(Source: https://pltfrm.com.cn)
Introduction
For overseas brands entering China, managing prices across multiple SKUs can feel like navigating a maze. With varied customer expectations, regional purchasing power, and product-specific demand, a one-size-fits-all approach simply won’t cut it. In this article, we explore how strategic multi-SKU price matrix planning helps brands localize efficiently, stay competitive, and drive revenue at scale in the Chinese market.
1. Segmenting SKUs Based on Value Perception
1.1 Identify Core vs. Peripheral SKUs
Not all SKUs drive the same value. Flag high-traffic hero products and separate them from accessories or low-volume items to avoid applying flat discount strategies across the board.
1.2 Tiered Strategy by Product Type
Apply differentiated pricing to high-margin vs. commoditized SKUs. Premium goods can sustain a higher mark-up, while fast-moving SKUs benefit from aggressive pricing to drive volume.
2. Regional and Channel-Based Differentiation
2.1 Adapting to Tiered City Preferences
Consumer purchasing power varies widely across China. Pricing matrices should reflect this—with higher pricing thresholds in Tier 1 cities and more price-sensitive approaches in Tier 3–4 markets.
2.2 Align with Channel Economics
Products listed on Tmall vs. Pinduoduo may need distinct pricing strategies due to differences in platform fees, buyer behavior, and promotional formats.
3. Monitoring Inventory and Lifecycle Status
3.1 Phase-Based Pricing
New arrivals, seasonal items, and aging inventory should all follow a unique pricing logic. Use a lifecycle grid to adjust prices dynamically based on SKU age and turnover rate.
3.2 Preventing Margin Erosion
Avoid blanket discounts that hurt your high-performing SKUs. SKU-specific planning prevents unnecessary markdowns on products that don’t require a price drop to convert.
4. Systemizing SKU Pricing Through Tools
4.1 Centralized Matrix Management
Use ERP or pricing tools to develop a SKU pricing matrix that aligns inventory data, performance metrics, and market inputs into a single dashboard for easier updates.
4.2 Scenario Planning
Build models that forecast pricing impact by adjusting one variable at a time (e.g., cost, demand, channel margin). This allows informed SKU-level pricing tweaks.
Case Study: Australian Health Brand Streamlines 80-SKU Pricing in China
An Australian vitamin brand entered the Chinese market with over 80 SKUs across wellness, immunity, and children’s health. Initial pricing was flat, which led to underperforming bundles and overstock on low-turnover items. After mapping a SKU-based pricing matrix by demand elasticity and lifecycle, they introduced tiered pricing per category and platform. This change lifted their average order value by 22% and reduced inventory holding costs by 30% within one quarter.
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!
