When most intrepid online retailers based in the UK or Ireland think of expanding their operations, they most likely think of branching out within Europe, perhaps selling to Spain or Germany.
Felim Meade of Emerald Green Baby, decided to take a slightly different route. He started selling high-quality Irish mother and baby products from household name brands like Water Wipes, Ovelle(Elave), Seavite, Kinvara, Clevamama, SMA/Aptamil, Cow & Gate online to consumers in China, having never before sold online in Ireland or the UK.
We sat down with Felim to chat about setting up Emerald Green Baby, the challenges of breaking into the Chinese market, and the lessons he learnt along the way.
Where it all began
Emerald Green Baby delivers Irish mother and baby products directly to customers in Hong Kong and China. The idea for the business came about when Felim was on a trade mission to Taiwan with Retail Excellence Ireland in 2013.
On the way back, the delegates stopped in Hong Kong and began talking to Hong Kong merchants about the retail landscape. They subsequently learned that there was a huge influx of people from mainland China coming into Hong Kong looking for certain products; including baby food.
A little research uncovered that Ireland was, at the time, the third biggest producer of baby milk in the world. Today, in fact, it’s catapulted to become the second biggest producer worldwide.
China: The Perfect Match
What better market to capitalise on this demand than China, the largest and the fastest growing market for baby milk in the world. Food safety concerns and counterfeiting scandals have created demand for Irish-sourced baby products, which reach the highest food and production safety standards in the world.
Felim Meade, Director at Emerald Green Baby, said, “During our trade mission in 2013, we discovered that huge numbers of Chinese people were coming over the border to Hong Kong to stock up on baby food, which meant that as a result Hong Kong residents were running out.
There was a massive opportunity to supply this from Ireland. That’s really where the idea came from.” However, the idea took a back seat for 9 months and it was the following September when Felim and his business partner Brian Goff, set about getting Emerald Green Baby up and running.
Choosing the Right Shopping Cart
Knowing very little about running an eCommerce business meant a very steep learning curve ahead of them. One of the first decisions they had to make was what eCommerce platform to choose. They looked at lots of different options and examined websites they thought would fit their business before settling on Magento because of its natural eCommerce affinity.
“We liked that it had so many extensions- there was a plug-in for everything we needed including promotions and discounts, and it was so easy to integrate”
They had a one month crash course, learning everything they could about Magento; factoring in the security of the website and how they would accept payments in Hong Kong, Not to mention China where they don’t use credit cards online at all.
Getting up and running was a learning curve: “One of the mistakes we made early on was doing too many off the shelf customisations on the site. For instance, we didn’t set a base currency which caused issues when converting from Hong Kong dollars into euro- there was no way to round neatly. A year after setting up the business, we rebuilt our website from the bottom up. This time using Magento plug ins and went on a base currency of euros – this allows us to easily sell in hundreds of currencies that we want.”
Shipping the Goods Internationally
Shipping was another major consideration. During the three month set up period, they spoke to shipping experts and managed to build a piece of software that allowed Magento to link in with their shipping company.
“At the end of each day – we would take an export out of our Magento website to a CSV file – import it into the shipping software and all of the information from our website –name, address, and telephone number-automatically came across onto the shipping manifest, and we could print that.”
Emerald Green Baby are able to offer incredibly quick delivery with orders typically arriving within 48 hours of being ordered.
Complying with Local Laws
Selling into China in particular means that Emerald Green Baby have to comply with very strict regulations. Selling direct to consumers means there are restrictions when it comes to how many units of baby formula a domestic customer can buy a month. Emerald Green Baby restricts the orders to a limit of six tins which lasts customers on average about 30 days.
Accepting Local and Alternative Payment Methods
Another business challenge facing the company was how to accept local payments. As people in China don’t use credit cards to pay online, they had to integrate Alipay into their website. Alipay is the main online payment solution China with an estimated 450 million active users, processing an average of 80 million transactions per day. Alipay charges no transaction fees and customers must indicate that they are satisfied with the quality of goods or services received before payment is processed.
In addition to accepting payments through Alipay, Felim also set Emerald Green Baby up on Taobao, an online marketplace on China similar to eBay, Amazon or Etsy, operated by eCommerce giant Alibaba. This gave them access to an invaluable platform to target and sell their products directly to Chinese consumers.
While to Felim, this was an obvious step to take if they wanted to conquer the Chinese market, it was a road that had never been taken before by an Irish or UK company which adds its own unique set of challenges.
Marketing in China
When we think of marketing online businesses here, we imagine using Facebook, Twitter, Pinterest, and Google ads to advertise and reach wider audiences but none of these tools exist in China. To get the Emerald Green Baby name out there, they had to navigate Chinese social media sites. They set profiles up and became active on social media sites like Baidu, WeChat, YouKu and Weibo which are infinitely popular in China. Every Asian person uses WeChat for their emails and communication, even using it to buy online. In addition to their social media marketing, they also reached out to contacts here in Ireland and began to grow their contact base in China and Hong Kong.
The Future for Emerald Green Baby
Success hasn’t happened overnight for Emerald Green Baby, it’s been a slow and steady process. However, in the next 12 months they predict a massive growth rate as the groundwork they’ve put in begins to pay off and they spread their wings and begin to sell B2B as well as B2C. All while expanding their range to sell a lot more high quality Irish brands.
“China is where it is at for online retail, it is well ahead of the rest of the world for eCommerce in general and they are leading a seismic shift away from physical stores. Chinese shoppers spent ¥1.3 trillion last year alone online – even a minimal percentage of that market is a massive opportunity for our business today, not to mention the growth projections for China in the future.”
How does Realex help?
Realex Payments provides an online payment solution to Emerald Green Baby, with powerful security features which are integral to Emerald Green Baby’s continued success.
“Dealing with China, we needed to be 100% confident that we weren’t leaving ourselves open to scams or fraudulent transactions. Being based in Ireland we couldn’t afford to lose shipments or resend them if they went missing. With the security parameters Realex offers – fraud checks are done automatically and we know when to question an order and when to reject it. In 2 years of selling to China, we’ve never once had a chargeback…and I think that’s saying something.”