Acceleration Partners’ Publisher Spotlight is an ongoing series where members of our Publisher Development team shine a light on innovative publishers from across the world.
This month, Cassandra Scarbeck, Publisher Development Manager at Acceleration Partners (AP), chatted with Rick Parada, Managing Director of RebatesMe.
Tell us about how you got involved with the Chinese market.
The first part of my career was on the tech side of the comparison-shopping business for BizRate and Smarter.com, dealing with data centers, networking gear, servers, storage devices and waking up at 2am to network outages. I first got acquainted with the Chinese market in 2006 when I worked for Smarter.com, CouponMountain and MoreRebates for Harry Tsao and Talmadge O’Neill.
Harry was Taiwanese and his mother lived in Shanghai. We set up a huge tech center of 200 employees in Shanghai, which meant I had to go to China around four times a year. During those trips, there was a language barrier between me and many employees, something I wasn’t accustomed to. It was a challenging situation, but it quickly taught me how to adapt.
Once the company sold to Valueclick, I invested in Extrabux, a cash back site started by two kids, Jeff Nobbs, and Noah Auerhahn, who won the business plan competition at the University of Southern California.
Extrabux’s traffic grew exponentially from China through a random set of circumstances that was fueling cross-border consumption. The high cashback rates at Extrabux helped to make us known in China as the place to stop before shopping overseas.
Jeff and Noah needed someone to open the office in Shanghai and be the General Manager and convinced me to make the move overseas. We went on to become the first Wholly Foreign-Owned Enterprise (WFOE) cash back company in China and had a small local staff of thirty.
How has your experience helped you create successful partnerships with advertisers?
In my GM role, I was fortunate enough to visit companies that, today, are household names, like Alibaba and Sina. To better understand the cultural nuances of the market, I would randomly take groups of our Chinese power users to dinner to pick their brains for useful intel.
While in Shanghai, I met the current founder I work for now, Daniel Dai, who ran the cross-border business for PayPal China.
In my experience, I’ve discovered that the best way to learn about China and Chinese consumer habits is to ask lots and lots of questions and learn through trial and error… the learning never stops! All of these experiences have helped me to broaden my affiliate knowledge, especially when it comes to helping brands navigate the Chinese market.
What are the biggest differences in online shopping behavior between Americans, Chinese expats living in the US and mainland Chinese?
The biggest difference between American shoppers and Chinese expats in the US is that brand recognition plays a much larger role in driving sales to Chinese shoppers than it does to Americans.
Even though Chinese expats have a high disposable income, they are a lot more receptive to deals than the average American shopper. Mainland Chinese shoppers will also expect a good deal online. I’ve also noticed those who do not have high disposable incomes in China will save to buy a nice well-known brand item.
At the end of the day, many consumers have the same product quality desires, regardless of location. Chinese women want safe and reliable products for their children. They want beauty products that will help them to look youthful. I mean, who doesn’t want to look youthful?
What motivates them to make a purchase and what products and services are they looking for?
I think where I see a difference in consumer habits is the exploratory stage. Chinese consumers will do a lot more homework when they are researching a brand. Chinese consumers also love product images. You will usually see a lot more images for a product on a Chinese shopping site than you would an American site.
Additionally, Chinese consumers love to share their shopping experience through unboxing on social media and enjoy sharing their insights to help other consumers when they have questions. Continuing with the trend to assist consumers, customer support is usually pretty fast and instantaneous in China. And don’t get me started on mobile shopping and same day shipping. They are five years ahead of the US in that area.
For advertisers that do not have a physical presence in China, how can a partnership with RebatesMe and some of the other players in the space help drive incremental sales for their brand?
The Chinese market is by far the biggest opportunity for advertisers today. It’s 400 million strong middle class has an insatiable desire for foreign goods. We always say a simple way to test the waters in China for an advertiser is to partner with the Chinese publisher base here in the US.
Some of those major players include Dealmoon, 55Haitao, SMZDM, Extrabux, Mifanli and of course RebatesMe. These core publishers can provide enough insight into how your brand is received by the Chinese consumer and what you need to improve. They can get you acquainted with Chinese social media (Weibo & WeChat) and certain key shopping days in China, like Singles Day, Chinese Valentine’s Day and Double 12.
Some brands that are very successful in China don’t have a physical presence there – brands like iHerb, The Hut Group, Ashford and Forzieri. So, it is possible to enter the market without physically breaking ground in China. However, I’m sure many of these brands will tell you it was a lot of learning, adapting and asking a lot of questions!
I’ve had the opportunity to work at a number of these Chinese publishers, and one thing I’ve seen across all of them is a consistently high Average Order Value (AOV), usually 2-3x the average.
This stems from two key factors. Often this is due to someone buying on behalf of family or friends since the majority of Chinese consumers don’t have the necessary credit card to buy overseas. Therefore, it’s important to not confuse this with reseller activity.
The other factor is buying additional items to take advantage of a steeper shipping discount to China. Since all the user’s packages get consolidated at the freight forwarder, the heavier the package the bigger the discount.
Any caveats to consider?
One of the major pain points for Chinese consumers is payment. Most Chinese customers do not have a Visa or MasterCard and, when they do have a Visa / MasterCard, a lot of times their orders overseas are flagged as highly suspicious.
Most payment carts use antiquated logic and don’t account for the new rise in cross-border consumption. Therefore, you have a lot of orders classified as fraud when international credit cards are used.
It’s a very simple process to include a Chinese payment provider like Alipay to your check out cart, or inquire services like Citcon, an all-in-one payment solution provider of Alipay, UnionPay and WeChat Pay.
What’s on the roadmap for growing RebatesMe this year?
RebatesMe is looking to ramp up our efforts overseas. Recently, our Chinese user base in the UK and throughout Europe has been growing rapidly. We are looking to work with new merchants in those areas.
High street and luxury brands who were once afraid to try loyalty are now realizing it’s a great way to engage a new user base like the Chinese demographic. Especially one that understands how cashback works and have come to expect it even on high-value items.
What is your advice to advertisers that want to partner with RebatesMe and what key factors contribute to your most successful partnerships?
Partnering with us is as easy as pushing out an offer. Our editorial team and account managers will take it from there.
The categories that tend to do well for Chinese consumers are luxury, fashion, beauty, maternal, health & supplements, travel, footwear, apparel, accessories, and electronics.
I find that the advertisers that have our ears are the ones who are in constant communication with us. They participate in our events and are willing to try our suggestions. They also sometimes have a person on staff who can read and write Chinese. I’ve found from my experience that if you can communicate in Chinese directly to any of the Chinese publishers I’ve mentioned, you will have a much more successful partnership.