Interview with Gregor McMillan, Business Development, China at The Hut Group

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Gregor McMillan

 

 

Gregor McMillan
Business Development, China
The Hut Group

 

 

 

 

Greg manages the rapid growth and development of The Hut Group’s China business, which represents about 10% of annual revenue, almost all of which is cross-border. The Hut Group combines global brands and standards, a proprietary platform and local marketing to deliver an unbeatable product to the Chinese consumer.

 

Give us an overview of your business

 

The Hut Group was founded 13 years ago, initially selling DVDs and video games online. However it soon became apparent, with the move toward digital downloads and streaming, that basing a business around these older forms of media wouldn’t work out in the long-term – the future was elsewhere.

 

Our focus then shifted on to health & beauty and cosmetics. We were able to scale up rapidly, buying some key brands that helped to cement our reputation in these sectors and enabled us to expand into some cross-border territories quickly. Around four years ago we bought MyProtein, which provided a strong boost to our appeal in the Chinese market – China is my area of responsibility with The Hut Group. A lot of beauty brands arrived there at the same time and it was a high-growth market for these product-types, but even now we continue to secure high double-digit growth against a good base.

 

I studied Chinese at university, so I’ve had a long-standing interest in the country. I previously worked as a ship / yacht broker there, but I’ve now been at The Hut Group for nine months working on projects and strategy.

 

How did you approach getting started with cross-border?

 

Our approach is that we have to be in control of all that we do, so we don’t relinquish control of key areas, such as marketing, to agencies. That’s not to say we don’t use any local partners or agencies – we use them where appropriate, but maintaining overall control is important as it enables us to guarantee the quality of experience right throughout and up to the end-customers’ door. Our .fr site was the first dedicated cross-border site we launched and we’ve been able to apply the lessons learnt from that initial expansion to other markets. The French market is now a substantial one for The Hut Group.

 

We have a .com site which enables us to switch on shipping to other countries. This isn’t just about the additional sales you can make through it, it’s also very useful for identifying where the interest from customers in other markets seems to be, where you are booking revenue. If it seems to be there, we look at increasing marketing activity, perhaps running a dedicated campaign. Once you get to a certain level, you then need to monitor performance and listen to customers there to see what needs to be done to optimise elements of the service – customer service, logistics etc.

 

What’s the appeal of your brand for shoppers in other markets?

 

For the Chinese market being able to demonstrate integrity is important, that’s one of the reasons that British brands are popular there. They are buying into the western idea of high standards and quality of product. Giving the customer confidence that the product they are buying is genuine and that they can have trust in us as a brand, British brands benefit from being able to trade on reputation.

 

Which countries / regions do you currently ship to?

 

We ship to every country that you can do legally from our .com site. We actively market to the UK, Europe, US, Australia and China. In total we ship to 195 countries or 238 territories.

 

We weren’t specifically targeting China a few years back, our decision to have a focus there happened almost by accident. Chinese shoppers found us, making purchases from the English language site at first. This encouraged us to take a strategic approach and look at entering the market seriously, starting to optimise areas of the experience. We also launched in Japan recently, which is taking off very quickly because we have done our homework well – we know where the shoppers are, understand their behaviour and the channels they use.

 

Any plans for future cross-border expansion (which regions)?

 

We are launching a huge number of international sites, putting a lot of resource behind it. New countries / regions for expansion include Hong Kong, Japan, Asia, Brazil, Mexico and Indonesia.

 

Obviously you can overstretch yourself if you try to expand everywhere at the same time, so we prioritise markets based on the usual consultant logic – size of market, competition, online / mobile penetration. Also geographical spread is a factor worth considering. Take Indonesia – while traditionally a poor region overall, if you just start by focusing on Jakarta, it’s a well-connected place where the opportunity is good actually.

 

It’s not all just about identifying the markets where the opportunity is strongest generally though – if you see traffic coming in from a particular country not currently on your radar, it probably tells you something and may be worth resourcing.

 

Do you have any advice for people at early stages of cross-border?

 

It depends on the territory you are looking at. If you are serious about expanding somewhere you need to invest in local marketing, work out what channels are used by shoppers there and identify the markets that are going to work for you. It might require some degree of stepping out of your comfort zone as customer expectation and behaviour might be very different in other markets.

 

What can people learn from your session at the eCommerce Worldwide Summit?

 

You’ll be able to hear from someone with experience of having done it all ourselves, not spending money on agencies to do it for you – we’ve made our own mistakes and learnt from them. We’ve had a culture of bringing people in and letting them get their hands dirty, learning how to do it themselves. The consequence is that we have a young staff generally speaking, we get huge operational support from the company but on the whole many of us here are self-taught, we know how this stuff works and I can share my experience of trading into China.

 

Register for eCommerce Worldwide Summit here (free for retailers) and listen to Gregor discuss about the opportunities and and experiences The Hut Group faced when launching into China.

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