Crayola launch in China

Mention the name Crayola in the United States and everyone instantly knows you’re talking about crayons and various other art supplies. The venerable U.S-based brand has 99% name recognition in consumer households in its homeland and sells in over 80 countries overall, but in China, it’s a new brand and in a niche category with a low margin—which meant that establishing a presence, would be a big challenge.

The beauty of Continuous Commerce is that even brands with smaller budgets can jumpstart their operations in places like China by focusing on eCommerce. Crayola started out by doing a deep dive into channel research. The brand ruled out selling from its own site after research indicated that only 19% of Chinese online shoppers buy from official brand sites, versus 41% in Japan and 60% in Europe. Instead, after investigating a handful of other channel options, Crayola identified as its strategic entry point.

Why? The reasons are partly strategic, partly based on specific insights into the Chinese marketplace. Established B2C platforms offer the chance to leverage heavy quantities of traffic that are already in place. In the case of China, shoppers tend to seek out validation for their buying decisions, and general B2C platforms such as Tmall include product specification, pricing, promotional offers, and product reviews that are fully transparent.

Then there was the demographic issue. Over the last five years, Tmall has cultivated a strong base of young, working women known to spend lavishly on the platform’s apparel section. Knowing that a certain percentage of this group would be soon moving into motherhood, Crayola’s team speculated that Tmall would send waves of high-quality traffic to the stationery section of the e-store, where crayons were selling.

There were other factors as well. Global brands with smaller budgets tend to like to dip a toe in the water in new markets, by experimenting with a mix of online promotional sales drivers as a way to build a foundation for further growth.

Crayola launched its flagship store on June 1, 2013, with an emphasis on the brand philosophy: unleash kids’ creativity and originality. Sales picked up steadily from June to August as it piloted and optimized it’s operational practices. The first sales peak came with the back-to-school season, which we maximized by building and fulfilling the demand for crayons for classroom purposes. During this time, we evaluated and continuously improved the e-store operations by closely monitoring core KPIs such as basket size, conversion rate, and traffic bounce-out rate.

Third, once this foundation held, the next step was to ride the growing momentum into a major event on November 11: Tmall’s Singles’ Day (its Cyber Monday equivalent), which brings the year’s most enticing promotions. Crayola seized the change for a quantum leap forward with elaborate planning and fine-tuned project management. An aggressive portfolio of sales-driven tactics, such as innovative bundling, pre-downloaded coupons, limited-time offers, flash sales, and group buys led to a strong sales performance: the Tmall eStore hit its first million-dollar-revenue day. Since then, Crayola has continued to steadily grow its profile in China as evidenced by these results:

  •  Total singles’-day sales achieved more than 150 times the daily sales average in the previous month
  • Search volume in Tmall increased by more than 100%, indicating high brand awareness and preference
  • Conversion rate exceeded 30%, reflecting the success of tactical promotions and content in driving appeal and purchase intent

The successful Tmall launch proved that finding the right e-channel strategy can help Continuous Commerce-oriented brands with strong products but low market awareness. Crayola’s approach may have been unconventional, but it was highly effective.

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