In this month's issue, we look at a rather wonderful example of gamification by WHSmith, consider whether crowbarring lofty ideals into products is always such a good idea, and highlight the importance of having an innovation strategy.
Chinese consumers online are typically young, tech-savvy and predominantly mobile-based. They are also notoriously fickle and, if UK retailers want to succeed in engaging with them, they must nimbly adapt and adjust digital marketing strategies regularly to predict and stay ahead of the latest trends.
Online shopping came later to China than the West. It coincided with a huge uptake of smartphones and mobiles rapidly became the preferred shopping device. Latest research from the Bank of China reports that the country now has the world’s largest m-commerce market, with transactions estimated at £1.4 trillion. Furthermore, more than 64% of online purchases are made via mobile, ten per cent more than in the UK.
Chinese consumers online – youthful demographic
Three-quarters of online consumers in China are aged between 26 and 40. Predominantly middle class and female (75% according to Alipay), this youthful demographic is driving the technological trends of digital marketing in e-commerce, for both Chinese and overseas retailers.
The ‘super app’ WeChat has provided the ultimate gateway for retailers to reach consumers via their smartphones and enables them to build mutually beneficial relationships with customers via their official accounts. A combination of online browser, messaging app and social media platform under one virtual roof, it has been described as ‘life’ – with 700 million users shopping, paying and searching over 10 million internal apps.
Despite being a fiercely competitive market, retailers are cleverly fighting for market share by creating digital marketing strategies on WeChat that are both dynamic and agile. Retailers can use their account for a range of activities, from the promotion of news and special offers to incentivised brand activities, customer engagement, loyalty building and payments. It’s a proven business model, both for Chinese and overseas retailers.
For example, within 24 hours of launching a 30% discount on selected skin care products via its WeChat account, online beauty company Feelunique received 4,500 views.
Although these sorts of tried-and-tested campaigns can produce great results, customer acquisition strategies are beginning to shift as consumers become more selective in their shopping habits.
Enter the influencer
Countless KOLs (Key Online Influencers) including experts, celebrities and professional bloggers, have built up vast virtual communities of consumers with like-minded interests, lifestyles and shopping behaviour on social media in the past 12 months, most notably on the micro-blogging site Weibo. By establishing relationships with these trendsetters, retailers can build brand presence and enhance their own impact as an expert within the Chinese market.
Bodyguard Apotheke, a German retailer which specialises in healthcare products, recently created a celebrity of its own CEO when it held a live-streaming campaign offering free gifts and coupons to celebrate his birthday. The campaign was an immediate hit, attracting more than 9,000 views and resulting in 400 orders in the first 60 minutes.
The Chinese love new technology and live-streaming has become a huge trend in the past 12 months, driven by demand among millennials who crave interactive, real-time content. Alibaba’s Taobao and its rival JD.com, two of China’s largest online shopping sites, have both even launched their own live-streaming platforms. Retailers and brands can hire popular livestreaming hosts with large fan bases to help promote their products while a ‘Buy Now’ link hovers on the same screen. The concept has been adopted by thousands of amateur livestreamers too, looking to jump on the bandwagon and earn extra cash by promoting everything from cat food to cosmetics.
This shopping-meets-entertainment trend can certainly generate plenty of engagement, but there’s no solid proof so far that this traffic converts into transactions. Even the eight-hour ‘See Now Buy Now’ live-streaming fashion show featuring 80 global brands is generally perceived to have been more of a PR stunt than a commercial exercise. As the novelty factor wears off, it’s likely that live-streaming will evolve into a more traditional infomercial format, and become a credible but costly marketing device.
As for VR, the technology is still immature and is likely to take up to seven years before there is a mainstream and usable e-commerce VR commerce platform. That said, Alibaba, along with numerous Chinese technology companies, are investing heavily in developing better, more user-friendly hardware and, once they have, brands will need to focus on creating good quality content. This will happen and eventually people will be using VR in the same way as the mobile phone.
Next generation e-commerce
The Chinese market is evolving fast and it would be wise to think beyond the e-commerce platform to a new landscape in China where online and offline commerce converges. The ecosystem is expanding and we are seeing a developing trend for shopping tourism, where customers come to the West to purchase products they’ve heard about online at home. These shoppers are discerning, too. It isn’t simply about buying luxury items, but carefully selected, niche products. Retailers should encourage this omni-channel development in their marketing messaging, such as special offers for in-store purchases.
Regardless of the changing popularity of each platform and channel, understanding customers’ habits and how to use different channels effectively to ensure sustainable growth is the key to creating a successful marketing strategy.
At the start of 2017, the Chinese president, Xi Jinping, gave a speech where he claimed that China would import $6,500 billion worth of goods this year. This is an encouraging signal for retailers that are poised to adapt to the ever-changing trends and tastes of Chinese consumers.
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