Chinese spend about 3 hours on their phones for social networking and for shopping. China has become, over these years of development, a very connected society. Digitalization is gaining more and more ground and consumers, like brands, have to adapt to this change. This article will provide you essential information about e-commerce in China, mobile payment, online strategies and KOLs (Key opinion leaders). To get more help on business development in China, click here.
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Chinese are addicted to their phone? Yes obviously, but…
You have to keep in mind that a lot of things need the use of the phone. Consumers are nearly guided to do everything on it. Online payment applications and systems are continually developing in China to enable a better use, and they are adding more functionalities. I invite you to keep reading in order to know the expansion of mobile payment in China.
Different kinds of e-commerce platforms in China
The e-commerce platforms are numerous and tend to be refined more and more in China.
- In the food sector, restaurants choose to collaborate with delivery applications: E le Ma, Meituan, Dianping etc. They also offer discount coupons to their users in order to attract and keep them on their platform. In fact, consumers are turning more naturally to these applications, instead of going to the restaurant’s website. These applications bring a lot of choices and standardize the way to order for all restaurants.
- For everyday products, we can find two main types of e-commerce platforms: there are applications like Taobao, Pingduoduo on which we can find a very wide range of products. On the other hand, for imported product, platforms like Kaola.com, Tianmao, JD.com / marketing-analysis / tmall-yihaodian-and-jd-guide-from-platforms-e- trade-in-China are the most used among Chinese consumers (they trust on products sold on these platforms).
- In the field of clothing, some apps have a better reputation among consumers than other. Weipinhui (vipshop.com) is known for selling better quality products and providing good after-sales services.
In 2017, 77% of payments were realized through mobiles in China
China is the world’largest connected country that are using mobile payment in the world. Mobile payment has clearly revolutionized the way to consume in China. Any type of transaction can be made through mobile (ticket purchase, telephone fees, house rent, shopping, restaurant …). Economists are talking about “Cashless Society” to describe the current situation of China, most of Chinese in the first and second tier cities don’t use cash anymore.
The advantage is that everything become easier and go faster. It is possible to order at any time, and for everything (even for a beverage). The need and desire of consumption can be satisfied almost instantaneously, because the service of delivery and product exchange in China is very efficient. From the little fruit merchant to the big shopping malls, all have adopted this payment system.
As a result, the rate of consumption in China reached and kept a high level. The fact to purchase even became a habit. There are also Chinese words created to describe this tendency too excessive of consummation : 剁 手 党 duo shou dang. “Duoshou” literally means “to cut one’s hand”, the word describes those people who buy too frequently. After this aside, let’s get back to our mobile payments.
Leaders of the mobile payment: WeChat and Alipay
Wechat pay is a mobile payment method included in the Wechat platform, a multi-function application, widely used in China which is even expanding abroad. For Alipay, as it comes from the group Alibaba Mayun, it gives him an important market share. Alibaba Group is present in many sectors in China (such as e-commerce, online games, music industry, online computing…) consumers are led to use Alipay on many occasions. WeChat Pay and Alipay have respectively 48% and 52% of market share.
Applications are developing their own payment way
To get rid of WeChat Pay and Alipay’s influence, a lot of applications are setting up their own payment system. For U Zhangghui and MeiriYouxian, two popular shopping apps, they propose users to recharge money on their account directly through their bank account. In this way, at the time of payment, besides to pay via WeChat or Alipay, they can choose to pay via their application account. Of course, this comes with benefits, like coupon of reduction.
How can the e-commerce boost sales ?
Stores and physical sales areas allow to organize products in an elaborate way to attract the eye of the consumer and to arouse the desire to buy. Then, we could wonder if e-commerce will be able to have this possibility, or even doubt its effectiveness. In China no doubt on e-commerce, it is certainly THE way to sell.
E-commerce is a more accessible shopping channel for consumers. Because of the high pace of life, Chinese are often seeking to maximize their time. E-commerce is a mean that offers them the opportunity to acquire any kind of products and services by staying where they are.
E-Commerce provides reductions, promotions and « connections »
It is not uncommon to see promotions on the internet. They can attract new customers to brands that are not well-known. However, connections and reductions are notions which need more explication, we will see that.
E-commerce platforms seek to attract the largest number of users and consumers. For this, it is common for companies behind these platforms to offer discount coupons to consumers. For example, on Vip.com (the application “Wei pin hui” in Chinese) there are often discounts like: for 199 yuan of purchase on a selection of items, a reduction of 100 yuan will be applied. It is possible to combine products of different brands for this type of reduction. In this way, the consumer navigates through the platform and go deeper to search products. He is guided to discover products from different brands and invited to enter this brand’s store established on the application. To benefit from the best online deals, consumers have to invest more time on these platforms.
E-commerce is present in different ways into activities and events. For example, Victoria Secret had set up an e-commerce system during its annual parade. While users watched the parade online, they could order the products presented on the show directly via a juxtaposed platform.
E-reputation is the main concern of brands
By the way, consumers are less confronted to sales persons in their shopping journey. They choose, and prefer, to learn information from the internet forums before their purchase. E-reputation has become an essential element for brands because Chinese consumers take into account the comments of other consumers.
Moreover, the competition is quite important on many sectors in China. It is strongly advised to the brands to manage an online presence in their strategy. To see things on the bright side, e-reputation can also contribute to brand’s advantage. For brands who are less-known in China, being recommended on the web, or being visible can generate a lot of leads and customers.
Today, it is not only consumers who go to the products, products are also brought in front of them.
Kols collabore with brands in China
Kols and Wanghong, who are them ?
In China, Key influence leaders (KOLs) also include wanghong (网 红). They are well-known persons on the net. How ? through a lot of possibilities. People can become Wanghong because they are fun, because they were part of a publication that made a buzz on the internet, because they created some interesting contents, or even only because they have a good appearance. For example, some persons have become known by publishing comic videos through entertainment apps / douyin-app-moment and social networks, others by their singing talent (汪 苏 泷 is a singer today in China, and he started on the web).
How can kols be helpful for commercial activity ?
These influencers are highly sought after by brands. As they usually have a lot of followers on internet, brands can work with them to maximize the efficiency of their promotion but also quickly gain consumer’s trust in the Chinese market. Many Wanghong also have their own business (often an online store) that runs through their community of fans. For most of the time, the ones who are the most affected by KOLs . They are the most connected among chinese online users and they represent followers of the latest trends. Active, but also responsive, these people tend to share all the interesting content in their network, including bad buzz.
Being Wanghong has almost became a profession in China. It is becoming more difficult for companies to find the right KOL. On the one hand, the person chosen must suit to the image of the brand and what the company wants to achieve in its promotion. On the other hand, the most influential KOLs have also a more higher price. The investment does not always guarantee expected results. It is important to clearly define the objectives of the collaboration and to find the right person. I invite you here to read our article on “How to leverage Chinese Kol for e-commerce ?“.
Taobao collabored with 办公室小野(Chinese Kol) and reached an audience of 200 Million people
“December 12th” (“双 12” in Chinese, meaning double 12) is a commercial event by Taobao’s platform, launching every year. It can be compared to the Black Friday, where consumers expect to have a lot of promotions and got ready in advance to make their purchase that day. We note here that commercial dates are very numerous in China. The shops and brands present on Taobao can request to participate in the event. In this way, their visibility will be increased in that day and their products will be better promoted.
Last year, at the occasion of December 12th, Taobao collaborated with 办公室 小野(Ban gong shi xiao ye, the girl on the right) to make a radio program named “Ha li lu ye ye”. The show consists of interviewing other well-known people (including Wanghong) on the subject of food, and inserting at the same time recommendations about various products. For 8 consecutive days, this show remained in the top of research on Taobao, creating more than 200 million views and relayed over the internet more than 100 million times.
Gentlemen Marketing Agency
Hoping that this article gave you some inspiration for the business in China, thank you for your reeding. Now, if you have a project to promote in China, do not hesitate to contact Gentlemen Marketing Agency;). We are a digital marketing agency specializing in the Chinese market, where e-commerce is part of our know-how.
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