(Source: https://pltfrm.com.cn)
Introduction
China’s e-commerce landscape is a battlefield of SKUs. With multiple product variants competing for consumer attention and margin pressure rising, overseas brands must adopt a structured, data-informed price matrix to remain agile and relevant. This article unpacks the core tactics that make multi-SKU pricing more affordable and effective in China—from logic-based segmentation to lifecycle planning.
1. SKU Categorization Based on Role and Contribution
1.1 Hero, Filler, and Entry SKUs
Segment SKUs by their function in the catalog: hero SKUs drive traffic, filler SKUs support bundling, and entry SKUs attract budget shoppers. Each group requires a unique pricing logic.
1.2 Contribution-Based Pricing
Use GMV and margin contribution to guide pricing for each SKU. This ensures pricing supports business goals—be it profit optimization or user acquisition.
2. Market-Specific Adjustments at the SKU Level
2.1 Tuning Prices by Region
Rather than blanket pricing across China, localize prices based on city tiers or province-level data. Coastal Tier 1 cities tolerate higher prices, while interior provinces lean toward value buys.
2.2 Platform-Driven Differentiation
Adjust pricing based on consumer behavior across platforms. JD shoppers may favor bundle discounts, while Douyin requires strong psychological pricing (e.g., ¥99.9) for impulse buys.
3. Dynamic Lifecycle Price Structuring
3.1 Launch and Maturity Phase Pricing
For new SKUs, start with an introductory price to gain momentum, then gradually increase based on performance. Mature SKUs can be bundled or discounted to extend shelf life.
3.2 End-of-Season Clearance Logic
Create pricing rules for end-of-season or expiring inventory. Automating markdowns at defined sell-through thresholds helps reduce dead stock and preserve cash flow.
4. Visualizing and Managing the Price Matrix
4.1 Price Grid Creation
Build a visual grid or matrix using spreadsheet tools or SaaS dashboards. Each row (SKU) and column (channel, region, lifecycle stage) creates a map for pricing decisions.
4.2 Synchronization Across Teams
Ensure marketing, operations, and e-commerce teams work off the same SKU matrix. Misaligned pricing often causes channel conflict or performance dips in campaigns.
Case Study: Nordic Cosmetics Brand Reshapes SKU Pricing for Taobao
A Nordic skincare brand launched in China with a 60-SKU catalog but applied flat pricing across platforms. Sales lagged and their Taobao conversion rate remained low. After consulting a local agency, they developed a SKU matrix based on product purpose and lifecycle. Hero products were bundled with filler SKUs at a modest discount, while underperforming SKUs were cleared through live-stream flash sales. The updated matrix improved conversion by 35% and boosted retention on core SKUs.
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!
