(Source: https://pltfrm.com.cn)
Introduction
In China’s fast-moving retail environment, customer diversity demands precision in pricing. Brands that understand and adapt to different consumer expectations not only increase their market share but also optimize profitability. Let’s explore how overseas brands can deploy segmented pricing strategies to thrive across China’s fragmented yet booming marketplace.
1. Building Comprehensive Customer Profiles
1.1 Purchase Behavior Analysis
- Approach: Track transaction frequency, cart size, and product preferences to group customers into actionable profiles.
- Benefit: Allows brands to predict what price points and bundle offers will resonate best with each group.
1.2 Psychographic Segmentation
- Method: Go beyond demographics by analyzing values, lifestyle aspirations, and brand affinities.
- Impact: Enables emotional positioning of price offers, not just logical ones.
2. Tiered Offer Design Based on Segmentation
2.1 Entry-Level vs. Premium Tiers
- Tactic: Develop price tiers that cater to both aspirational buyers and luxury spenders.
- Result: Helps maximize revenue across different levels of purchasing power.
2.2 Occasion-Based Pricing
- Strategy: Offer special segmented deals for life stages (e.g., graduation gifts, family packages) to align with major personal events.
- Advantage: Builds deeper customer engagement through relevance.
3. Technological Enablers for Segmented Pricing
3.1 Dynamic Promotion Engines
- Execution: Use AI-driven engines that automatically serve discounts or bundles based on customer activity.
- Result: Maintains high relevance while reducing manual campaign design efforts.
3.2 Geo-Specific Pricing
- Plan: Adjust pricing slightly based on region (e.g., first-tier vs. third-tier cities) to match local purchasing power.
- Impact: Optimizes margins without alienating price-sensitive consumers.
4. Strategic Communication of Segmented Pricing
4.1 Tailored Campaign Messaging
- Approach: Craft campaign creatives that speak directly to each segment’s values, needs, and aspirations.
- Benefit: Improves emotional resonance and raises willingness to pay.
4.2 Platform-Specific Strategies
- Tactic: Adapt segmented pricing promotions differently across Tmall, JD.com, Douyin, and Xiaohongshu, leveraging each platform’s user behavior.
- Result: Increases effectiveness and ROI of segmented pricing efforts.
Case Study: A U.K. Fashion Brand’s Pricing Localization in China
A U.K.-based fashion brand segmented its customer base into first-tier city shoppers seeking luxury, and second/third-tier city shoppers valuing affordability. They adjusted their bundle offers, discounts, and loyalty rewards accordingly across Tmall and Douyin. Within one year, their Douyin store outpaced Tmall sales by 1.5X in tier-3 cities, proving the power of segmented pricing.
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!
