It’s been a little over a year since Whittard of Chelsea began trading in China on the Alibaba platform and MD Mark Dunhill’s next job is to oversee the development of the brand’s first physical stores in the region over the next 12 months.
The British heritage brand began trading in China on Alibaba’s Tmall Global platform in July 2016 after seeing more and more Chinese tourists visit Whittard of Chelsea stores while in the UK.
“Our decision to build a larger presence in China was driven by commercial common sense,” said Dunhill. “We have 50 stores in the UK in Cathedral tourist and university towns, as well as in London, and we observed a growing number of customers from Greater China by being able to track the growth in these purchases from those markets from the address of the credit cards they used.”
Dunhill said it became quite clear that the Chinese have an obsession for tea. “That trend is growing,” he said, describing how the retailer noticed how university students from China would buy Whittard of Chelsea products for gifts to take home at the holidays.
“We also conducted research that the Chinese customer is fascinated by British afternoon tea and they have a respect and trust for Englishness and our brands and products.”
While the Whittard of Chelsea brand had some awareness in China due to independent online sales, Dunhill said the retailer was keen to manage its brand directly, ensuring it could control the price and presentation.
“The decision to work with Alibaba as a first stage market entry to China was an obvious first step,” explained Dunhill. “And the work Alibaba has done to facilitate setting up a flagship store on Tmall, makes it a very straightforward and hassle-free process.”
Going local
Whittard of Chelsea experienced its first Singles Day on 11 November 2016 and Dunhill said the brand was “completely balled over”. And while the retailer had been planning for 11/11 for many months, it still sold out on a number of its best-selling products.
It has since worked with a local partner to improve its supply chain planning and last month, it opened a Tmall Local storefront online in China which enables the retailer to fulfil orders from inventory held in the region by its partners. Considering how Chinese customers are increasingly demanding when it comes to speedy delivery, this has been an important development to Whittard’s Chinese strategy. “The Tmall Local audience is many times bigger,” explained Dunhill. “And the local platform massively increases the available market for us.”
Physical stores
But the next step in the strategy is to open stores and tea bars in key Chinese cities, starting with Shanghai and Bejing in the next year.
“Tmall has given us the level of confidence to increase our investment in the market and the physical stores will drive more traffic to Tmall – so it’s a mutually supportive strategy.”
Now it is well on its way to conquering China, Whittard of Chelsea hopes expand its eCommerce presence in other markets such as the US, Japan, Russia, Eastern Europe, France, Germany and Italy.
“We’re seeing a great deal of demand from customers buying from our UK website for delivery overseas, and this is partly fuelled by the weakness of the pound,” explains Dunhill.
And will an impending exit from the Europe Union dampen these plans?
“On the contrary,” he said. “As long the pound makes it more attractive to European customers, I see nothing derailing that growth and demand. Unless as a result of Brexit negotiations there are punitive duties put in place, but that’s unlikely as it will be neither in interest with European partners or ourselves.”