Chinese Payment Solutions and Market Entry

Who are we

RedFern Associates provides commercially relevant, practically useful

advice, which adds value to companies at all stages of the China

business cycle.

Market Entry Strategy

Market Research and Product Monitoring

Market Access – Partner and Channel identification

Mergers and Acquisitions – Process Management

Corporate & Financial Services

Legal Entity Establishment

Taxation, Accounting and Due Diligence, compliance

Trademarks, Product Registrations

Providing Ecommerce channels, data and social media traction

Born out of the need in market for more affordable, quality digital

solutions that effectively increase brand awareness and target the

Chinese consumer.

After 15 years in the China market we have grown

alongside our clients, some of which are now among

the most successful brands in-market.

Our Belief

We believe that every brand no matter their size, sale or niche should

have access to the China market whether it be from home or abroad.

Our China-ready incubation series allows brands to achieve that goal

through a risk-averse step-by-step market entry approach.

This approach can allow brands to opt out at any point along the

incubation series but presents an opportunity for successful China

market-entry.

Enter the Chinese Market without even going there!

China Landscape

Overtaken the USA to become the largest e-commerce market in the world and is on track to be

worth US$840 billion in 2021 - 95% on mobile devices

Edinburgh is the most popular destination in the UK, outside of London.

Chinese visitors to the UK spend four times more than the average tourist, 40% prefer mobile

payments

They use different tools such as Weibo (Facebook and Twitter) or WeChat (WhatsApp). They can’t

access Google and mostly use a Baidu instead.

Beijing extending transition period of cross-border ecommerce until end of 2018

Cross Border eCommerce Window of Opportunity for Brands….

Alipay• WeChat has now transformed into what is being

known as a lifestyle application

• 35 million accounts - 38billion daily messages

• 35% of the time users spend on their mobile

phones

• Largely misunderstood outside of China

• Powerful tool for brands and destinations to

engage with Chinese consumers and the China

market

• Largest market share out of China’s online

payment platforms (nearly 53%)

• Used during 120,000,000 overseas trips in 2017

• Works directly with over 40 overseas financial

institutions and payment solution providers to

enable cross-border payments for Chinese

travelling overseas

WeChat Pay

Consumer convenience is key….

How it works

• Integrate Alipay and WeChat pay into your existing payment system

• Chinese tourists make payment with WeChat Pay in Yuan, you receive GBP

• Range of payment integrations

✓QR Code scan (£58 limit)

✓ Store/brand payment APP open on smartphone or tablet in-store

✓ Point of sale (costly)

✓Online store

.

How do I set it up?

1) Understanding whether your business is suitable

2) Ensuring you integrate BOTH Alipay and WeChat Pay

3) Partner with a payment intermediary

4) Select the most suitable payment integration method

5) Set-up your system

Connect - Alipay

Capture - WeChat

Nurture - Social

Sell - CBEC

02

01

03

04

Connect

• Merchants who have integrated Alipay become visible on the Alipay ‘Discover’

platform

• Chinese tourists connect with and are exposed to your business before and during

their trip

• Drives tourists directly to your business

Free traffic generation…

Capture

• Chinese tourists complete payments with WeChat Pay

• Connect your WeChat Pay solution to your brands’ WeChat Official account

• Activate ‘Click through and Pay’/’Pay and follow’ function

• All WeChat paying customers are captured within your Official WeChat Account

Free follower acquisition…

Nurture: Social

• Once captured in your WeChat Official Account, nurture your following with

relevant, engaging content – translated and posted regularly. KOL’s

• Those who have bought your products or used your services are likely to share

links to friends and family through WeChat

• Organic growth and WOM marketing

• Create a China based brand following – grow it!

A WeChat Official Account (Service) is key for any brand that is serious about China…

CBEC: Sell

• 93% of Chinese Tourists want to purchase the same products back

home

• Once followership grows sell directly to acquired WeChat followers

through cross-border direct mail shop

• KOL campaign activation to drive traffic and sales

• Change business mode to FTZ once product demand high

• Formal China Market Entry

Chinese Cross-border Delivery Mode

Direct Mail Mode Bonded Mode

Consumer order Bulk purchase and store

Foreign purchase

Order distribution, labels on

Arrive at domestic airports

Customs warehousing

Delivery service

Entry to China

Declaration of customs declaration

Stored in free trade zone

Consumer order

Order distribution, labels on

Delivery service

Process of Entering China Market

0

0.2

0.4

0.6

0.8

1

1.2

stage 1 stage 2 stage 3 stage 4 stage 5

Enter

Click-through and pay

feature to WeChat account

Free Trade

Zone

Cross-

border

shop

KOL

WeChat

Payment

Start to show promise Great brand exposure

Set up WeChat PayEstablish cross-

border shop

Latch on KOLs to the

accountFree Trade Zone China market entry

The Incubation Series Helping brands sell to the Chinese market.

1. Establish Chinese payment solutions in-store free-of-charge.

2. Set-up and verification of WeChat account with H5 integration.

3. Implement a click through-and-pay that will enable free follower acquisition.

4. Implementation of the cross-border shop for Cross-border direct mail.

5. KOL Activation and campaign creation.

6. Change of business model to FTZ storing of product to handle large demand.

7. China Market Entry.