The fast evolution of customers’ habits is posing a challenge for retailers, brands and E-commerce nowadays in China. This is particularly true with the emergence of a large middle-class with the same buying power as Europeans and the youth population educated at the best American and international universities.
During my last visit in April 2016, I was immersed in the Chinese and international population of Beijing and Shanghai. I observed the customers’ behaviors in stores, in public transports and in the streets. It is surprising to see the addiction of Chinese people to their Mobile phones, which they use to interact with friends, watch movies, meet new people around them with the “Shake” option, order online…. The Mobile is at the center of their daily lives and it is becoming the pillar of their social experience.
Digital advertising is also much more developed there than in Europe or in North America — For example, as you ride the subway, short videos and ads are projected on the wall along the rails. It is new kind of billboards.
1/ Digital Natives and Mobile First : 780 millions users of Mobile
Ecommerce and Mobile commerce are becoming increasingly important with the development of technologies such as Mobile payment, numerous applications and the offerings of several Ecommerce pure players like Alibaba group and JC.com (which together represent 80% of the Ecommerce Market in China.) but also T-Mall (Alibaba Group) , JD.Com, Xiu, ICBC, Vip.Com, Moguje, Meilishuo….
The availability of 4G connections in most of the cities facilitates the use of technologies, as one is always able to go online.
China is the worldwide leader of Ecommerce and Mobile commerce. 589 billion Euros were spent in Ecommerce in China in 2015.
The CEO and Founder of Alibaba Group, Jack Ma, is leading the trend. The famous 11.11, “single Day” generated 14,3 billion USD in one day in 2015, with 45 million consumers connected on the Website at the same time at the peak of the day. By comparison, Black Friday and Cyber Monday generated 6 billion USD in revenue in 2015. 70 % of the purchases were made from mobiles.
Big international Brands and retailers such as Procter and Gamble or Costco were partners in this “Global shopping Festival”.
2/ Social Commerce, mobile payment and much more!
In order to get the real Chinese customer experience, you need the WeChat (or Weibo) applications on your smartphone. It is not only the most amazing way to communicate, but also one of the key elements of the customer journey. There are a lot of innovations in phone applications, dominated by Tencent with WeChat. The others as Facebook’s messenger take inspiration from WeCHAT.
With WeChat the users can:
– send text messages and get instant translation, which is very useful to communicate for example in English with Chinese people,
– share pictures with friends using the “Moments” option, create groups, search with interest,
– localize you and your friends; find your way in real life…
– add contacts by scanning personal QR codes; each user has a QR code. Retailers and sales teams like to display QR codes at the cash registers or in front of the stores to keep the relation with customers. You don’t exchange business cards, you connect with QR Codes.
– shop and pay with WeCHAT Wallet or transfer money for example at a restaurant, and calculate to share the bill with attendees and edit your receipt.
– view advertising and use promotional offers and deals in stores or restaurants. Chinese people love “special offers”.
– Entertain themselves with games of course…
Other applications exist in China and allow people to live without using cash or money. They can use wallet for example with Alipay (group Alibaba), one of the biggest third party suppliers for mobile payment. Alipay has a partnership with Samsung in order to face his competitor Apple Pay…
Retailers also use WeChat to recruit personnel. For example, in a company like Zara, after going through check out, the potential candidate scans a QR code which sends him/her a job proposal with a link to a form to fill, which can act as a job application as she/he indicates her/his availability, address, the store of her choice, and also fills out a mini-CV/resume and sends it. This saves recruiters a lot of time.
3/ Chinese innovations and protection of the market
The communist government protects and monitors the Chinese internet and phone conversations — For example, you cannot use American websites like Google and Facebook if you don’t have a VPN.
However, one of the priorities of the 5 years government plan is to facilitate the exponential growth of technological innovation.
American brands have launched products and services in China but they are facing big competitors.
In the world of transportation, UBER, the international service first entered China in 2014, and hasn’t stopped moving forward regardless of the speed bumps and multi billion RMB (Chinese currency) valued competitors along the way. Since then, Uber has rounded up funding from Baidu, added payment methods (including UnionPay, Alipay and Paypal) but still Uber is not the first service. The biggest competitor is Didi Chunxing, formerly known as Didi Dache and Kuaidi Dache, the Tencent and Alibaba backed car hailing services merged in February 2015 and now poses the greatest competition to Ubers’s quest for worldwide domination.
The Chinese market is very specific in how much consumer experiences are linked to mobile phones and other digital platforms; this offers a new set of opportunities for retailers to market themselves to their audience and directly reach individual potential customers, but it also means considerable resources have to be invested in seducing a mobile-savvy, sophisticated and very choosy group of people. Digital plays a bigger role in China than in most other markets, and harnessing its power can be an incredible way of making it big in this increasingly wealthy and competitive economy.