Just how dominant is China on the global economic stage? Writer Joseph Stiglitz put it into perspective recently when he stated, “2014 was the last year in which the United States could claim to be the world’s largest economic power. China enters 2015 in the top position, where it will likely remain for a very long time, if not forever.”
Brands should take note.
For the first time, Chinese-language users now outnumber English-language users for accessing the internet. It’s now the biggest smartphone market in the world (there were 98.8 million shipments in the first quarter of 2015 alone). It’s likely the biggest e-commerce market in the world too.
Marketers hear these sorts of stats dropped all the time. But what’s often not understood — especially by American marketers — is how savvy and progressive social commerce has become in China.
Chinese consumers today rapidly adopt the latest mobile technologies, then adjust their behaviors to enjoy new shopping experiences on their phones. They evolve so quickly, in fact, that the changes can barely be benchmarked. At a Razorfish summit in China earlier this month, Jim Lerch, business development manager at the country’s leading internet TV platform, Youku Tudou, reported that most national brands and research firms are forgoing publishing consumer trend surveys. Apparently, by the time one comes out, the information is outdated.
Experts say China is, conservatively, 10 years ahead of the West when it comes to social commerce. Think about that: a full decade ahead.
This means it’s imperative for brands to pay close attention not just to statistics about tech penetration in China — but have a strong grasp on how new technology is impacting the way consumers are behaving. Clients that study these changing social commerce trends in China and then prepare for them stateside will have a leg up. Here are six eye-opening examples.
Burberry’s shoppers are on average 20 years younger in China than in developed markets.
Marketers, especially retailers, have had to create an entirely new playbook for understanding the China customer. Take Burberry, which entered the China market in 2011 and was surprised that its fans were far younger than in other markets. The fashion label embraced a younger, hipper look and feel. They altered store layouts, outfitting them with digital signage and tools. While other Western luxury brands have been shunned by the Chinese for being too “flashy,” Burberry appealed to its new customers for being fresh and modern.
Alibaba is doubling down on mobile commerce.
Alibaba Group, a leader in China commerce and owner of platforms such as Taobao, has made clear that it wants to be accessible across classes and geographies. In rural areas of China where citizens can’t afford expensive computers and laptops, Alibaba is partnering with China Telecom to sell smartphones at prices as low as 299 RMB ($48 USD). This is Alibaba’s smart tactic for creating roots deep in China, tapping into an estimated 460 billion RMB (16 billion USD) in ecommerce potential from rural customers. And while Alibaba has set its eyes on smaller Chinese cities first, it won’t be long before Alibaba takes on Western markets.
388 cars were sold on WeChat in three minutes.
The sheer size of the Chinese ecommerce market is breathtaking. Last August, on social app WeChat, Smart Car held a flash sale selling 388 cars in just three minutes. Americans in contrast would be hard pressed to buy cars online. This jaw-dropping stat is as much about the propensity for the Chinese consumer to purchase online as it is about the ease of ecommerce through WeChat. The technology that powers Chinese ecommerce at this scale is unparalleled in the West. Amazon, eBay and Apple better be studying up.
Shopping doesn’t start on search engines, it starts on TMall.
TMall sales are estimated to account for 80% of all online purchases, and increasingly those purchases are being made on phones. Platforms like TMall are compelling for a couple of key reasons. First, every Chinese user’s financial information is interwoven into the experience, making purchase super easy. Second, it’s integrated: Rather than the typical journey that starts with an online mall and then a click-over to a separate website with an unknown shopping cart, it’s all in one. This is indeed built for mobility and the Western user is coming around at a far slower rate. In the U.S., 22% of all mobile-phone users had made some kind of mobile payment during the year, with the most common type of payment being online bill pay followed by online or in-app purchases, according to a Federal Reserve report from March 2015.
Double 11 is 357% bigger than Cyber Monday.
November 11, or 11/11, is “Singles Day,” China’s version of Cyber Monday for online shopping. Last year’s Singles Day smashed all records in online sales, generating a whopping $5.7 billion. That’s more than triple what U.S. sees on Cyber Mondays, which traditionally kicks off the online holiday season. To handle all of the demand, Alibaba said it has built or renovated more than 150 distribution centers, and prepped 20,000 computer servers to handle peak shopping traffic. During the first minute of Nov. 11 last year, 10 million people visited Alibaba’s Tmall.com.
Social shopping in China demands accountability from retailers.
Quite clearly, the Chinese consumer is much more apt to be social around their purchase behaviors. A Nielsen survey in September 2014 found that 40% of online shoppers in China would be happy to share their shopping experiences and pen product reviews through WeChat or other types of messaging tools. Simply put, they are creators of content. Their Western counterparts are less so – only about 1% of Western users will create, blog, or review – whereas most in the West are spectators versus creators. The Chinese economy is built around this. Retailers can literally disappear from the listings based on poor store reviews.
Studying social commerce trends in China is enlightening — and something that all Western marketers should take more seriously. For Chinese consumers, the desktop is old-school, while in the U.S. it remains the dominant mode of making a purchase. Their mobile behaviors could help signal the type of apps and services for phones that Western marketers need to make available to keep consumers engaged. And while not all of the behaviors will transfer culturally from China to the West, the e-commerce platforms will, so learning as much as we can about them know is critical.
This article is by Chris Bowler, global VP of social media, Razorfish.