Market Entry: A Case Study
We assist brands with entire market entry to China - read about our experience.
Graccioza, a luxury bath linens brand based in Portugal, has carved its niche in 100 markets globally, with a noteworthy presence in prestigious department stores like Bloomingdales and Harrods. Eyeing strategic expansion, Graccioza has now turned its attention towards China.
Decision to Establish a Local Subsidiary
In an effort to maintain absolute control over local operations, the management made a calculated decision to open a fully-owned subsidiary in China. Such an approach allows Graccioza not only to govern the decision-making process, financial control, and overall business management, but also to customize its strategies and operations to effectively cater to the Chinese market dynamics. This strategy contrasts starkly with operating via a distributor, where control over activities is significantly limited.
Partnering with Shanghai Jungle
Given Graccioza's size and unfamiliarity with the Chinese market, the brand sought a partner capable of registering, controlling, and staffing the local subsidiary. They needed a collaborator with ample experience in China's complex business landscape. At this point, Shanghai Jungle became an integral part of Graccioza's Chinese journey.
The Benefits: Direct Market Access and Enhanced Control
By establishing a local subsidiary, Graccioza paves the way for direct access to distribution channels and retailers in China, fostering a physical presence in the market. This strategy facilitates relationship building with key stakeholders, thus ensuring efficient product distribution. Moreover, it empowers Graccioza to tailor its offerings to the market. In the arena of intellectual property rights and brand protection, the local subsidiary approach offers an added layer of control, fortifying the brand's stance in the Chinese market.
Registering and Establishing the Local Subsidiary
Shanghai Jungle guided Graccioza through the process of registering a Wholly Foreign-Owned Enterprise (WFOE), culminating in the successful establishment of their local subsidiary in Shanghai in fall 2021. Following the company's registration, Shanghai Jungle undertook a series of necessary administrative tasks, including setting up a company bank account, securing an import license, and registering the company in the local tax system, to name a few.
Importing Products
With the company registered, we located a suitable warehouse and coordinated the import of products from Portugal. This process entailed the declaration of goods, tax payments, and additional administrative tasks, all handled by our team.
Hiring New Staff
Understanding Graccioza's interest in catering to both online and offline sales channels, given their target audience, we adopted a dual strategy. To bolster this approach, we brought on board a dedicated Chinese sales representative, who works solely on Graccioza's portfolio. He operates from the Shanghai Jungle offices under our supervision, working hand in hand with the rest of our team.
Collaborative Setup for Rapid Growth
Our close-knit arrangement creates an environment conducive to knowledge exchange between our Shanghai Jungle team and Graccioza's China office. This setup effectively accelerates the company's growth by utilizing the combined experience and insights from both teams. In addition, we manage the Graccioza team directly, a critical component of the operation that would be challenging to accomplish remotely from Portugal. This on-site management ensures a seamless flow of operations and an immediate response to evolving market dynamics.
Brand Localization and Trademark Registration
Simultaneously, we undertook the task of brand localization by crafting an appropriate Chinese name that resonates with the target audience. We then proceeded to register both the English and Chinese trademarks at the China Trademark Office. The registration was meticulously done under the requisite categories, ensuring the shareholder company retained ownership rights. This attention to detail in the early stages sets the foundation for brand recognition and protection within the Chinese market.
Digital Presence and Content Creation
Once we successfully tackled the trademark and naming necessities, we moved to create Graccioza's digital footprint in the Chinese market. Registration of social media accounts on major platforms such as WeChat, RED, and Douyin, as well as on other supporting channels, was initiated to boost brand communication.
Simultaneously, we established flagship stores on key e-commerce platforms like Tmall, RED, and Douyin, which also included the development of a WeChat shop.
Meanwhile, our dedicated team of content specialists was hard at work crafting engaging and visually appealing content, aligning with the luxury aesthetic of Graccioza. This dual-pronged approach ensured that while our efforts in creating a robust digital presence were underway, a consistent and high-quality stream of content was being readied for publication.
Influencer Marketing and Online Sales Launch
In alignment with China's fast-evolving digital marketing landscape, we initiated the online sales journey with a series of strategic Key Opinion Leader (KOL) campaigns. This was complemented by a mix of paid promotions across all digital platforms, thus ensuring comprehensive coverage of Graccioza's target demographic.
However, the KOL industry, while growing fast, is also known to be fraught with fraudulent practices – fake views, inflated engagement rates, and more. We employed a meticulous vetting process for potential KOL collaborations, which involves extensive data analysis of the bloggers' performance and audience engagement to ensure tangible results.
Prioritizing Sales Power over Surface Appeal
Furthermore, in consideration of Graccioza's position as a luxury brand, we place significant emphasis on identifying KOLs who not only promise substantial reach but also possess the capability to convert impressions into sales. Such strategic selection assures an alignment of values and aesthetics between Graccioza and its chosen influencers, thus creating an authentic and impactful narrative for its audience.
Adapting to the Chinese Market
Aiding offline sales required a localized approach. We responded by developing bespoke sales materials exclusively for the Chinese market. Our offerings included upscale gift boxes, custom shopping bags, branded thank-you cards, and discount coupons, among other items. At Shanghai Jungle, we supervised the entire production process, ensuring the quality was top-notch.
After a year of collaboration, we gained valuable insights into the local market, which propelled us to take our customization a step further. We introduced a unique product line tailored to Chinese preferences, which included thinner towels in fresh colors and bath rugs with novel patterns exclusive to this market.
Strengthening Graccioza’s Presence Through Offline Sales
Offline sales hold significant value for Graccioza's brand visibility and growth. Our dedicated sales team consistently interacts with a diverse range of industry prospects, including retailers, design companies, and hotels among others. The approach varies with the nature of the partnership; while some relationships revolve around straightforward order-sales transactions, others evolve into strategic collaborations based on their profile and potential impact on the brand. This multi-faceted sales strategy ensures Graccioza's robust presence across various channels and helps us forge mutually beneficial partnerships in the Chinese market.
Tailored Retail Display Solutions
Given that Graccioza operates in the B2C market, it's crucial to showcase their products in a manner that enhances their appeal. To address this, we collaborated closely with the Portugal team to develop custom display solutions for retail customers, ensuring their products were presented in the most attractive and compelling way possible.
Active Engagement in Trade Exhibitions
To strengthen offline sales and introduce Graccioza to a broader market and B2B audience, we have actively participated in several design exhibitions. Our role at Shanghai Jungle included orchestrating the creation of an exclusive booth.
Comprehensive Business Management
Today, Graccioza's products can be found both online and offline across major Chinese cities such as Shanghai, Shenzhen, and Beijing. From major retail stores to various design channels, the brand's presence is growing.
We have the privilege of overseeing all of Graccioza's operations in China. This includes managing all online sales platforms, directing online marketing ad sales, and managing offline sales. Furthermore, we are the primary point of communication with all local partners, ensuring smooth operations and a seamless brand experience.
Aiming High
Bear in mind, orchestrating a project of this scale is akin to preparing for a marathon, not a sprint. It involves going the distance, which in business terms, translates to a multi-year commitment. And like any marathoner, we've laced up, ready for that long, rewarding run. We're in it for the haul, committed to serving as Graccioza's dedicated pacesetter, pacing each stride on this expansive journey, every step of the way.
“Marek and his team have done so much amazing work for us in China.”
— Ricardo Relvas, CEO at Graccioza