{"id":51375,"date":"2021-05-25T09:03:10","date_gmt":"2021-05-25T01:03:10","guid":{"rendered":"https:\/\/daxuestaging.wpengine.com\/?p=51282"},"modified":"2022-11-16T19:18:35","modified_gmt":"2022-11-16T11:18:35","slug":"direct-to-consumer-dtc-in-china","status":"publish","type":"post","link":"https:\/\/daxueconsulting.com\/direct-to-consumer-dtc-in-china\/","title":{"rendered":"How and why brands are using the direct to consumers business model (DTC) in China"},"content":{"rendered":"\n

Direct to consumers (DTC) is a business model when a manufacturer sells product directly to the end consumer, bypassing all intermediaries. It also includes a wide range of instruments which help to be closer to the consumers. DTC in China makes use of four types of social e-commerce, Pinduoduo<\/a> – social e-commerce, WeChat<\/a> \u2013 one of biggest app in China in terms of users, Douyin<\/a> and Weibo. Alternatively, many brands reach consumers directly by launching their own e-commerce site dedicated to selling their own products, this is known as brand.com or, in China, brand.cn. The DTC business model is a form method of brand independence<\/a>, a strategy which puts the destiny of brands in their own hands rather than third party players. <\/p>\n\n\n\n

The benefit of DTC is that it allows brands to maintain control over the sales process and build close relationships with customers. On the one hand, a DTC strategy allows businesses to increase profits and gain access to consumer information and the ability to optimize your brand. But on the other hand, it also complicates the operation, as it is necessary to create supply and delivery channels, as well as manage the return of goods.<\/p>\n\n\n\n

DTC is a new kind of consumer experience, which cannot be ignored by modern brands. Originally, DTC merchandise was a staple of small businesses, and now such global corporations like Airbnb or Nike use it. Nike<\/a>, for example, got 40% of their China revenue from DTC channels in 2019.<\/p>\n\n\n\n

DTC differs from e-commerce platforms.<\/h3>\n\n\n\n

On standard e-commerce platforms, the platform itself, not the brand, controls the customer-company relationship. That means brands usually do not have to deal with shipping and delivery \u2013 they let e-commerce platform to take care of this. However, it deprives brands from closer relations with consumers. Profitability on traditional e-commerce platforms often depends on highly specialized methods. Moreover, these sales channels need to continually optimize both paid and organic searches. Such problem is not acute for the DTC model. Having its own website for online selling will guarantee the deeper understanding of customers and the usage of marketing tools to attract them.<\/p>\n\n\n\n

Advantages of DTC in China at a glance<\/h3>\n\n\n\n