WPIC Helps Consumer Brands Capitalize on China’s COVID-Fueled E-Commerce Boom
By Jacob Cooke
Like other AmCham China member companies, the onset of the COVID-19 pandemic created enormous uncertainty for WPIC Marketing + Technologies in the first months of 2020. WPIC’s Co-founder and CEO Jacob Cooke shares how WPIC assisted their clients in navigating the fallout from COVID-19 and helped them flourish in the aftermath.
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Following the outbreak of COVID-19, the viability of our business—helping global consumer brands activate and grow on China’s e-commerce platforms—seemed to be in jeopardy. If nationwide lockdown restrictions stayed in place, would China’s remarkable consumption growth over the preceding decade continue? Would brands invest in entering China or expanding in the market?
As the coronavirus spread within China and beyond, we were also extremely concerned about the health and safety of our employees and their families. Meanwhile, we had to adjust core business practices on the fly, such as office-based work and the regular trips I and other executives would take between our offices in China, Canada, and Japan, and to meet with our brand partners around the world.
But as the pandemic situation in China stabilized in March, our leadership team determined that we had a unique set of capabilities to not only ride out choppy economic waters, but to provide essential support for consumer brands around the world that were suffering hardship from pandemic-related restrictions.
With this realization, we undertook a series of steps and strategic investments that have helped us to grow substantially over the last two and a half years
“We had to adjust core business practices on the fly, such as office-based work and the regular trips I and other executives would take.”
Jacob Cooke is the Co-Founder and CEO of WPIC Marketing + Technologies, a leading e-commerce and technology consultancy that drives growth for global brands in China, Japan, and Southeast Asia.
As CEO, Cooke is the driving force behind WPIC’s world class data, e-commerce services, and artificial intelligence technology. Under his leadership, the firm has built out an expansive solution set covering data analytics, e-commerce activations and store management, brand strategy, creative campaigns, merchandising, warehousing, 3PL integrations, and more.
Cooke has lived in Beijing since 2003 and is a regular contributor to Bloomberg on e-commerce, retail, and technology trends in China. He is a member of the MIT Sloan School of Management and holds an Advanced Certificate in Engineering from MIT’s Computer Science & Artificial Intelligence Laboratory. He speaks Mandarin and Japanese.
Photo courtesy of WPIC
Accelerating the Shift to Online Retail
In the first months of 2020, the majority of China’s population had to live with some variation of social distancing measures, which led people to work from home, limit in-person gatherings, and refrain from shopping at brick-and-mortar stores. As an e-commerce company, we observed that these measures prompted more consumers to shop online for the first time. People were also buying a wider range of goods online, mostly out of necessity—for example, appliances and food began to be bought and sold online more commonly than before.
We were confident that this trend would prove sticky—that the shift online would be permanent as first-time users embraced the general convenience of China’s world-class e-commerce ecosystem, and as consumers realized the benefits of shopping online for a wider range of their desired goods. But economic pressure was still hurting overall consumption, so the near-term prospects for our business were still murky.
However, by the spring, China succeeded at flattening the curve. The country lifted lockdown restrictions and passed measures to encourage people to spend. As we anticipated, consumers did not flock back to brick-and-mortar stores. Due in part to lingering concerns about COVID-19 exposure, e-commerce continued to experience rapid growth throughout 2020 in China. By the end of 2020, retail sales of consumer goods for the year were down 3.9% from the previous year, largely due to the economic effects of the early restrictions. But despite overall consumption decreasing, online retail grew by 10.9% from the previous year, with online retail of physical goods growing by 14.8%.
However, as the spring of 2020 progressed, the situation outside of China became more and more troubling. In addition to the terrible health impacts of COVID-19’s spread, hundreds of millions of people around the world faced economic insecurity from restrictions. Consumers in major markets in North America, Europe, and APAC were hesitant to splurge on goods and services, while restrictions shuttered brick-and-mortar stores indefinitely. Some retail shifted online, but unlike in China, e-commerce infrastructure in most markets was unable to fully capture the previous demand at brick-and-mortar stores. Even despite rapid rates of adoption, e-commerce penetration never rose to the same level in other markets as it did in China.
Consumer brands were in a tenuous position, facing depressed sales and excess inventory sitting idly on shuttered store shelves, on docks, or stowed away in warehouses.
With this fast-moving macro landscape, at WPIC we realized that we were in a unique position to provide relief to consumer brands. We draw on our wide solution set—encompassing market intelligence, e-commerce activations and store management, brand strategy, creative campaigns, merchandising, warehousing, 3PL integrations, custom software development, and more—to service clients in a tailored fashion. With this wide solution set, we can also act as a full-fledged market manager, executing the entire market entry process and subsequent online store operations for a brand.
In March 2020, we unveiled a special offering that we dubbed the “China E-Commerce Accelerator Program”. We designed the program so that global brands suffering from halted business due to COVID-19 restrictions could quickly activate on China’s e-commerce platforms and sell to Chinese consumers.
The accelerator program had several components. We negotiated with our partners at Alibaba-owned Tmall and JD.com to secure rapid approval for store activations, reducing the standard application procedure from weeks to days. The accelerator program also included an expedited DiscriptoTM data program to promptly identify the best merchandising strategy, and inform on the most optimal tactics for each brand, depending on their product category. One of our business services is based on our proprietary DiscriptoTM software, through which we provide clients ranging from mid-sized brands to large multinational companies granular market intelligence reports.
We added capacity to open legal, financial, warehousing and logistical channels to quickly move product into the market, expatriate revenue, and handle all domestic tax and regulatory requirements. We also provided end-to-end marketing, creative, and social channel management, as well as access to WPIC’s live stream studios and network of KOLs.
The program provided all these services at a rapid pace, so that a brand could have a Tmall and JD.com store live and selling to Chinese consumers within 25 days.
By launching the program in March, we offered brands the opportunity to enter China in time to capitalize on the 6/18 shopping festival, which promised to be a boon for retailers as consumers engaged in revenge spending after lockdown. Sure enough, the festival saw a total gross merchandise value of nearly $140 billion USD, up roughly 40% from the year prior, demonstrating that consumer demand was roaring again in China—and that online channels would be the key driver of consumption growth growing forward.
The program was such a success that we launched second and third batches of the program—to help brands capitalize on the 11/11 shopping festival later year, and then again for the 6/18 festival in 2021. Overall, we helped dozens of leading consumer brands enter the China market through our accelerator program, helping them achieve growth and revenue targets, and providing essential relief as they faced challenges in their home markets.
I would never say that the pandemic presented WPIC with an opportunity—the human costs of COVID-19 have been simply too great. Moreover, I am confident that e-commerce in China would have continued to grow at a rapid pace without the boost provided by lockdown measures in early 2020.
However, I am proud that WPIC was able to help dozens of consumer brands ride out the worst of the pandemic in 2020. By helping brands activate online in China, brands could salvage their overall growth targets—or at the very least earn revenue off inventory that had been slated for other markets. Since then, we’ve helped these brands build up significant market share in China and sustainable businesses in the market.
Over the last two and a half years, we have also expanded our footprint in China by opening a new office in Hangzhou and a second logistics facility in Nanjing, and increased our global headcount from 150 to nearly 400.
As the COVID-19 pandemic continues to pose new challenges for global commerce, I believe that WPIC’s mission—to connect global consumer brands with APAC markets—has never been more important. I’m confident we will continue to leverage our capabilities to help brands meet the next wave of challenges.
This article is from the AmCham China Quarterly Magazine (Issue 3, 2022). To access the entire publication for free, sign up on our member portal here.