market share. This reveals Chinese consumers preference for online shopping. That is, they are likely to shop at stores that are directly operated by cosmetics brands.

[Data source: chyxx, ‘Market share of online sales platforms in China’]

[Data source: chyxx, ‘Market share of types of online stores in China’s cosmetics market’]

Promotion platforms: TikTok and Xiaohongshu

With the development of online shopping channels, social media platforms have significant impact on the promotion channels and consumer behaviour. Xiaohongshu and TikTok become novel platforms for cosmetic firms to promote their products. For example, Proya, a domestic skincare firm released short videos on TikTok and invited influencers of Xiaohongshu to post their reviews after using the products. Posting related information on such platforms can reach target customers since most of the users are millennials. It turned out to be successful. The new product, Black Sea Salt Deep Purifying Bubble Spa Mask, has a remarkable performance with more than 1-million sale volumes every month.

[Photo source: NetEase, ‘Promoting on TikTok: Selling cosmetics in China’

[Photo source: jumeili, ‘Promotions of cosmetics on Xiaohongshu in China: Selling cosmetics in China’]

Promotions of China’s cosmetics products

Common marketing strategies: celebrity endorsements, crossover marketing and KOL marketing

Celebrity endorsement is a common strategy that cosmetics and personal care brands in China would utilize to promote their products. Companies in this sector are likely to hire KOLs or celebrities from China, especially males to endorse their products. In 2019, 24 cosmetics companies established collaboration with famous stars and hired them to be the brand ambassadors. There is couple of reasons to explain this trend. Firstly, the majority of fans are females and they are likely to make consumption on the products which are related to their idols. Secondly, male endorsement is able to create sensations, which can draw people’s attention.

 [Photo source: TOPMEN, ‘Junkai Wang, the male brand ambassador of Lancôme in China’]

Crossover marketing is a novel strategy in the cosmetics industry in China. Promoting multiple products from different industries is able to draw consumers’ attention and increase brand exposure among existing and potential consumers. Nowadays, since people are bombarded by novelties, it is necessary for a cosmetic firm to come up with sensational meanwhile effective promoting content in order to target consumers successfully, which will potentially lead to increase in revenues and profit. Quite a few cases have proven that this strategy is feasible. For example, in December 2018, the marketing campaign of “The Forbidden City & Cosmetics” was launched. It suddenly went viral among consumers. According to Weibo, the topic of “The Forbidden City & Cosmetics” reached 4,500,000 reads and discussed more than 4000 times.

[Photo source: iyiou, ‘The Fobidden City & Cosmetics’]

KOL marketing is also widely used by cosmetics and skincare brands in China. For example, Austin Li, a famous makeup influencer who is famous as “Brother Lipstick” on social media has successfully promoted multiple products. He has over 31 million followers on Tik Tok and has earned 100-million likes. On Xiaohongshu, there are 40-thousand articles related to him. Lots of cosmetics consumers refer to his comments on products as guideline prior to their shopping on cosmetics. Austin has proven to be an impressive KOL for brands selling cosmetics in China.

Photo source: Sina, Chinese influencer, Austin Li on social media platforms: Selling cosmetics in China

Regulations China’s cosmetics industry: Tax & hygiene supervision

For foreign cosmetics brands that want to enter China’s market, it is necessary to apply for safety certifications. Furthermore, taxes on imported goods are continuously adjusted and it is important for them to know the information of taxation as this can affect costs and revenue significantly.

In terms of import tax, according to the policy updated in 2018, for imported cosmetics, the Chinese government has decreased the taxation rate from 8.4% to 2.9% for the purpose of boosting international trade and satisfying domestic customers’ needs.

In terms of Chinese cosmetics industry’s safety standards, the regulations that strengthen hygiene supervision over cosmetics to safeguard consumers’ health are continuously updated. For example, according to IBISWorld, in 2012, the State Food and Drug Administration issued the Guideline for Rapid Detection Method of Health Food and Cosmetics to establish and complete the rapid detection method of health food and cosmetics. The security of cosmetics will be of increasing importance in the future. In July 2015, new regulations on technical specifications for safety of cosmetics were published, which are expected to reduce the occurrence of cosmetic safety incidents.

China cosmetics case study: L’Oreal in China

L’Oreal is an MNC based in France, that entered China’s cosmetics market in 1996. After 2 decades, the firm has become the major player with the largest market share in China’s cosmetics industry. Since 2016, their business in China has become the second largest income stream for the company. Owing to the dynamic strategy of L’Oreal which fits China’s market accordingly, it wins the heart of Chinese consumers.

A variety of products with different positioning

By acquiring brands specialized in different cosmetics areas, L’Oreal is able to diversify its business and gain profit from different streams. Meanwhile, L’Oreal is also able to position each of its brands in order to suit Chinese consumers’ needs. For example, shu uemura in China is positioned as luxury while 3CE and mg are positioned as mainstream consumer products. It is noticeable that shu uemura, 3CE and mg are brands based in East Asia and have already gained reputation among consumers in China prior to the acquisition. Many Chinese customers perceive that these brands are suitable for them as they tailor to Asian skin. Furthermore, after the acquisition, L’Oreal dedicates to amplify their advantages in order to maintain and expand its customers base. In addition to Asian brands, luxurious brands such as Lancôme, YSL and GIORGIO ARMANI have remarkable performances in China as the positioning and quality of products are in line with the expectation of customers in China. At the same time, by taking advantage of the current consumer’s preference in China, rising trend of purchasing with top-grade brands, it may enable L’Oreal to gain more profit.

Apart from the acquired brands, the home brand such as L’Oreal Paris has altered in order to tailor to China’s market. The company has established R&D centers in China and hired Chinese talents for the purpose of creating products which meet Chinese consumers’ needs.

[Photo source: L’Oreal, ‘Product segmentation of L’Oreal’]

Keep pace with the up-to-date sales channel and promotion strategy

E-commerce and KOL marketing are necessary promotion methods when selling cosmetics in China. L’Oreal, as a market leader, has always updated its distribution channel and promotions of cosmetics to keep up with the fast changing Chinese cosmetics market. For example, in 2016, the company officially set up its E-commerce department in China and standardized its online sales channel. This had proven to be effective. In 2017, the total sales volume of online selling achieved 2.1 billion Euros with the growth rate of 33.6%.

As for promotions, L’Oreal is notable for its Beauty Advisers (BA). Since the company has leveraged KOL marketing in China, in 2016, it launched the program which enabled BA to be influencers on social media platforms. The company collaborated with Tmall and trained 200 BAs to be influencers. Austin Li, who is mentioned in the previous section, is one of the trained BAs of L’Oreal. He has broadcasted 80 live shows on social media platforms for L’Oreal and potentially increased the revenues by 10 million RMB. What is more, L’Oreal is the pioneer of KOL marketing in the cosmetics and market in China.

[Photo source: Sohu, ‘E-commerce of L’Oreal in China’]

[Photo source: Sohu, Austin Li, the KOLs and beauty advisor of L’Oreal in China. KOLs are an important promotion channel when selling cosmetics in China]

Learn more about the cosmetics and personal care market in China

This article Selling Cosmetics in China: Analysis of the Cosmetics Market in China is the first one to appear on Daxue Consulting - Market Research China.

Venture capital are pouring money into its every hint of innovation, and not just in technology. Of the 72 IPOs to hit the market last year, 24 were Chinese.

Our Asia list, due out later this year, will incorporate those new metrics, include investors outside the Mainland and likely look quite different. It would be shocked, for instance, if Doll Capital Management (DCM)’s Ruby Lu does not debut in the top ten. Lu backed two Chinese companies that went public in the U.S. last year: Bitauto Holdings Ltd. and DangDang Inc. which soared 87% in its debut. She also sourced DCM’s investments in VanceInfo (NYSE: VIT) which went public in 2007 and now has a $1.38 billion market cap. DCM is now gearing up for the debut of China’s Facebook-clone Renren on the NYSE.

As more U.S. tech startups see China as an essential place to do business, increasing numbers of Chinese investors are funding them and helping them expand to the mainland. Chinese venture capital firms backed 28 U.S. companies in 2011, nearly double the number two years earlier, according to Dow Jones VentureSource. China’s growing wealth and the government’s desire to attract tech companies have set the stage for more deals, says Gavin Ni, founder of Zero2IPO Group, which advises venture capitalists in China.

Research China

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The most difficult problem for a fashion brand entering China is the choice of the Channel. China lacks the wholesale retail model. Instead, there are two key channels for the apparel and accessory brands to consider selling through: department stores and shopping malls. The other choice is to set-up a standalone store. Here you establish your own real estate deal allowing more control over the brands, sales and inventory. Demographic and consumer behavior is critical to understand with this channel and fierce competition means the brand has to perform or else it will be dropped.

Luxury brands sold either in franchised boutiques or upscale department stores. Due to the rapid growth of China’s middle class a new category has emerged, involving quality brands, both Chinese and foreign, being sold in department stores and specialty stores. Consumers in China’s middle class are increasingly sophisticated, demanding higher quality, variety and innovation from their retailers. The new category is highly fragmented and is dominated by specialty casual brands from Hong Kong, such as Esprit (514 outlets), Giordano (644 outlets), Baleno (980 outlets) and Glorious Sun (1,076 outlets). The new segment has significant growth potential as it is affordable to the middle class but positioned at a price point slightly higher than local brands. Prices in Clothing have dropped slightly in 2006. This is due to the increased competition in the fashion industry in China.

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China is the world’s second-largest market for luxury brands when counting purchases by Chinese consumers world-wide and is set to overtake Japan for No. 1 in a few years, according to consulting firm Bain & Co. Chinese sales of luxury products surged 20% to €9.2 billion ($12.1 billion) last year.

The decision by high-end brands to sell their handbags and clothing directly to Chinese shoppers via the Internet marks an attempt to push deeper into a nation with consumers eager to mark their new wealth by buying flashy labels.

Luxury goods have been available for several years on the Chinese Web. But that generally has been through middlemen who offer an array of brands, many of them out-of-season, rather than directly from the labels. Western sites are available to Chinese shoppers only to a limited degree, in part because not all company sites offer shipping to China. Also, steep Chinese import duties discourage buying from vendors’ overseas sites.

And Chinese shoppers have embraced the Internet. E-commerce sales in China jumped to 134.2 billion Yuan ($20.1 billion) in the third quarter, doubling from a year earlier, according to research firm Analysys International.

But many luxury brands are reluctant to sell through general retail websites for fear of poor quality control and consumer support. The labels also worry they will erode brand value by selling in an environment where consumers typically go to find deep discounts. China’s largest e-commerce site by number of transactions, Alibaba Group’s Taobao.com, says it drew $30 billion in transactions last year, largely by undercutting brick-and-mortar retailers on prices.

The opportunities e-commerce presents in China are too great to ignore. An estimated 80% of online shoppers are less than 45 years old, compared with 30% in the U.S., according to Forrester Research.

This article Start an Online Luxury Business in China is the first one to appear on Daxue Consulting - Market Research China.

So what does it take to start a coffee shop in China?

1. Vision:

A one-dimensional piecemeal approach can hardly work. One needs be able to envision a full scale of business strategy fulfilled with vivid consumers and products. It has already been the third decade since coffee house business started its momentum in China. There are enough lessons and insights about the market to construct some realistic and daring business concepts.

As one of the poorest countries, China is also one of the top three luxury markets in the world. When the market is crazy, one needs to humbly stick to market fundamentals especially for a general consumer goods. A grass root business strategy is the only way to popularize coffee and the only chance to grow this market.

2. To Whom:

Although coffee is not a mainstream drink, it has an unbeatable image known to almost everyone, which is the best marketing tool and conceptual image for a quick service restaurant (QSR) concept. 85oC is the most popular bakery chain which has stormed China’s market in the past several years. Its main categories are bakery goods. Nonetheless, it names its bakery after the best temperature for a good cup of coffee, 85oC.

Think hard on who your consumers are, how to segment them geographically and demographically, what and why they would buy, how much they can afford, and what distinguish your business from others.

3. Sell What:

Average coffee shop sells 15 cups of coffee per day. Coffee alone will not make this coffee business fly. It requires designing a matrix of the foods and beverages to offer to the consumers.

Thus, one has to consider food seriously as a major part of offering in a coffeehouse business. Coffee provides higher profit margin but food can attract consumers. Alice Foote MacDougall is an important figure in America’s early coffee business. She made her name in coffee roasting for 20 some years, but really made her fortune to start an early coffee shop chain. Her first breakthrough was to open a tiny twelve-by-sixteen-foot space in Grand Central Station in NYC when she sold waffle alone with coffee. She expanded the food section to be a full meal restaurant eventually. In her glorious days, she had 6 coffee houses serving six thousand people per day with a two millions gross revenues in 1920’s. Interesting enough, she has an aversion to food.

4. At What Price:

Coffee and coffee house business cannot be detached from the rest of the restaurant and consumer goods industries as happened in China now. It has to identify the referential consumer products in the market in order to make coffee comparable in price and in turn conceivable as an alternative drink to the subconscious mind of the consumers. In the developed coffee countries, coffee, tea, spring water, Coca Cola and all these mainstream beverages have comparable price. McDonald, Starbucks, Dunkin n’ Donuts, and 7-Eleven all have similar coffee price more or less.

It is important on how to price a line of your products to attract most of targeted consumers and to maximize your profit through coffee products. As a matter of fact, a cup of 12oz fresh coffee costs less than a bottle of 16 oz Coca Cola when that same cup of coffee sells five times higher than that bottle of Coca.

5. At Where:

The current coffee shop model renders coffee market has to open at the locations where have the densest foreign population and the highest average income, which means it also has the highest rental rate in China’s world-class high rental rate market. It is one of the key causes why so many coffee shops failed in their first half year.

Obviously it is not a complete list, but it’s a start.

This article Open a Coffee Shop in China is the first one to appear on Daxue Consulting - Market Research China.

Definition of Market Analysis

Market analysis is a type of business intelligence that supplies a large amount of data which is worth analyzing fully and intelligently. Having a good research analysis would give the enterprises a clear vision of China market.

Methods of Marketing Research Using by Chinese Consulting Companies

Consulting companies will then use multivariate statistical processes to interpret the results in more depth to serve their clients better. The following are the common multivariate statistical analysis that Chinese consulting companies use:

1. Regression analysis

Regression analysis studies the dependence of a single, interval scale variable (such as sales) on simple or multiple variables. Regression analysis can be used to predict or explain the value of one quantitative variable based on the value of another variable. It can also predict or explain the value of a quantitative variable based on the value of more than one other variable, and determine which of those other variables has the strongest influence on the variable being predicted.

2. Factor analysis

Factor analysis is an analytical tool that helps to reduce a large number of variables into a more manageable set. It does this based on correlations within the data by (i) identify the number of factors; (ii) define the factors as functions of the measured variables; (iii) analyze the factors which have been defined. The factors produced can show what judgment patterns lay behind people’s image evaluations of the products in China market research analysis.

3. Principal component analysis

4. Cluster analysis

Cluster Analysis uses several techniques to classify people, objects, or variables into more homogeneous groups. It can be used to identify market segments, develop typologies and find target markets in China market entry.

5. Discriminant analysis

Discriminant analysis examines how two or more groups of respondents differ from one another based on a few predictor variables. It is practical for (i) discovering variables (i.e., a discriminant function) which are the distinguishing factors, (ii) understanding differences among groups and (iii) forecasting market behavior based on demographic and psychographic variables.

6. Conjoint analysis

Conjoint analysis is used to evaluate preferences and tradeoffs that buyers are willing to make for their desired product. The techniques are thus effective tools for developing bundling of product or service offerings, optimizing product configurations, and diagnosing competitive strengths and weaknesses inthe service of China market entry.

7. Correspondence analysis

China market research frequently involves categorical data. This analysis could help answer the questions: who our customers are? who else our customers should be? what new products we should create? etc.

8. Multidimensional preference analysis

Consumers’ preferences for goods are based on various factors. However, these factors are not often defined in the China market. Thus, a multidimensional preference analysis will be able to analyze such data by using a data matrix whereby the columns represent consumers and the rows represent products.

9. Multidimensional scaling analysis

This method is used to find out what products are substitutes or complementary of one another.

10. Benchmarking analysis

The benchmarking analysis shows how performance leads to good positioning in China market as consumers increase the purchasing intentions.

Results of Market Analysis in China

Through statistical analysis and professional experience, Chinese consulting companies are able to perform comprehensive market assessment, which may include: Assessment of market supply and demand, Assessment of market competition, Overall efficiency of the industry, Strength and weakness analysis of the products, Opportunities and threats related to the industry, Assessment of market potentiality, Assessment of the overall market ability.

This article Market analysis in China is the first one to appear on Daxue Consulting - Market Research China.

With the explosion of internet, the so-called Internet Consulting is on the way expanding. Internet consulting is a broad term that is applied to the task of evaluating and developing strategies for businesses that wish to function on the Internet. The consulting may take the form of developing a retail interface and marketing strategy that functions in conjunction with a business with brick and mortar stores. Internet consulting may include the creation of a process to market business online.

The Job of Internet Consultants

Internet Consultants are specialists in business use of the internet and keep them self up to date with new and changed capabilities offered by the web. Ideally internet consultants also have practical experience and expertise in management skills such as strategic planning, change, projects, processes, training, team-working and customer satisfaction. Consultants may also assist in the creation of online sales tools that are used to support the efforts of agents or remote salespeople. Internet consulting may also apply to the selection of hardware and software components to assist a client in creating a general infrastructure that allows employees to access in house information, such as departmental newsletters or other communications.

In all its forms, Internet consulting is about analyzing the current status of the client’s online presence and assess what needs to be added, adapted, or replaced in order to help the client reach his or her goals for a web presence. The consultant normally begins the process by becoming acquainted with what the company produces in the way of goods and services. Assessing the current status of the customer’s online presence usually follows in short order.

Internet Consulting Companies in China

Nowadays more and more consulting companies begin to applying internet consulting in their business strategies. Big consulting companies such as BCG, Mckinsey are all using internet consulting as one of their consulting method now in China. Consulting companies focusing on small and medium business such as Daxue Consulting are also using internet consulting as a way of doing their business.

More on Consulting in china from Daxue Market Research China

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IT jobs in China

Influenced by the practice of Apple and Microsoft, the information technology companies in China develop very quickly recently. Information technology consulting is a field that focuses on advising businesses on how best to use IT to meet their business objectives. In addition to providing advice, IT consultancies often estimate, management, implement, deploy and administer IT systems on businesses’ behalf.

Differences between management consulting and IT consulting

Generally there is no clear difference between these two. IT consultants often have degrees in computer science, electronics, technology or management information systems while management consultants often have degrees in accounting, economics, industrial engineering, finance or a generalized MBA. It is said that IT consultants’ revenues come predominantly from design and planning based consulting with a mixture of IT and Business Consulting. Their value comes from their ability to integrate and support technologies as well as determining product and brands.

Prerequisites and IT Consulting Skills

Once the business owner defined the needs to have IT consulting for a newly developed project, the role of IT consultancy company is to support and nurture the company from the very beginning of the project till the end, and deliver the project not only in the scope, time and cost but also with complete customer satisfaction.

An IT Consultant needs to possess the following skills, advisory skills, technical skills, business skills, communication skills, management skills, advisory language skills, business and management language skills and technical language skills.

An article for China Consulting

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Market Overview on the Automotive Retail in China: Pangda Groupi, Yaxia Automobile and Grand Orient,  Zhejiang Material Industrial Zhongda Yuantong Group

With the accumulation of wealth among the rich in China, cars are now a daily necessity. Market model of distribution channel of car sale is analyzed in Chin. The future of the car retail channel is predicted. It is considered that the distribution channel should be developed towards car special sale, car embody market, car industry district and internet model of car sale. China’s large-scale automotive distributors are mainly concentrated in economically developed eastern, northern and southern regions, such as Pangda Group in Hebei, Yaxia Automobile in Anhui and Grand Orient in Wuxi, Jiangsu. Zhejiang Material Industrial Zhongda Yuantong Group Co.,Ltd., based on Zhejiang market, has established 4S stores beyond Zhejiang since 2011, in Guiyang, Chengdu and Xi’an for instance. Zheng Tong Group, based on Hubei, Hunan and Inner Mongolia markets, has extended its distribution network to Qingdao of Shandong, Nanchang of Jiangxi, and Shenzhen of Guangdong, etc. in 2011.

New Trend of Automotive Distribution Market: New Car Sales Dominate the Market

There is a new trend among all automotive distribution businesses in China. New car sales accounts for an overwhelming proportion, while used car and after sales service have an enormous space for development. For example, the largest automotive distributor in China, Pangda Group, the new car sales held over 93% of the total revenue in 2008 to 2010.

Distribution of Foreign Brand Cars in China: Mercedes-Benz

Benz has started a reform on distribution in China since the company achieved a 115 percent sales growth in 2010. Currently Benz has two distribution channels in the nation, one of which is Mercedes-Benz China, which mainly sells imported Benz cars while the other is Beijing Benz, which sells China-made cars. The two distribution channels cooperate in brand promotion and work independently in marketing. The manager of Benz hopes the new department could maximize cooperation and minimize divergence.

More on Retail in China (Shanghai, Beijing, Guangzhou) from Daxue Mystery Shopping China

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General Overview of the Electric Product Distributor in China

The rapid development of large chain-store operators such as GOME and Suning, has facilitated a dramatic increase in the level of industry concentration in recent years. In many large cities, such as Beijing and Shanghai, the industry concentration level is much higher, with major companies forming oligopolies. In recent years, mergers and acquisitions have become more frequent, which also substantially increased the industry concentration level.

Physical Store for Electric Products: Suning, Gome

There are two major electric retailers in mainland China now, Suning and Gome. The competition between them is fierce. Suning Appliance Company is one of he largest privately owned electrical appliance retailers in China, headquartered in Nanjing, Jiangsu. It has over 700 shops in Shanghai, Beijing, Guangzhou, Zhejiang, Anhui, Shaanxi, Fujian, Jiangsu, Hunan and Shanxi. It was listed on the Shenzhen Stock Exchange in 2004.

Gome Electrical Appliances Holding Limited is one of the largest privately-owned electrical appliance retailers in Mainland China and Hong Kong. It was founded by Wong Kwong Yu(Huang Guangyu), a Chinese businessman, in Beijing in 1987. It was listed on the Hong Kong Stock Exchange in 2004.

Online Retail: 360Buy.com, Amazon, Newegg

Newegg, 360Buy, Amazon are the major online retailers of electrics and electrical products. With the wide spread of world wide website, more and more trades are done on the internet. The electrics are one of the most important products sold on line in China nowadays. The goods sold on these website include mobile phones, TVs, Air conditionings. Founded in 2004 on a business model similar to that of Amazon.com Inc., 360buy sells a broad range of products, such as electronics to cosmetics. It forecast revenue of 10.2 billion yuan ($1.54 billion) this year, up from four billion yuan last year. Amazon is an American multinational electronic commerce company with headquarters in Seattle, Washington, United States. It is the world’s largest online retailer. It also produces consumer electronics, notably the Amazon Kindle e-book reader.

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This article Distribution of Electric Products in China is the first one to appear on Daxue Consulting - Market Research China.