WalktheChat – Enabling SME’s To Sell Directly to China Via WeChat

WalktheChat: Enabling
SME’s To Sell Directly to
China Via WeChat

WalktheChat is an e-commerce platform enabling foreign businesses to set-up cross-border online stores on
WeChat. The company is based in Beijing.
With more than 2,000 stores created, WalktheChat is already a profitable and growing software company. Its
main challenge is to educate foreign businesses in order to help them understand the opportunities and
challenges of the Chinese digital ecosystem, which is still misunderstood outside China.

Type of business: E-commerce platform

Operation history in China: Since 2015
Company size in China: 6 employees
Target market: Western SME’s

The inception of WalktheChat: agency years

WalktheChat was born in late 2014 of a simple observation: foreign companies

in China tend to have a hard time grasping the newest concepts of Social Media
in China.

Founded by Thomas Graziani, a former management consultant with a training

in mathematical engineering, WalktheChat set out to solve this issue. It was
bootstrapped by selling right away to local businesses.
https://walkthechat.com
Due to the high market demand, WalktheChat quickly managed to close deals
with large F&B groups such as Nestléand Arla, or in various industries such as
entertainment with the American Football League (NFL).

For these clients, WalktheChat conducted mostly strategic assessment of their

WeChat development needs, and conducted some in-house IT development for
the clients WeChat Accounts.

WalktheChat was however never meant to be just another agency. The company
quickly evolved into a very different kind of structure: a Software as a Service
(SaaS) company.

The move to SaaS enabled WalktheChat to drive recurrent monthly cash-flows

and to generate long-term sustainable growth.

WalktheChat was incorporated as a WFOE with a Hong Kong holding.

© 2017 EU SME Centre 1

 WalktheChat – Enabling SME’s To Sell Directly to China Via WeChat
The growth of WalktheChat: SaaS years
Understanding your clients’
needs
Growing in the Chinese Market
Bridging the gap between
China and the West
Early 2016, WalktheChat pivoted to a new model: software.
The idea was simple: agency work provides little opportunity to scale and build
a long-term, sustainable business model. Moreover, a lot of the clients from
WalktheChat had the same request: setting up a store on the Chinese market.
This request came repeatedly from requests submitted on WalktheChat’s
website (the company had driven traffic through publishing high-quality
content about Chinese social medias)
Within a few months, WalktheChat developed the first prototype of what is now
a very mature e-commerce platform.
The platform enables foreign companies to start a shop in just a click. These
shops have two specificities:
- They are multilingual, enabling operations in English, Chinese and
other languages;
- Most importantly, they are cross-border: customers can pay in CNY
while the money is eventually received by the merchant in foreign
currencies (USD, HKD, NZD, AUD, etc.). This cross-border payment
feature enables companies to start selling in China without the need to
set up a local legal structure (which is a lengthy and complex process).
This game changing model enabled WalktheChat to tap into the huge demand
for vendors to export to China without setting up a local company in China, and
enabled by services provided by Tencent and Alibaba for cross-border
payments.
Within 8 months of launch, WalktheChat e-commerce platform had nearly
2,000 stores created.
There is no shortage of companies providing marketing and development
services on the Chinese market. What can a company do to stand out?
Anyone who did business in China knows that there is a graveyard of foreign
businesses who didn’t manage to make a dent in this market and ended up
closing shop.
“We have been upfront from the start that if we were to be successful, we needed
to use our foreign DNA as an asset. It meant interacting, to some extent, with
the Western world”, said Thomas Graziani, CEO at WalktheChat.
WalktheChat did so by becoming a bridge between the West and China when it
comes to understanding and using WeChat. Where no content existed in
English, and where no company was effectively translating the concepts for a
foreign audience, they found their market.
© 2017 EU SME Centre 2
 WalktheChat – Enabling SME’s To Sell Directly to China Via WeChat

First mover advantage on The first thing which made WalktheChat successful was the choice of using
WeChat WeChat as a B2B marketing channel, in English, back in 2014.

“Our first articles helped foreigners get a basic understand of what WeChat was
as a marketing channel. Over time” said Thomas, “we became one of the biggest
English-speaking public accounts on WeChat. WeChat was our first customer
acquisition channel, and is still an important inbound channel for us today”.

Focus on content quality Despite the first mover advantage, management at WalktheChat knew this
wouldn’t last long. As early as 2015, agencies started to emulate their marketing
strategy and published guides and reports about WeChat and marketing in
China.

“Our focus has always been on producing the highest content quality. Not only
did this position us as a brand, but it gave us incredible expose: we’ve been
quoted in the Wall Street Journal, Business Insider, TechCrunch and more”,
stated Thomas. WalktheChat was offered public speaking engagements with
Deutsche Bank, various embassies and at other high-profile conferences.

This wouldn’t have been possible without a very structured content strategy.

The team The team at WalktheChat is both a mix of Chinese nationals and foreigners, and
a mix of engineers and business people. About 50% of the team is Chinese, and
about 50% of them are engineers.

In the words of Thomas: “We remain a very tech-focused company, and even
marketing people, salespeople and customer service representative are expected
to be at ease with basic concepts of coding, and with advanced marketing
automation software, which is essential to our client follow-up”.

Prospects for WalktheChat

Moving forward As it is moving forward, WalktheChat is expanding its scope to a wider range
of services. In particular, the company is developing sales through third-party
channels such as WeChat Key Opinion Leaders.

These new models enable their clients to sell to China directly on a commission-
based model, thus reducing their risks when entering the competitive Chinese
market.

Challenges in Accessing the Market

Finding the sweet spot Doing business in China of course comes with a set of challenges. Here are
some of the main ones WalktheChat had to overcome.

Any startup struggles to find its positioning. The challenge is even higher in
China, as foreign startups only have a limited number of potential successful
trajectories compared to their Chinese competitors.

As such WalktheChat has been experimenting with several approaches:

- Agency model;

© 2017 EU SME Centre 3

 WalktheChat – Enabling SME’s To Sell Directly to China Via WeChat

- Analytics tools;
- Selling content;
- Targeting re-purchase from Chinese customers;
- Cross-border ecommerce tools.

This last iteration turned out to be a successful driver of growth, but they keep
experimenting on a weekly and even daily basis.

Remote sales In general, a foreign startup can be expected to carry a larger number of pivots
than its Chinese counterpart, as the path it can walk to reach product-market-fit
is narrower.

Because of their cross-border positioning, sales have to be done remotely.

This presents a constant challenge in order to create a feeling of trust with your
clients, especially before the projects start.

At WalktheChat, they have been using several levers to solve this issue:

- Strong emphasis on content marketing to give a sense of expertise;

- Free trials enabling to test our product before paying;
- Gradual pricing, starting with low packages and then up-sells;
- Monthly pricing with no commitment;
- Responsive customer service, especially via online chat, email and
WeChat;
- Very transparent communication over the advantages and drawbacks
of our solution in order to build mutual trust.

Thomas said: “By a combination of these approaches, we managed to build an

internal culture which is focused on client success rather than mindless increase
of revenue. This culture is felt during exchanges between salespeople and
clients and enables us to grow even with clients we have only been in touch
through a short phone call”.

Recruiting It will come as no surprise that recruitment is one of the main challenges in
China. There are several reasons why recruitment is difficult for SME’s in
China:

- Many Chinese employees are pessimistic about the prospects of foreign

companies in China, and are reluctant to join them;
- The job market in Tier 1 cities (Beijing, Shanghai, Chongqing) is
extremely competitive;
- Western SME’s can carry a bad stigma in terms of CV and offer less
prospects than Chinese counterparts which are better known on the
local market;
- It is harder to convince people to join your team due to the cultural
divide;

© 2017 EU SME Centre 4

 WalktheChat – Enabling SME’s To Sell Directly to China Via WeChat

There are a few ways to counterbalance these downsides:

1. Content strategy helped carry the company’s culture and expertise,

which convinced more people to join;
2. Public speaking is a great way to inspire people to join your team by
conveying both the expertise of the company and its inspirational
mission;
3. Culture goes a long way. Having a growth-oriented management style
and empowering employees with genuine trust can really make a
difference, especially in China.
Conclusion and Final Recommendations
As a company operating in China and targeting foreign clients, WalktheChat faced number of challenges in
its existence. Finding the right product-market-fit and gathering the right team wasn’t easy, and fast-iteration
was essential in order to ensure success.

Startups in China need to be nimbler than they would be in the West: the market moves faster, and is less
forgiving due to a very large domestic market implying a very intense competition. This is especially true for
digital products on which geographical location within China isn’t a concern.

© 2017 EU SME Centre 5

 WalktheChat – Enabling SME’s To Sell Directly to China Via WeChat

The EU SME Centre helps EU SMEs prepare to do business in China by providing them with a range of
information, advice, training and support services. Established in October 2010 and funded by the European
Union, the Centre has entered its second phase which will run until July 2018.

The Centre is implemented by a consortium of six partners – the China-Britain Business Council, the Benelux
Chamber of Commerce, the China-Italy Chamber of Commerce, the French Chamber of Commerce in China,
the EUROCHAMBRES, and the European Union Chamber of Commerce in China. All services are available
on the Centre’s website after registration, please visit: www.eusmecentre.org.cn.

For this case study the EU SME Centre has partnered with the French Chamber of Commerce in China
(EUCCC). The publication aims to help EU SMEs gain an understanding of the challenges companies may
face when accessing or expanding in the China market as well as offer practical tips on how to overcome them.

Established in 1992, the French Chamber of Commerce and Industry in China (CCIFC) is an organization
which represents French companies doing business in China. French Chamber’s membership comprises a
network of more than 1,548 member organizations. The CCIFC activities are mainly financed by its
membership and services fees, and its organization does not benefit from any public funding. With a work
force of 50 people, CCIFC helps the French companies to start and develop their business in China. Its General
Headquarter is based in Beijing with branches and offices in Shanghai, Canton, Shenzhen, and Chengdu. For
more information about the activities of the CCIFC, please visit: http://www.ccifc.org/.

Contact the Centre at

Room 910, Sunflower Tower - 37 Maizidian West Street - Chaoyang District - Beijing, 100125
T: +86 10 8527 5300; F: +86 10 8527 5093
www.eusmecentre.org.cn ; info@eusmecentre.org.cn

Disclaimer

This document is provided for general information purposes only and does not constitute legal, investment or other
professional advice on any subject matter. Whereas every effort has been made to ensure that the information given in this
document is accurate, the EU SME Centre accepts no liability for any errors, omissions or misleading statements, and no
warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation
mentioned. Publication as well as commercial and non-commercial transmission to a third party is prohibited unless prior
permission is obtained from the EU SME Centre. The views expressed in this publication do not necessarily reflect the
views of the European Commission.

Date: April, 2017.

The EU SME Centre is an initiative implemented with the financial support of the European Union.

© 2017 EU SME Centre 6