*George Chan, Simmons & Simmons (Beijing) Intellectual Property Agency Company Limited (China), will be the moderator and a speaker at “Bringing Your Business Online: The View from China” at INTA’s 2018 Asia-Pacific Conference: Looking Beyond Trademarks, October 11‒12, in Sydney, Australia.
China’s growing affluent middle class is keen on experiencing the quality of food, cosmetics, clothing, and other goods that they often associate with foreign brands. This has made China the fastest growing import market for foreign brands. In fact, in 2017, it was the largest trading partner for both New Zealand and Australia, accounting for 22 percent of exports from New Zealand and 33 percent of exports from Australia.
Therefore, it is not surprising that many foreign brand owners have made China a strategic partner in their international expansion plans. However, instead of adopting a traditional brick-and-mortar approach for entry into the Chinese market, many foreign brand owners have been jumping in by creating an online presence on the country’s various online sales platforms (OSPs). China is home to the world’s largest online retail market, with more than US $499 billion in transactions in 2017.
This strategy appears sound for a brand’s relevance and growth given that Chinese OSPs can offer foreign brands a retail platform without incurring the costs associated with brick-and mortar outlets. More importantly, the rate of online retail sales in China is soundly outpacing the growth of traditional brick-and-mortar sales and chipping away at their market share.
While retail sales of consumer goods in China grew by 10.20 percent year-on-year from 2016 to 2017 (to reach 36.63 trillion yuan (approximately US $5.69 trillion)), online retail sales grew by 32 percent for the same period and now account for almost 20 percent of all retail sales in China (at 7.18 trillion yuan (approximately US $1.12 trillion)). Based on current and previous growth rates, online retail sales are expected to account for more than 26 percent of all retail sales in China by 2020.
To date, there has been almost no commentary on how to create a proper online branding strategy that may serve as a foundation for a brand’s success in China. Conversely, this lack of commentary leaves many brand owners in the dark about the risks associated with the failure to address basic commercial and legal issues related to such a strategy.
At INTA’s 2018 Asia-Pacific Conference: Looking Beyond Trademarks, in Sydney, Australia, in October, the panel session entitled “Bringing Your Business Online: The View from China” will be the first of its kind in discussing the law and commercial realities associated with bringing a foreign brand online in China.
Speakers will explore critical topics that include: Should you set up an online store or use a third-party retailer? What is the impact of an online presence on a business’s trademark filing strategy and protection efforts? How can Daigou channels positively or negatively affect brand reputation and business development?
For brand owners, answers to these questions—and others—will offer enormous insight into capitalizing on this online retail trend.