SofaCompany saw a sales increase during the recent pandemic. The rise of their eCommerce performance in their home country had led them to conclude that expanding into new countries via eCommerce channels could be an interesting opportunity. Moving into China was one of the options, but as with any investment it comes with an opportunity cost. Was it better to enter the Chinese market or focus on the United States? SofaCompany asked Chaoly to build a business case and validate their product-market fit in China.
To assess the potential for the Chinese market, Chaoly’s data analyst team looked at the historical, current and future market trends, as well as the current landscape on the main eCommerce channel Tmall. The aim was to find a (sub) category that was growing, but yet to be saturated.
The desk research was complemented with digital experimentation using our online store on Tmall to validate SofaCompany’s product-market fit, before they made the decision to invest and enter the market. Based on all the input we gathered, we created a detailed 24 months P&L, cashflow forecast and break-even point analysis. We didn’t simply create a report, but a roadmap to success which included recommending potential local partners, platform selection, and a suggested product range.
The market feasibility report included a detailed financial overview that enabled SofaCompany to make an informed and substantiated investment decision. The digital experimentation provided real-time consumer insights in hero product selection, core USP, and which slogan resonated best with the target audience.
