[China Glass Network] Some time ago, Huang Dehua, a practical and research expert in marketing, interviewed Sun Ying, the editor of "China Brand" magazine from Xinhua News Agency, on topics such as online marketing, online flagship stores, and flash sales. The interview was published in the "China Brand" magazine on March 11, 2010, and is now shared for your reference.
1. "China Brand": Online shopping has become a common way of consumption, and many businesses have launched brand flagship stores online. These stores are generally considered to offer better quality and assurance, but when it comes to pricing, they often match physical stores, which limits their competitiveness in the online space. What advice would you give to online brand flagship stores? How can they differentiate themselves from physical stores and complement each other?
Huang Dehua: This is a challenging issue that requires careful consideration. Online brand flagship stores are still a relatively new concept, and most companies are still learning how to operate them effectively. The financial crisis accelerated the growth of online shopping, making it an important strategy for businesses to overcome sales challenges. Many companies have started to explore this channel.
In my opinion, the key to successful online brand store operations is to establish a mindset that emphasizes convenience rather than just low prices. Many people mistakenly believe that online goods are cheaper because they go directly from manufacturers to consumers, skipping traditional distribution channels. However, online shopping involves various service providers, such as logistics, third-party payment platforms, and online advertisers. In fact, the cost is simply shifted from traditional retailers to these digital partners.
Today, many Taobao merchants spend heavily on Baidu ads to gain visibility, as competition is fierce and it's easy for customers to overlook small shops. Companies also invest in homepage advertisements, links, and even new media platforms like Taobao World. Baidu bidding ads can cost tens of dollars per click, and advertising across websites, including Sina, continues to rise. As a result, online products are no longer automatically seen as cheap—convenience and user experience are becoming the main selling points.
Second, when building a brand flagship store, companies need to make strategic decisions: Should they open an entire online store or only select products? Should it be an independent platform or part of a larger network? Most brands start by launching a few products on popular e-commerce platforms and gradually build their own online stores or even a full-fledged e-commerce platform. This allows for the coexistence of three models: physical stores, brand flagship stores, and the company’s own online portal.
Third, the pricing strategy between online and physical stores should be closely aligned. The real advantage of online shopping lies in convenience and quality, not just price. As online advertising costs continue to rise, the price difference between online and offline will likely shrink. Unless manufacturing costs drop significantly, online stores may not always be cheaper. However, promotional events like flash sales can help attract attention and build brand awareness. If pricing differs, it's best to separate product lines—online and offline stores can carry different styles or versions of the same brand.
Fourth, focus on delivering value to customers. Online stores should offer convenience, fast delivery, and competitive pricing, while physical stores provide in-person experiences, personalized service, and instant availability. Each channel plays a unique role in the customer journey.
Fifth, train sales staff with different skills. Online sellers must master digital communication and understand how to engage with customers through online language. They also need to manage reviews and handle feedback effectively. On the other hand, in-store salespeople should focus on face-to-face interaction, visual merchandising, and customer service. Physical stores may have higher operational costs, but some companies use online distribution points as extensions of their physical presence, so in-store staff should also have delivery capabilities.
2. "China Brand": In addition to Taobao, Li Ning plans to build its own online shopping platform next year. What do you think about this move?
Huang Dehua: This is a very insightful question! Over the next 3–5 years, most offline businesses will develop their own online presence. Brand flagship stores and self-built e-commerce platforms will coexist. The Internet has become a crucial channel for consumers, especially younger generations, to access product information. Online shopping is now an integral part of their daily lives. Platforms like brand flagship stores make it easier for consumers to learn about brands and products, creating a more direct and engaging shopping experience.
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