(Source: https://pltfrm.com.cn)
Introduction
Chinese consumers are diverse in behavior, highly responsive to digital campaigns, and sensitive to pricing signals—especially during major ecommerce festivals. For overseas brands, relying on flat discount strategies is no longer sustainable. Instead, advanced demand curve pricing models enable precise, scenario-based pricing that maximizes either volume or profitability depending on real-time dynamics. In this article, we break down how to implement and refine a demand curve approach that drives performance across China’s leading retail platforms.
1. Segment Demand Curves by Platform and Product Tier
1.1 Platform-Specific Elasticity
Understand that Douyin, JD, and Tmall may each produce different curve shapes for the same product due to differing user bases, trust levels, and UI flows. Model each platform individually.
1.2 Premium vs. Mass Market Curve Profiles
Premium products tend to have flatter curves (less elasticity), while commoditized goods may see sharp volume changes with small price shifts. Segment curves based on category and tier.
2. Use Real-Time Inputs to Enhance Price Responsiveness
2.1 Behavior-Driven Curve Refinement
Leverage behavioral data—such as cart additions, price alerts, and time-to-purchase delays—to adjust demand curves dynamically as new campaigns roll out.
2.2 Region and Demographic Filters
Build demand curves for consumer subsets: e.g., Tier 1 cities vs. Tier 3, or Gen Z vs. Gen X. Pricing tolerance can vary widely between regions and age groups.
3. Apply Demand Curve Insights to Campaign Strategy
3.1 Forecast Price Points for Seasonal Events
Use your demand curves to simulate price-volume trade-offs ahead of 618, Double 11, or new product launches. Model different promotional tiers to find the best margin-to-revenue mix.
3.2 Align Influencer and Ad Spend With Price Sensitivity
When price elasticity is low, invest more in KOLs or ad impressions. When elasticity is high, run price-led campaigns and lower CAC through tactical discounts.
4. Measure Long-Term ROI From Curve-Based Pricing
4.1 Track Conversion Lift and Margin Recovery
Analyze whether curve-informed pricing strategies outperform historical fixed-price or flat discount approaches, especially over 60–90 day periods post-campaign.
4.2 Feed Retention and Repurchase Data Back Into the Model
Don’t stop at first purchase—track how initial pricing affects LTV, churn, and upsell opportunities. Refine future curves with this expanded data scope.
Case Study: Australian DTC Skincare Brand Boosts Gross Margin with Curve-Driven Pricing
An Australian skincare brand used demand curve modeling on Tmall Global to identify price points where sales would remain stable but margins would improve. They increased the price of top-selling SKUs by 8%, resulting in only a 3% drop in volume but a 19% gain in margin. The model was then scaled to Douyin and their mini program, achieving pricing consistency and profitability across three platforms.
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!
