Ralph Gladis, Computop: "China is a huge opportunity. What does it take to be successful in China?"

Monday 20 October 2014 09:49 CET | Editor: Melisande Mual | Interview

For retailers it is difficult to be profitable in China due to low margins and large competitors

Chinese ecommerce and payment markets are large, mature and complex. As Google and Facebook are not relevant in China, merchants need to establish SEO/SEM with Baidu, as well as social networking with the likes of WeChat. Visa, MasterCard and PayPal are not relevant either but local players like 99bill, Alipay and LianLian are. More than anywhere else, it is important to be local in China. The key for success in China is a local team and a local data center. In order to help merchants and white label customers like banks and PSPs, Computop has local teams in China and a domestic Paygate platform connected to all relevant Chinese acquirers and PSPs.

What are typical obstacles in China?

The great Chinese firewall slows down overseas internet traffic up to the point of time outs. Selling into China requires a truly domestic solution. The shop needs to be in Chinese, with a Chinese layout running in a Chinese datacenter and offering Chinese payment methods in CNY. Don’t believe anyone telling you that a global payment gateway with a CDN is good enough. It’s not. Merchants need a local shop and a local payment platform positioned in a local Chinese datacenter within the borders of the Chinese Firewall.

What is the best approach to enter the Chinese market?

For retailers it is difficult to be profitable in China due to low margins and large competitors. However, Chinese consumers love Western brands and brands have a margin that can cover the localisation efforts. The old market approach was to setup a single brand flagship store with Demandware, Magento or hybris and another shop on Tmall or Taobao because 70% of all ecommerce comes through marketplaces. Without marketing on Taobao or Tmall it was impossible to be successful in China. That has changed recently: at Computop, we see first merchants and brands not using shops on Tmall or Taobao anymore because they can now buy marketing services as well as shipment or social networking support directly from our local partners like Alipay, Bluecom or Netbooster. Instead of opening a shop on Tmall, merchants can now buy marketing services on Tmall in order to direct all traffic directly into their single brand flagship store.

What market developments do you expect and what’s your next move?

We have come to China because many Computop customers like C&A, Fossil, METRO, Otto and Swarovski are already active in the local market and we are signing up more customers for China inbound business every month. For developing China outbound business, we have signed up Chinese PSPs as white label partners because it’s easier for them to sell Western payments to their customer base than it is for Computop China to win merchants one by one. Of course, Western banks and PSPs using our Computop Paygate white label services can sell our Chinese payment solution to their customer base, too.

In terms of market developments we expect a large shift of business, leaving marketplaces in favour of single brand flagship stores. That helps with branding as well as with omni-channel activities. First, Chinese retailers start to implement new in-store technology like QR codes and mPOS tablet solutions. Currently, we are busy with standardising Computop’s POS and mPOS solutions with our mobile and online payment solutions in Europe, US and China. Obviously, it’s not an easy task but it is the global omni-channel solution international merchants and brands actually need. Last but not least, that solution helps banks and PSPs who are using Computop’s white label services to enter many countries and cover all channels.

About the author

Ralf Gladis is CEO and co-founder of the global PSP Computop. Prior to founding Computop, Ralf developed databases and wrote books published by German IT editors.

During the early years, Ralf acted as architect of the Paygate software, utilizing his technical background. Today, Ralf is responsible for international expansion and marketing.

Company description

Computop is a recognised global leader in secure payment solutions and fraud prevention. As a long established industry leader with a reputation for customer satisfaction and service excellence Computop draws on a unique partner network worldwide, impressive security heritage, and state-of-the-art technological platform in order to deliver global and innovative e-payment solutions that fit any multichannel business model. Computop processes payments at a worth of US$ 12 billion p.a. for white label partners and 3500 large international merchants including global brands like C&A, Fossil, METRO, Otto Group, Rakuten and Samsung.

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Keywords: China, ecommerce, western products, Customers, merchants, Computop, interview, market, marketplace, Investor, cross-border sales
Countries: World