The Dentsu Group has launched "Dentsu CXC," a cross-organizational unit addressing marketing challenges in the Japan-China hybrid market through cross-border collaboration.

The text of the Dentsu Inc. news release distributed on May 29 is as follows.

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May 29, 2019

The first initiative in service line development is a strategic business alliance between Dentsu Digital Inc. and China's online sales and brand consulting company "USHOPAL."

Dentsu Group Inc. (Headquarters: Minato-ku, Tokyo; President: Toshihiro Yamamoto) will establish the cross-group organization "Dentsu China Xover Center" (abbreviated as "Dentsu CXC") effective June 1. This initiative, developed in collaboration with group companies, aims to provide cross-border solutions to marketing challenges faced by Japanese and Chinese companies in the Japan-China hybrid market.

This organization comprises staff from Dentsu Inc. and group companies in Japan and China who specialize in China business. The name CXC signifies combining China with business domains starting with the letter C, such as Communication, Commerce, Contents, Creative, and Collaboration. The decision to establish this cross-border structure stems from the judgment that Japan and China should be viewed not as two separate markets, but as a hybrid market where they mutually influence each other. Moving forward, Dentsu CXC will promote business support for companies targeting the four markets shown in the diagram below.

As the first step in developing specific service lines, Dentsu Digital Inc. (Headquarters: Minato-ku, Tokyo; President: Yoshihisa Suzuki) has formed a strategic business alliance with USHOPAL (hereinafter "USHOPAL"), which handles online sales and brand consulting in China, to address areas ③ and ④ in the diagram above.

This move responds to the current reality that building sales channels and brands in China presents significant challenges. The Chinese E-Commerce Law, enacted by the Chinese government on January 1, 2019, regulates sales activities by resellers. Consequently, this is beginning to impact inbound demand from Japan. For companies that have relied on inbound demand, building direct sales channels—such as cross-border e-commerce from Japan to China and domestic sales channels within China—has become an urgent priority to offset this decline.

In light of this situation, our group has established a one-stop support system for brands considering entry into the Chinese market, as well as for companies already engaged in cross-border e-commerce or operating within China but struggling with brand building and managing multiple online sales channels.

By combining our Group's strengths in brand building and promotional activities with Ushopal's expertise in online distribution and sales, including product sourcing, we will provide meticulous services unmatched by competitors.

Specifically, this encompasses the following four main services:

1. Brand Building Support Consulting for the Chinese Market
・Brand building to become a chosen brand in the Chinese market, rather than relying on bulk buying sprees where specific products sell in large quantities.
・"Product portfolio strategy" to generate profits across the entire brand.

2. Online Sales Channel Development and Various Promotion Services
・Expanding sales channels by appropriately selecting and utilizing major online sales channels, including flagship stores on prominent Chinese e-commerce platforms like Tmall and JD.
• Properly manage various promotional activities within China's diversifying and increasingly complex online sales channels.

3. In-store promotion services like sampling, coordinated with physical stores
・Since it is difficult for cross-border e-commerce to allow customers to physically touch and try products within China, we utilize multiple experience stores "Bonnie&Clyde" owned by Ushopal to conduct in-store promotions.

4. One-stop support from inventory forecasting to product logistics (customs clearance, warehousing, delivery, etc.)
・While domestic Chinese e-commerce logistics now routinely deliver within 2-3 days of order placement, direct shipping from Japan via cross-border e-commerce increasingly fails to meet Chinese consumer needs due to stricter customs inspections. Therefore, we established a system that simultaneously reduces delivery times and eliminates logistics stress by utilizing Ushoppal's domestic Chinese warehouses (including bonded warehouses).
・Utilizing Ushopal's proprietary inventory forecasting and management system to prevent stockouts, which are critical in online sales.

■Online & Offline Channels Covered in the Chinese Market Through This Business Partnership

＜Overview of USHOPAL＞
・Company Name: USHOPAL
https://www.ushopal.com/index_jp.html (Japanese)
・Location: Changning District, Shanghai, China
・Representative: Guo Lu (CEO)
・Established: July 2015
・Business Overview: Provides business support to companies and brands aiming to enter the Chinese market. Specializes particularly in the beauty and healthcare sectors targeting women, such as cosmetics, skincare, and supplements. By simultaneously and efficiently implementing "brand building and awareness," "channel development and management," and "product portfolio management," it devises optimal sales methods and marketing strategies for brands from a comprehensive perspective, contributing to the success of client companies' businesses in the Chinese market.

＜Dentsu CXC Logo Mark (Trademark Application Pending)＞

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Dentsu Inc. News Release
http://www.dentsu.co.jp/news/release/2019/0529-009829.html