(Source: https://pltfrm.com.cn)
Introduction
Pricing in China’s e-commerce sector requires a sophisticated approach that balances local consumer behavior, market trends, and the competitive landscape. This article delves into actionable strategies to help international brands optimize their pricing models for success in China.
1. Psychological Pricing for Consumer Engagement
1.1 Charm Pricing for Lower Price Perception
Chinese consumers are highly sensitive to price cues, and using charm pricing, such as ending prices with “.99” or “.88,” can influence consumer perception. This pricing tactic makes products seem more affordable and appeals to the Chinese cultural preference for numbers considered “lucky” or “auspicious.”
1.2 Using Discounts and Limited-Time Offers
Discounting is a highly effective strategy in China’s e-commerce market, especially when tied to specific events or seasonal sales. Creating urgency through limited-time offers, especially during major shopping festivals like Double 11 or 618, encourages consumers to make purchases quickly, increasing sales volumes.
2. Subscription-Based Pricing Models
2.1 Building Long-Term Customer Loyalty
Subscription models, where customers pay a recurring fee for regular product delivery, are becoming increasingly popular in China. Offering subscription-based services can create long-term customer loyalty while providing a stable revenue stream. For example, a skincare brand can offer monthly skincare kits delivered directly to the customer’s door.
2.2 Flexible Subscription Plans for Different Budgets
To cater to varying budgets, it’s essential to offer flexible subscription plans. Whether it’s a basic package with fewer products or a premium one with exclusive items, tiered subscription models allow brands to reach a broader audience while maintaining steady engagement with customers.
3. Bundling and Cross-Promotions
3.1 Increasing Average Order Value
Product bundling is a popular strategy in China, where consumers are often motivated by the perceived value of buying multiple items together. For example, a health supplement brand might offer a bundle that includes vitamins, a dietary guide, and free shipping, encouraging customers to purchase more in one go.
3.2 Cross-Promotions with Complementary Products
Collaborating with complementary brands for cross-promotions can be highly effective. For example, a fashion brand can partner with a shoe brand to offer exclusive discounts or bundled deals. This increases sales while providing extra value to consumers.
4. Case Study: A Foreign Health Supplement Brand’s E-Commerce Strategy
A foreign health supplement brand saw success by implementing a subscription pricing model alongside cross-promotion and bundling. By offering a monthly subscription for regular deliveries and partnering with a fitness equipment brand, the company doubled its revenue within six months, with a noticeable increase in repeat customers.
Conclusion
By leveraging psychological pricing, subscription models, and bundling, international brands can maximize their revenue potential in China’s e-commerce sector. With the right strategies, brands can optimize their pricing models for sustained success in a competitive market.
PLTFRM is an international brand consulting agency that works with companies such as Red, TikTok, Tmall, Baidu, and other well-known Chinese internet e-commerce platforms. We have been working with Chile Cherries for many years, reaching Chinese consumers in depth through different platforms and realizing that Chile Cherries’ exports in China account for 97% of the total exports in Asia. Contact us, and we will help you find the best China e-commerce platform for you. Search PLTFRM for a free consultation!
