Maverick management and leadership styles have emerged in China as a result of the country’s hypercompetitive market, rapid industrial and digital transition, enormous consumer base, massive labour force, advanced manufacturing infrastructure, and ability to adapt to practical and economic difficulties. 

China’s situation and strong desire to improve its business, economy, industry, and digital skills put it in a position where digitally enhanced directed autonomy (DEDA) could grow, resulting in some fascinating management structures.

As management changes, worker freedom becomes more of a focus. Some Western companies have given workers more freedom and less control, but this way of doing things often doesn’t take into account the role that technology and digital platforms can play and can lose sight of business goals and metrics. 

DEDA gives employees more freedom through digital platforms that let them organise themselves around business targets without direct help from managers. It gives front-line employees direct access to a company’s resources and capabilities, changes based on the situation, keeps an eye on how much freedom employees have, and has clear, measurable goals.

Haier’s Rendanheyi model

Haier, a Chinese refrigerator company, began in the 1920s as a Qingdao factory. It became a state-owned enterprise in 1949, but faced debts and poor management. Zhang Ruimin, an assistant city manager, took over in 1984 and focused on product quality. After partnering with Liebherr, Haier became profitable and globally known, with Zhang as chair and CEO.

Haier’s Rendanheyi, developed under Zhang, integrates producer and customer goals, promoting agility, entrepreneurship, creativity, and innovation. The company consists of self-managed micro-enterprises, each acting as a startup with access to company resources. Teams pursue defined business goals based on customer needs or market gaps. Single-threaded leadership is used in these micro-enterprises, reducing bureaucracy and administrative distraction. Such an approach has been used at Amazon for some time. 

Decentralized leadership in Haier emphasizes coaching over commanding, affecting compensation and hiring protocols. After Haier acquired GE Appliances in 2016, Chief Technology Officer Kevin Nolan was promoted to CEO, focusing on products rather than profits. Haier also changed its hiring process to attract entrepreneurial people. 

The company’s latest update is ecosystem micro-communities (EMs), which are groups of small business units that use contracts to determine rights and responsibilities. An example of this is two Haier refrigerator sales micro-enterprises in different cities forming an EM, offering zero-defect, zero-delay products. They agreed to jointly earn 140,000 RMB for meeting their goal plus a 20% profit boost, and 230,000 RMB for exceeding it by 30%. They ended up exceeding by 30% and got their larger incentive.

The digital middle

Companies in the West have traditionally had a middle management layer that connects top decision-makers and other departments, facilitating access to major corporate assets like archives, databases, warehouses, and logistics. 

However, in some companies in China, this middle layer has been replaced by digital platforms that provide more open access to corporate resources and tight monitoring of project progress for smaller teams. The structure consists of customer and partnership interfaces on the front end and assets like databases, warehouses, and manufacturing plants on the back end. 

Alibaba has honed its middle by focusing on its digital middle office, zhongtai, led by the group CTO. This platform is maintained and developed by cross-functional teams, catering to over two million merchants across hundreds of businesses. It is linked to other Alibaba tools such as Alipay, Alibaba Cloud, Cainiao, and project management service DingTalk, enhancing its flexibility and agility.

Ping An’s difficult transition  

Ping An, founded in 1988, was the most valuable insurance group globally in 2020. The company transformed from a financial services firm to a technology ecosystem, incubating 11 affiliates across five verticals with cloud-based IT systems. The market value of Ping An has increased by over 400% since 2013. 

The founder and chairman, Peter Ma, saw the rise of technology and tech companies like Alibaba and Tencent, and the increasing assessment of corporations on a wider range of assets, including data and intellectual property. 

In 2013, Ping An moved 80% of its proprietary IT systems to the cloud when few other corporations were doing so, with MIT graduate Jessica Tan managing the transition. The company implemented advanced data analytics across businesses through its own cloud. It took time and was painful but ultimately paid off in the long run. 

Ping An also took an ecosystem and incubator approach, focusing on efficiency and market trends. OneConnect, a fintech spin-off, served all of China’s major banks and more than half of China’s insurance companies, and was valued at $7 billion in 2019. Ping An incubated 11 affiliates like OneConnect by sharing talent and experts, incentivizing entrepreneurship, courting third-party investment, and enabling autonomy and entity-specific KPIs.

Applications by Western brands

Western companies have successfully implemented management approaches that emphasize teamwork, focused goals, and team incentives. Continental Airlines, for instance, offered employees a $60 monthly bonus if their scheduling performance ranked among the top five US airlines. Bayer, a German pharmaceutical company, implemented incentives in China that combined money and social rewards, with staff sending thank you messages on their digital platform. These programs can help increase team unity and focus, ultimately improving the company’s bottom line.

New corporate management paradigms emerging from China demonstrate the power of customer focus, an entrepreneurial approach, digitization, data-driven decision-making, open innovation, employee-centricity, and experimentation. 

Ashley Dudarenok is the author of Innovation Factory: China’s Digital Playbook For Global Brands.

Social commerce is set to grow at an exponential rate over the next two years. Even while the growth of the social commerce sector has so far been slower elsewhere than in China, it is anticipated that from now until 2025, it will expand tremendously in North America, Europe, and Latin America.

This year, it’s anticipated that social commerce will generate global sales of more than $1 trillion. And when it comes to social commerce, China is the market that stands out. Social commerce has expanded rapidly in the country, with a 40.25% increase in market size between 2021 and 2023. Between 2021 and 2025, the size of China’s market is anticipated to increase at a rate of 17% per year. 

It’s critical for brands and businesses to keep ahead of these changes given the growth of social commerce. Alarice and ChatLabs have collaborated together to create the China Social Commerce Report 2023, which provides information on the technologies and strategies used in the sector. Here are some of the key strategies highlighted in the report.

1. Co-creating with consumers

Brands can engage users on social media platforms by allowing them to interact or co-create engaging content as part of an effective strategy for increasing product promotion and awareness. This technique not only creates a user community but also increases brand visibility and engagement.

Take, for example, the milk brand Yili. Yili asked consumers to participate in a packaging design contest aimed at football enthusiasts to increase engagement and sales during the 2022 World Cup. Customers who spent a particular amount on items were entered into a lucky draw as part of the promotion. 

As a result, visibility and sales increased significantly. The campaign received over 27.24 billion Weibo impressions and resulted in a 12.1% increase in sales, illustrating the potential of user participation and co-creation in brand promotion.

In light of this, fast-moving consumer goods brands can consider employing similar techniques by inviting consumers to co-create content during popular events, festivals, or marketing campaigns. This could involve a wide range of activities that tap into the creative potential of the consumer base.

2. Driving repurchases through professional services

In the competitive landscape of the consumer goods industry, brands can distinguish themselves and foster customer loyalty by offering specialized services aimed at driving secondary purchases. This strategy not only ensures customer satisfaction with their initial purchase but also encourages them to become repeat customers.

A case in point is Biostime, a brand that successfully implemented this strategy. Biostime offers a one-on-one inquiry service, providing consumers with personalized product recommendations based on their unique needs. Beyond product recommendations, the brand also prioritizes its consumers’ emotional support and mental health. 

Their unique offering, the “Mom Class,” is designed to provide emotional support to new mothers, further solidifying their bond with the brand. Furthermore, Biostime launched a campaign on Douyin focusing on ingredient safety, which attracted around 800,000 participants. These combined efforts led to impressive results, with monthly sales exceeding 4 billion RMB.

Given the success of Biostime, other brands can look at implementing a similar strategy by offering professional services post-purchase. These services can range from personalized product recommendations to educational classes and support groups. Brands can also launch campaigns to emphasize the unique selling points of their products, such as ingredient safety or ethical sourcing.

3. Collaboration with other brands

Brands may reach a bigger target audience in the ever-changing consumer products landscape by forming strategic partnerships with other popular brands and products. Such collaborations not only increase brand visibility but also give consumers a distinct value proposition.

The successful collaboration between Xiaomi and the video game King’s Glory exemplifies this method. Xiaomi took advantage of cross-promotion by providing exclusive access to a new test map in King’s Glory, which was confined to smartphones purchased from Xiaomi outlets. 

This endeavor piqued gamers’ curiosity, as did Xiaomi’s powerful hardware and processors. As a consequence, store traffic increased by 14%, and Xiaomi’s gaming community and App Store gained 2 million new followers.

Given the success of the Xiaomi-King’s Glory collaboration, marketers should think about forming similar collaborations with stores to expand their reach and engagement. They can provide exclusive material or experiences available only through their products or stores. 

Conclusion

It’s essential to remain ahead of new trends as we navigate the always-changing social commerce landscape and consider their effects on your company. In the present economy, being aware of these trends and taking appropriate action might mean the difference between keeping ahead or falling behind.

It’s crucial that businesses consider how to create shopping experiences that allow users to effortlessly switch between exploring, sharing, being entertained, researching, playing a game, recommending, and purchasing.  

To attract their audience, brands must provide enjoyable, interactive experiences that cover a range of activities, including purchasing. Developing original retail tactics and designing personalized, one-of-a-kind client journeys will be crucial. 

This article was provided to TechNode by Ashley Dudarenok, the founder of China-focused digital marketing agency Alarice and China digital consultancy ChoZan 超赞. For further insights, download a free copy of the China Social Commerce Report 2023 here.

Social commerce is set to soar in 2023. The market is projected to exceed a staggering 1 trillion USD in global sales this year. A social commerce pioneer, China will continue to be a major driver of this growth. The country has witnessed a substantial expansion of its social commerce sector in recent years, with a 40.25% surge in market size from 2021 to 2023. 

While traditional e-commerce channels continue to command a significant 72% market share in China as of H1 2022, social commerce is quickly ascending, rising from a 14% market share in 2021 to 21% in H1 2022. This emergence of new sales avenues is changing the e-commerce landscape, prompting businesses to modify their approaches to remain competitive.

Given this growth, it’s crucial for businesses to stay ahead. Alarice and ChatLabs have partnered to produce the China Social Commerce Report 2023, detailing the sector’s technologies and strategies. This report can help brands apply lessons from China’s success to navigate the social commerce landscape effectively. Below are some of the key takeaways.

The 3 Social Commerce User Journeys

As of June 2023, China’s online population reached 1.079 billion, according to a statistical report released on August 29 by the China Internet Network Information Center (CNNIC). The figure represents an internet penetration rate of 76.4% and an increase of 11.09 million people compared to December 2022, according to the report. By June of this year, the number of instant messaging and online video users reached 1.047 billion and 1.044 billion, with penetration rates of 97.1% and 96.8%, respectively.

In light of these trends, content has emerged as a critical element in driving sales on social commerce platforms. Brands equipped with the right insights can craft engaging content and integrate seamless communication and transaction functionalities. Let’s explore the relevant social commerce user journeys that brands can learn from and implement in their strategies.

1. Enhancing user experience with shoppable content

Shoppable content is an approach that integrates purchasing opportunities directly into a brand’s digital content. This strategy transforms traditional browsing into an interactive shopping experience, making it seamless and engaging for users.

A prime example of effective shoppable content usage is the Douyin storefront of Guerlain, a luxury cosmetics brand. Upon entering the store, users interact with a host of dynamic features such as livestreams, membership deals, and engaging short videos with embedded product links. These elements are strategically woven into the user experience, transforming passive browsing into an active shopping journey.

Brands should test multiple social commerce platforms and prioritize those that demonstrate high growth potential and return on investment. Creating engaging and informative content that resonates with the identified target audience is also vital. This content, strategically embedded with shoppable elements and incentivizing Calls To Action (CTAs), can transform casual browsing into potential purchases. Moreover, enhancing user engagement and loyalty by offering special deals and memberships can further increase the likelihood of conversions. 

2. Engage with livestream shopping

Statista projects that by 2023, the livestreaming commerce market in China will expand to a staggering RMB 4.9 trillion (US$ 753 billion). To capitalize on this trend, brands need to learn how to effectively engage with customers during livestreams to drive both engagement and sales.

One brand that has effectively employed livestream shopping is Dior. Dior’s brand zone on Douyin begins with a livestream, ensuring that it is the first element that users engage with. During the livestream, users are just one to two clicks away from product pages, a list of showcased products, membership registration, and special offers. This setup ensures that the shopping experience is as seamless and engaging as possible.

Real-time interaction can significantly enhance the shopping experience, making it more personal and engaging for the viewers. After the livestream, it’s important to follow up with leads, offering them support and additional information about the products showcased. Responding to questions promptly and providing product promotions, limited-time discounts, and recommendations during the livestream can further stimulate customer interest and drive sales.

3. Personalize the shopping experience with shoppable chat

Shoppable Chat is a modern commerce strategy that integrates shopping capabilities directly into chat platforms. This approach, widely adopted in China, allows brands to provide personalised customer experiences while driving conversions.

Platforms like WeCom, WeChat, Weibo, and Douyin are critical tools for businesses in China, enabling them to engage with customers, increase sales, and offer personalized services based on a 360° customer view. Luxury brands such as Graff and Prada have made effective use of these platforms to enhance their customer engagement.

Prada, for instance, leverages its WeChat Mini Program to provide live customer support, offering personalized advice and recommendations. This includes features like checking stock in offline stores, making product recommendations based on the user’s current product of interest, and allowing users to purchase products directly through the WeChat Mini Program.

Brands should reduce reliance on third-party e-commerce platforms and prioritize platforms that allow them to own and control their data, such as WeChat and WeCom. Brands should ensure they connect users with sales agents based on the user’s location. This enables a more personalized and efficient service.

Conclusion

It’s important to stay on top of how social commerce evolves over time. In today’s market, being aware of and acting quickly on new trends can make the difference between being ahead and falling behind.

Companies need to design shopping experiences that make it easy to switch between different things like discovering, sharing, being entertained, doing research, playing games, getting suggestions, and finally buying.

To captivate their audience, brands should focus on creating engaging, interactive experiences that encompass a spectrum of activities, including purchasing. The development of innovative retail strategies and the design of personalized, unique customer journeys will be key.

This article was provided to TechNode by Ashley Dudarenok, the founder of China-focused digital marketing agency Alarice and China digital consultancy ChoZan 超赞. For further insights, download a free copy of the China Social Commerce Report 2023 here.

In 2022, the marketing goals of many brands focused on ensuring a more predictable growth. But to succeed in China’s changing digital landscape in 2023, investing in an overarching marketing strategy across all digital media and e-commerce platforms will not work. Instead, brands should focus on a few essential platforms and utilize new features on Chinese social media platforms. Marketers should “invest small and win big” for potential growth in uncertain times. 

Here are some highlights from the top social media platforms in China that may lead brands to the next stage this year from a recently released 650-page long 2023 China Mega Report by ChoZan.

Top 3 social media platforms with exciting new features to utilize in 2023

1. WeChat

WeChat’s ecosystem offers common functions like chat and payments, but its video section Channels and search engines can provide new ways for brands to enhance their digital journey. WeChat Channels usage surpassed Moments in 2022, while monthly active users of WeChat search reached 800 million with a 54% yearly increase in search volume. Brands can connect with consumers across digital touchpoints using WeChat’s function, building branding assets. A search for “red packets for CNY” can lead to various advertising and brand-owned channel sections. Jewelry brand CHOW TAI SENG has secured a single sales campaign hitting 5 million yuan revenue leveraging search function and live streaming. Brands must target secure events (like the Chinese New Year, Spring Festival, etc.) with large followings and utilize exciting WeChat tactics to form smoother digital journeys.

2. RED (Xiaohongshu)

RED (Xiaohongshu) is known for its authentic user-generated content, making it a great platform for word-of-mouth marketing. In 2023, RED updated its platform with a “video” section to create a more diverse community with more video content. The platform downplays sales and instead prioritizes creating a comfortable social atmosphere, making it unique compared to other sales-focused platforms.

Recently, Chinese actress Dong Jie’s livestream on RED delivered a sense of peaceful and soft-selling approach that differs from livestreams on other platforms. She has inspired many audiences to step back from the hustle and bustle of their life and slow down. According to RED official data, the viewers of her live streaming on Feb 24 exceeded 2.2 million and the cumulative GMV exceeded 30 million. 

By partnering with quality livestreamers and continuously delivering a unique brand vibe through stylish images and text, brands can further accumulate their digital assets and achieve long-tail effects. This kind of more immersive product seeding may turn more random customers into the brand’s loyal fans. 

Douyin

Douyin upgraded its “interest e-commerce” to “full-field interest e-commerce” in 2022, making refined management, creative livestream content, and beneficial partnerships with Douyin Shop vital in 2023. The platform’s traffic dividends are diminishing, with fewer users paying attention to random content. Consumers want unique, exciting, and convenient shopping experiences across various categories, taking the initiative to locate goods. In a fiercely competitive environment, brands must deliver high-quality livestream experiences to stand out.

A good example would be East Buy’s recent live streaming in the Greater Bay Area, which generated total sales of over 100 million yuan and more than 1.5 million overall transaction order volume. The brand was created by China’s education giant New Oriental and its success was due to its unique understanding of Chinese cultural experiences and audience’s emotional connections, offering a wide range of products including agricultural, food, and personal care.

Brands should continually explore creative ways to livestream on Douyin to impress customers. Leveraging Chinese cultural assets and aligning them with the brand can increase user stickiness and loyalty. Brands should also consider forming a closed loop by partnering with Douyin Shop.

Two niche Chinese social media platforms

Aside from the top three Chinese social media platforms, there are also a few niche platforms that brands can use in 2023.

Zhihu

For Zhihu, its approach prioritizes quality over quantity of content and is suitable for promoting high-cost goods like real estate, cars, education, and medical beauty that require informative and more in-depth content to guide consumers’ decision-making. Also, establishing a good content IP can help reach the target audience more precisely.  

Dewu

Dewu, a popular social media and e-commerce platform, began as a sneaker platform and evolved into an extensive marketplace. It attracted 7,000 brands, including major names like Michael Kors, Coach, and Adidas, who opened their stores on the app. Brands can utilize its various promotional tools like flash sales, group buying and coupons to attract consumer attention. 

Best Practices for Brands to Win in 2023 on Chinese Social Media Platforms

1. The emergence of WeChat Channels and search engine capabilities presents an unprecedented opportunity for brands to craft a more comprehensive and immersive digital journey for their customers. Brands should use these features for a more integrated customer experience, creating deeper connections with their audience.

2. The updated “video” section on RED offers brands a chance to create content that fosters community and emotional connection with customers, resulting in stronger brand loyalty and advocacy. Partnering with quality livestreamers and delivering unique brand vibes can create an immersive customer experience, turning customers into loyal fans.

3. Douyin’s upgrade to “full-field interest e-commerce” in 2022 highlights the importance of creative live-streaming content and beneficial partnerships. To stand out, brands must deliver high-quality live-streaming experiences that foster emotional connections with customers.

4. Craft compelling content that delivers consumer-centric information to drive engagement instead of being brand-centric. Collecting market data and analyzing consumer trends can aid in creating relevant content. Collaborating with KOLs/KOCs on platforms like RED and Douyin adds credibility via word of mouth and expands reach.

Any company looking to up its e-commerce game in China this year needs to adapt to the changing landscape. The industry structure has transformed, with new players like Douyin and Pinduoduo shifting towards mature e-commerce models and WeChat Mini Programs breaking e-commerce transaction volume records. COVID-19 and shifting consumer behavior caused online retail consumption to surge to 27% of total retail consumption in 2022, up 2.5% from the previous year.

The new “Big Five” (Alibaba, JD, Pinduoduo, Douyin, WeChat) competitive landscape emerged rapidly. Below are some insights from a 650-page 2023 China Mega Report by ChoZan about the changing e-commerce landscape in the country.

The new e-commerce landscape in China

China’s e-commerce landscape is rapidly evolving with the emergence of the new “Big Five” players – Taobao, JD.com, Douyin/Kuaishou, Pinduoduo, and WeChat. Each platform has its own unique characteristics and strategies to attract and retain customers.

1. Taobao, owned by Alibaba, has achieved full coverage of product categories, with a focus on clothing and beauty products. It has been introducing external anchors, including popular Douyin influencers, to boost live-streaming e-commerce sales. Taobao has also been expanding into industries with low penetration rates such as fresh products and automobiles while accelerating new product innovation.
2. JD.com, on the other hand, has returned to its low-price strategy, rushing into the “100 billion yuan subsidy” war, targeting Pinduoduo, with the aim of winning users with low prices. JD.com’s core categories remain home appliances and 3C products, but it has been increasing its investment in fashion and beauty categories.
3. Douyin/Kuaishou, both originally focused on live-streaming e-commerce, has now transformed into a comprehensive interest-based e-commerce platform with the addition of digital shelf e-commerce. Digital shelf e-commerce refers to the online merchandising and retailing of products in a way that replicates the experience of browsing physical store shelves. Douyin is more suitable for selling new and unique products such as clothing, underwear, and smart home appliances and is the main platform for brand promotion and new product launches.
4. Pinduoduo’s long-term strategy is focused on the agricultural sector, and the brand strategy is divided into two directions – attracting mature brands through investment and upgrading factories, and establishing their own brands through white-label or farm brands. The platform has achieved rapid growth through digital electronics and will focus on clothing and agricultural product categories in the future.
5. WeChat, owned by Tencent, has entered the high-quality content ecosystem competition in short video through Video Accounts, utilising social/private traffic to boost e-commerce. WeChat encourages high-quality, interesting, and useful video content, and connects advertising promotions with creator monetization needs. Its ecosystem of official accounts, mini programs, and enterprise WeChat can be integrated with video accounts, promoting repeat purchases. WeChat’s video live-streaming e-commerce primarily focuses on consumer goods such as clothing, food, and cosmetics, with an average order value exceeding 200 yuan.

Consumers plan to continue to spend more on the top five e-commerce platforms

KPMG’s 2022 year-end survey revealed that consumers intend to increase their spending on the Big Five platforms due to their expanded product options and enhanced shopping experiences. About 60% of consumers plan to boost their consumption on Douyin, while Pinduoduo ranks as the top choice for low-income groups.

Consumers’ willingness to spend is based on several sources. They are more rational spenders today, but purpose-driven marketing is indeed effective for them since consumers’ concern for their health and the environment is high. Additionally, convenience is another factor crucial for brands to connect with their target audience. On top of that, the changing social habits and increasingly in-depth services mean brands need to be flexible in social platforms and offerings to attract more consumers.

Top 5 ways brands can respond to the changing e-commerce landscape in China in 2023

1. Adopting an overall e-commerce strategy and repositioning flagship stores on Douyin and Pinduoduo

E-commerce platforms need to adopt a comprehensive layout and reposition their flagship stores on Douyin and Pinduoduo. Douyin is focusing on developing its digital shelf e-commerce, while Pinduoduo is leveraging its advantage in high-frequency consumer goods categories to become a comprehensive platform that meets diverse needs. For brands, as the digital shelf e-commerce landscape becomes evenly matched, Douyin/Pinduoduo flagship stores will play an equally important role as their Tmall/JD flagship stores.

2. Building a stronger cross-platform synergy and seizing the opportunity to enhance bargaining power with e-commerce platforms

As e-commerce platforms become increasingly mature, the overlap of their consumer groups will inevitably continue to increase, making it more difficult to expand user increment. However, it is a good opportunity for brands to increase their bargaining chip with e-commerce platforms in terms of traffic, product promotion, and consumer data transparency. Stronger cross-platform collaboration between brand and e-commerce platforms is worth exploring on both sides, especially in category differentiation, pricing, and promotion.

3. Reducing the reliance on livestream e-commerce influencers and strengthening content co-creation

The role of e-commerce live streaming, especially influencer live streaming, in “transactions” will be further weakened. Most influencers may find that selling standard or common products are losing their appeal to the public. Influencer live streaming will reach a critical crossroads, and influencers will need to attract consumers through better content. Currently, “selling-only” influencers who lack content will lose their competitiveness and gradually be phased out. Patterns may emerge where common goods are sold more through digital shelf e-commerce and influencers will focus on more niche products with strong digital content potential like trendy goods.

4. Developing innovative supply chain solutions

Innovative supply chain solutions such as direct sourcing and supply chain financing can help brands reduce costs and improve efficiency. Brands need to optimize their organizational structure, develop cross-platform e-commerce capabilities, accumulate universal key capabilities to support multi-platform development, and lay a foundation for other e-commerce models with future development potential, such as instant retail.

5. Improving consumer experience through data analytics and personalized marketing

Brands need to use data analytics and personalized marketing to improve the consumer experience. It can help brands better understand consumer behavior and preferences, and provide tailored products and services to meet their needs. With the convergence of platform models, the profit levels of brand flagship stores on various platforms are expected to gradually converge. In order to improve efficiency, brands need to optimize their organizational structure, develop cross-platform e-commerce capabilities, accumulate universal key capabilities to support multi-platform development, and lay a foundation for other e-commerce models with future development potential, such as instant retail.

Conclusion

To succeed in 2023, brands must adapt to emerging e-commerce platforms and changing trends. New players are continuing to emerge and grab a share of the existing market. Each platform emphasizes different aspects of marketing, including product pricing, content, and product categories. Brands need to understand these nuances and tailor their e-commerce strategies accordingly to effectively engage with their target consumers and drive sales.

Before establishing a presence on e-commerce platforms, it is important to understand the target consumer group and their profiles.

China’s society is aging fast. According to the latest census data, released in May, 264.02 million people in China are 60 or older. That’s 18.7% of the population. There are 190.64 million people 65 or older, accounting for 13.5% of the population. Life expectancy in the country has also increased. 

Taking into consideration the number of people over 50 and the slowing birth rate, it will be crucial for companies to pay close attention to the needs of the silver-haired generation in the coming decades. They have savings; they want to improve their own, their children’s and their grandchildren’s living standards; and the consumption channels they use are increasingly digital.  

People who grew up without credit cards or internet banking are now using their phones regularly to both make and receive payments, pay bills, hail taxis, shop, and purchase property. 

Digital literacy plans 

As of June 2020, only 10.3% of internet users were 60 or older, according to the China Network Information Center. More than 60% of people over 60 in China do not use the internet, but surveys show that they have a strong interest in digital services for shopping, entertainment, socializing, accessing healthcare services, and staying connected with their family members. To bring more seniors online, the Chinese government has asked websites and apps to redesign themselves to be more senior-friendly through modifications like bigger fonts and deleting pop-up ads. 

A profile of the digital silver generation 

China’s silver-haired generation is often perceived as traditional grandmas and grandpas who find tech incomprehensible, but those that are online are some of China’s most committed users. 36.69 million over 60s have a high school education or higher, and some already rely heavily on their mobile phones, using  mobile apps at least five times a day. Elderly internet users start using apps and surfing on their mobile phones at 5 a.m.-7 a.m. (link in Chinese). The influx peaks at 9 a.m. before dropping. Qutoutiao also reports that the average daily usage time of those over 60 is 64.8 minutes per day, which is 16.2 minutes longer than users over 40, and that they tend to stick to short video platforms. 

Silver-haired internet celebrities 

There are more and more older influencers and wanghong—people who are “internet famous” and focused on commercial activities and marketing. 

A recent Questmobile study shows that the ratio of influencers (who are usually called key opinion leaders/KOLs in China), older than 46 was 11.4% on Douyin, 10.2% on Kuaishou, 9.1% on Weibo, and 8.4% on Xiaohongshu.

One example is Grandpa Kang, who goes by kangye1937 on TikTok, Douyin, and Instagram. He became very popular on Douyin (China’s internal version of the app) and TikTok (the international version of the app), showing his fashion sense and how older people enjoy life in the big city. 

Screenshots via Douyin © @Kangye1937

Silver-haired wanghong are also live streaming. “I am Grandma Tian,” has gained 33.37 million fans on Douyin and achieved sales of 1.5 million RMB in her live broadcast debut in May last year (source in Chinese) selling primarily snacks and drinks.

Screenshots via Douyin © @tlaolao

Another example, “Grandma Wang,” a popular older influencer who specializes in skincare products, says she “only wears high heels.” She achieved sales of 5.3 million RMB in a single live broadcast.

Screenshots via Douyin © @wnn111111

Covid-19’s effects on shopping 

Due to Covid-19, elderly people found new ways to shop for fresh groceries. According to Deloitte, 25.4% of the new users for fresh grocery apps during the Lunar New Year, 2020 were 41 or older. Fresh grocery shopping app MissFresh (Meiri Youxian) found that its users over the age of 40 increased by 237% (source in Chinese), and that 90% of these older users surveyed were doing mobile grocery shopping with the help of their children.

This has accelerated online shopping becoming a habit for some in the older generations. According to CBNData and Age Club (source in Chinese). The number of over-50s shopping via live e-commerce is increasing year by year, and more than 60 million middle-aged and elderly people are making purchases during live streams. On Taobao, 24% of users were born in the 1970s or earlier, and there are about 1,000 Taobao Live broadcasts every day aimed at the middle-aged and elderly market.

Older users are mainly attracted by low prices and good deals, according to the study. 18% of middle-aged and elderly people say they feel lost if they don’t get good deals during live broadcasts. That’s why they tend to engage during live streams and share links with their children. 

Digital products and services for the elderly 

Even before Covid-19, China was increasing its use of technology for services for the elderly. For example, the facial recognition app laolai.com was used by the government to confirm identities and social security payments for the elderly. Laolai also has an official WeChat account to help seniors get important information about digital services. 

Screenshots via 老来网 laolaiwang

WeChat also introduced helpful features several years ago when tech giants were encouraging users to use family accounts to help older family members and arranging courses to teach older people how to use apps and shop online. There are also special apps that combine these kinds of services like one called Oba (translation: “Dad”).

 Screenshots via 偶爸 Ouba

The need to cater to the needs of seniors is also being mandated. In February 2021, the Ministry of Transport ordered that major ride-hailing companies like Didi, Dida etc. upgrade their apps to make it possible to hail a taxi with just one click.

We’ll see in the next few years how China’s digital space transforms to meet the needs and interests of elderly people and how marketers pay attention to their online lives. They have very strong purchasing power, so brands need to keep up with grandma and grandpa.

Spring Festival, or Chinese New Year, is right around the corner. As the biggest holiday season in China, it has always been one of the biggest consumption periods for many industries. But this year’s Spring Festival, which will begin Feb. 11, is going to be a little different, as millions of people are canceling travel plans as Covid cases rise. When my team and I took a look at the data on consumers’ plans from our quarterly Mega Guide to China E-commerce and Marketing, we found that spending is likely to remain strong, while continuing the shift to online purchases and livestream we saw last year.

Spring Festival spending usually consists of two types: holiday products for the home, and gifts for friends, relatives, and business contacts. The first type is more stable year-to-year, and mainly means buying food and drinks to serve visiting relatives over the holidays. The second type is more flexible, and products can vary depending on the type of relationship between the gift sender and recipient. Consumers typically opt for more practical gifts for close friends and relatives, while going for upscale products with nice packaging for business partners.

What happened during Spring Festival 2020?

The 2020 Spring Festival was spent in the shadow of the pandemic. Chinese citizens were advised to stay home and minimize social contact. Traditional visits to relatives and family gatherings were discouraged. As a result, online behavior and consumption were more active than ever last Spring Festival. An increasing number of netizens went to digital channels and platforms to acquire pandemic-related information, purchase products, and entertain themselves. The total duration (in Chinese) of online activity for all internet users grew from 5.06 billion hours per day on Jan. 14, 2020, to 6.11 billion hours per day on  Feb. 4, 2020. The ratio of time spent on short video platforms also grew from 11.8% during 2019 Spring Festival (Feb. 4-10, 2019) to 15.2% during 2020 pre-Spring Festival (Jan. 2-8, 2020) to 17.3% during 2020 Spring Festival (Jan. 24-Feb. 2, 2020).

(Image credit: ChoZan; Data: QuestMobile)

What can we expect for Spring Festival 2021?

After a recent spike in Covid infections, the government has advised citizens to minimize unnecessary travel to prevent the spread of the virus. Many are following the advice to “spend the holidays where you are” (jiudi guonian). For instance, Anhui Province asked migrant workers who work in other provinces and cities to spend the holidays in the place where they work. 

While this Spring Festival may not look much like the pre-Covid glory days, the holidays this year will at least be more optimistic as China has accumulated a year of experience fighting against the pandemic. The Ministry of Transport predicted there would be about 1.7 billion trips made nationwide, which was 40% lower than in 2019 but still 10% higher than last year.

Domestic tourism will look different this year: Consumers are also showing different travelling patterns compared to previous years. As of Jan. 25, the average cost (in Chinese) of plane tickets on local online travel agency Qunar during the Spring Festival was RMB 651.36, about RMB 200 cheaper than in 2019. Ticket prices for traditionally popular routes are even lower. Usually sold out, holiday plane tickets from Beijing to Sanya, Hainan, are as low as RMB 610 on some platforms. While the demand for plane tickets has cooled off, staycations at local B&Bs and hotels are picking up. Hotel bookings for New Year’s eve grew 30%. Shanghai, Guangzhou, Chengdu, Shenzhen, and Chongqing were among the top cities with the most hotel bookings. 

Spending intent is still high: Consumer sentiment is also looking promising. While some may choose not to return home this year, they are still purchasing products on e-commerce channels both for personal use and as gifts. Experts predict that the food and beverage category will soar in Q1 2021. Data from the first day of Tmall’s pre-Spring Festival sales campaign shows that edible items such as dried fruits, confectioneries, and Chinese pastries are still the best-selling items, although sales of single person instant meals (in Chinese) grew 15-fold to become the category with the most growth on the platform. Ada Yang, Head of Social Community at Pinduoduo, told ChoZan that she sees great potential for the sales performance of quality agricultural products, local brands, and imported products during the holiday season as Chinese citizens visit and present gifts to each other during the Chinese New Year holidays.  

Like 2020, live streaming remains key to pre-Spring Festival promotions: Douyin ran pre-Spring Festival promotions from Jan 4. to Jan. 20. Celebrities, influencers, and brand livestreams, as well as billions of RMB in free traffic and platform subsidies, supported the promotions. Chinese entrepreneur and live-streamer Luo Yonghao has already started six Spring Festival live streams since the beginning of the campaign. Luo’s livestreaming on Jan. 10 achieved over RMB 200 million in GMV and over 347,000 orders. Douyin is also actively catering to young consumers this year by selecting trendy products from categories such as the apparel, shoes, bags, beauty, and home products. The platform is also launching Spring Festival themed gift sets by collaborating with brands such as Haidilao and the Summer Palace.

Spring Festival 2021 is poised to continue China’s economic resurgence and recovery. China marketing experts expect robust growth in consumer confidence leading into Q1 2021. More details, including Chinese consumers’ growing preferences for local tastes, Chinese culture, domestic brands, and health-conscious options, are described in our full report, over 600 pages, available for download on our website.

Covid-19 has done significant damage to the global economy. The tourism sector has been hit particularly hard.

However, no one could afford to sit on their hands and everyone went looking for opportunities and alternatives. Tourists, hotels, and others used modern technology to experience tourism in new ways.

Creating online lifelines

The Dunhuang Research Institute worked with Tencent to launch the “Yunyou Dunhuang” WeChat mini program. It not only presents the murals of the Dunhuang Grottoes but also makes virtual ones that users can interact with and create together.

Users can explore the murals close up in a way they can’t with the real objects. Since it was released on Feb. 20, more than 3.5 million people have used the mini program. It was updated in April and launched an animation series based on the wall paintings in the Mogao Grottoes. The animation maximizes the artistic characteristics, image texture, and light color of the murals.

This combination of modern technology and ancient culture triggered a huge social change and is representative of online cultural tours and interactive exhibitions that emerged in 2020.

Existing resources, new services

In Shanghai, some hotels provided food takeaway services to nearby businesses and China’s famous express hotel chain, Huazhu, created isolation rooms and services for migrant workers who didn’t have adequate accommodation (in Chinese).

Now, with China’s domestic Covid situation under control, managers from different hotels have started to hold livestreams on travel apps to promote their hotels and hand out discounts to potential customers.  

Since February, Alibaba Group’s travel site Fliggy has launched 28,000 livestreams, with more than 250 million viewers. Customers love this as it cuts down on their research time and makes it easy to find deals.

On June 5, the White Swan Hotel, the first five-star hotel in China, held a livestream on Fliggy. It’s the first high-end hotel to host a livestream on an Alibaba platform. As the hotel features a three Michelin star restaurant that serves traditional Cantonese food, it featured its high-end food in the livestream. In the end, 1.7 million people watched for more than three hours, the hotel’s followers increased by over 3,200, and it received a booking every three seconds (in Chinese).

Big sales

In addition to livestreaming, some hotels used social media platforms to interact with internet users. Aside from other deals and discounts, luxury hotel group Shangri-la launched a lucky draw on Weibo to engage with previous customers. Participants needed to post photos of green plants outside any windows of Shangri-la hotels. The winners were eligible for vouchers and bags. 

People in China who’ve been at home for a long time are now starting to make travel plans. China’s Ministry of Culture And Tourism estimates the total number of domestic tourists between May 1 and 4 was 104 million, and domestic tourism revenue (in Chinese) reached approximately RMB 43.23 billion. It seems that spring is coming.

We’ve seen similar trends among big tourist destinations in the West that have been hit hard by travel restrictions and have been forced to reimagine themselves. A number of high-profile museums in the West opened up their collections to a wide online audience for free during lockdowns. The Getty Museum launched a famous online photography challenge, in which people all over the world participated to recreate famous artworks with only the items they had at home. There was a tremendous release of online creativity during the early stages of quarantine measures.

Recovery

On June 11, after 56 days of no local transmissions and as control measures began to loosen, Beijing had another outbreak. As a result, the city locked down again, and lots of flights were canceled. A similar situation occurred in Jilin not long ago. The local government blocked travel to and from the city since May 13th. However, these incidents haven’t affected people’s willingness to travel.

According to Fliggy, travel was up during the Dragon Boat Festival in June with the overall number of tourists returning to 60% of last year’s numbers. Beijing, Tianjin, and Hebei have returned to (in Chinese) about 40% of last year’s levels.

So China’s tourism industry is gradually recovering despite strong Covid measures. With policy support from local governments and creative promotion, domestic tourism will spring back soon. However, international tourism will take longer and people will likely never travel the same way internationally again. 

Airbnb co-founder Brian Chesky has said that he believes travel will never be the same. He foresees people in the West limiting their travel to a 200 mile range from home, heading to nature spots and small centres. He believes the days of visiting big destinations like London, Rome, and Paris—and posing for photos in front of famous landmarks—is over. 

Some of these trends are already playing out in China as destinations like Huzhou’s Giraffe Hotel, which mimics a safari experience in Africa, with real giraffes roaming the grounds, pop up. It brings to mind a former time in China, when famous foreign sites were created within its borders for travellers who would never have the chance to see them in real life. 

The chance will come again, but fewer will want to take it up than before Covid-19 entered our lives.

In 2020, livestreaming has shown unprecedented vitality. Various livestreaming platforms are maturing, becoming more mainstream and the epidemic has led to the growth of online work, entertainment, and consumption.

Brick and mortar shopping malls, along with other sectors, are being rescued by livestreaming e-commerce and everyone is trying to be the next Li Jiaqi or Viya. 

Huge market potential

During the epidemic, with 5G developing, livestreaming has shown even more possibilities. 5G capabilities have made a big difference, as signals are more stable and pictures are clearer. In addition to retail, livestreaming has really stood out in education, entertainment, and tourism.

1. Livestreaming e-commerce has taken the lead

iResearch predicts that by the end of 2020, China will have 524 million online livestreaming users. This means 40% of Chinese people and 62% of the country’s internet users will be livestreamers. The total scale of China’s live streaming e-commerce industry reached RMB 433.8 billion in 2019 and is expected to double by the end of 2020.

Given that in 2019, livestreaming e-commerce only accounted for 4.1% of the online retail market and it accounted for 1.1% of overall e-commerce, it still has plenty of room for growth.

During the epidemic, more and more industries turned to livestreaming e-commerce and it moved beyond the standard products. People were even selling houses. On April 24, Evergrande Group, one of China’s biggest real estate companies, had over 3.8 million viewers for its livestream and it racked up 7.12 million likes. During the broadcast, 38 discounted apartments sold out in one second.

2. The education sector has been using livestreaming much more during the epidemic

Social distancing and school closures have made effective teacher-student interactions difficult. Hasty programs set up for teachers, as well as limitations due to internet access and bandwidth, meant that traffic demands often outweighed the abilities of some programs to deliver. 

This is where livestreaming and video apps filled in the gaps. On Douyin (TikTok), for example, users could search for “Take a class at home” to use livestreaming course services for free. In addition to courses from educational institutions, Douyin cooperated with well known model teachers from schools around the country to livestream courses.

3. Offline entertainment and tourism have been some of the most seriously disrupted industries

A lot of entertainment businesses in China have stated that their cash reserves can only last three months. The global film industry is facing US$ 5 billion in losses amid the Covid-19 outbreak. In response, not only have movies gone online, but also nightclubs and bars. TV shows have also explored new formats for livestreaming. 

Museums have expanded their online and livestreaming offerings. In March, Potala Palace conducted a livestreaming tour. Taobao’s livestreaming data showed that there were more than 800,000 people watching. In addition to an interpreter, six cultural experts gave explanations and insights that aren’t usually available during daily visits.

Things are looking up for livestreaming, but there are challenges ahead

Livestreaming’s popularity isn’t necessarily good for brands entering the market. As the scale of livestreaming e-commerce grows, problems are also emerging. Here are two of the biggest: 

1. A large number of multi-channel networks (MCNs), which are like incubators for new KOLs and online personalities, have appeared and the competition is fierce.

There were around 14,500 MCNs in China in 2019. It’s estimated that by the end of 2020, there will be more than 20,000 and might be as many as 28,000. 

The MCN market is saturated and it’s becoming less and less cost-effective for the MCNs to create popular KOLs. Beauty ONE’s “BA Celebrity” plan selected 200 amateurs and spent two years developing only one top celebrity—Li Jiaqi. A report from online news site Xinkuaibao claimed that labor costs for training a celebrity are at least RMB 1 million a year.

When market competition is so fierce, a variety of problems occur. 

The incentive is strong for KOLs to use fake followers (shuijun) and fake data to improve the appearance of their follower base and sales. Sometimes, after signing a deal, small scale live steamers end up with a 40% return rate on items that were purchased by their customers. This is the maximum return guaranteed in their contract. The rate is 50% for bigger livestreamers.

Many top KOLs have their own Taobao stores, so they focus on promoting their own products instead of promoting other brands. They’re effectively in competition with the brands they cooperate with. 

Sadly, some KOLs, especially those still trying to make a name for themselves, have experienced such strong pressure to produce results, criticism from the public and punishing working hours that it has led to mental health issues and depression.

2. Customer retention is a big problem

In terms of the disadvantages of livestreaming, customer retention is a key issue. This is because too many brands are focussed on using livestreaming for sales. KOLs like Viya and Li Jiaqi excel in this area and gains can be large, but also short term. Brands forget that big live stream sales are usually one offs that involve big KOLs who take their followers with them when they go away

Livestreaming can also improve brand image and brand awareness. This can yield long-term results for brands, increase customer loyalty, improve brand image, lead to better WOM marketing and increase the number of repeat purchases. Brands are better off using livestreaming for brand building. They can control this more easily and improve customer retention.

What should brands do?

Should brands livestream? The answer is YES.

Although there are challenges and we can’t predict when the trend will eventually lose steam, brands need to get on board or they’ll be left out in the cold. 

Leverage livestreaming to foster brand communication and PR. One brand that did this well recently was Xiaomi. It was the first to do a livestreamed press conference after the epidemic, when it released the Xiaomi 10. This is likely to become mainstream in the future. One that didn’t use livestreaming well was LV. Their e-commerce livestream’s low-fi, DIY style was widely criticized online as being incompatible with the brand’s high-end sensibilities and luxury positioning. This was a big setback and left a bad impression with consumers.

Livestreaming sales are common on Taobao for all kinds of brands. If you go to a well-known flagship store on Taobao, you’ll see “The shopkeeper is livestreaming” in the upper right corner. Clicking on it will take you to the shopkeeper’s stream as they show and talk about products. It’s more interactive and immediate, but the products aren’t cheaper.

This kind of livestreaming isn’t to promote products. It’s to do branding. The goal is to help consumers get to know the brand’s products, see them in action and become more familiar with the brand. If viewers like a product and buy it, that’s an added bonus. This isn’t promoting sales through one off events. It’s marketing to build consumer confidence and influence consumers’ consumption decisions in the long term and this is a strategy that belongs in every brand’s arsenal. 

Livestreaming technology keeps advancing

Because of the epidemic, livestreaming ended up being used in all kinds of ways that it hadn’t been before. Expect that trend to continue as people keep experimenting with new uses and technologies for live broadcasts. In the future, it will be used for medical purposes, aviation, the blockchain, AI, and more. It will also evolve with 5G developments and as technologies like VR and AR change.

For example, Li Jiaqi managed to cooperate with a virtual KOL called Luo Tianyi during a livestream for L’Occitane. Tech magic allowed him to appear right alongside the virtual character during the livestream. 

Five years ago, livestreaming emerged from the gaming world to become a huge e-commerce asset. 

Where will livestreaming be five years from now?

Editor’s note: This was contributed by Ashley Galina Dudarenok, an entrepreneur, professional speaker, and vlogger. She is the founder of several startups, including social media agency Alarice and resources platform ChoZan. She runs the world’s largest vlog about the China market, consumers and social media on her YouTube channel Ashley Talks. Her latest bestseller, Unlocking the World’s Largest E-Market: A Guide to Selling on Chinese Social Media, is available on Amazon. 

At Alibaba’s 2016 Computing Conference, Jack Ma focused his speech on five areas that are being transformed by technology. The list included new finance, new manufacturing, new technology and new energy with new retail at the center.

Alibaba wants to use data and technology to transform retail, including offline retail, which accounts for 82% of the total.

New retail is Alibaba’s strategy to redefine commerce by enabling seamless engagement between the online and offline world. It’s not about converting online users to offline customers or vice versa. It’s about building a retail ecosystem that blends online and offline channels in a unified way that features the consumer at the center, often in new and unexpected ways.

The company used the occasion of the Double 11 Shopping Festival – which itself has transformed retail by being 18 times bigger than Amazon Prime Day and 2.5 times bigger than Black Friday and Cyber Monday combined – to showcase their vision.

With examples from the Double 11 Shopping Festival and other test case examples in China, here’s what the future of retail looks like:

1. Smart Pop-up Stores 天猫智慧快闪店

New retail stores can curate consumer experiences specific to brands and products.

The major features of these stores include:

•  A connection to an online payment system is established to enter the store. In Alibaba’s case, Alipay must be scanned to enter their smart stores.
•  Price tags are electronic and prices vary in real time based on certain factors.
•  Facial recognition technology is used to track customers. Discounts are offered on items they smile at or that they have searched for online.
•  Items can be purchased for later delivery. Home delivery details don’t need to be given as the system already has the purchaser’s home address on record. Delivery in major cities in China is already very fast taking from 15 minutes to 3 hours.
•  Customers can receive location-based store recommendations and discount notifications through their Taobao or Tmall app on their mobile devices, driving traffic to offline stores.
• Customers can “try on” apparel and makeup items virtually, with the help of RFID (radio-frequency identification) and AR (augmented reality) technology.
• Customers can scan images using AR technology to visit product listing page and collect coupons.
• Consumers can purchase items using vending machines by scanning a QR code and they can also have the products delivered home with a few clicks.
• There are also innovative technologies like a “Cloud Shelf” that stores purchasing behaviour data, facial recognition information, mobile gamification, etc.

2. Tmall Neighbourhood Convenience Stores / LST Corner Stores 零售通

Alibaba’s LST (零售通 / “retail integrated”) initiative is different from Amazon’s physical store push in that it can be leveraged for use by millions of neighbourhood convenience stores and mom-and-pop shops to digitize their businesses rather than only be used in Alibaba owned stores.

For example, the LST system can help the owner of a brick-and-mortar retail store to measure the demographics and purchasing behaviours of surrounding customers and then predict and recommend the most in-demand products for sales in that store. Their tech can be used for merchandising, inventory management and logistics to enhance their business operations.

Last August, Weijun Grocery (维军超市), a community grocery store besides Zhejiang University in Hangzhou, joined Alibaba’s LST system and was later chosen as the first trial target for its “Tmall Corner Store (天猫小店)” franchise. According to an interview with the store owner in August this year, the sales volume witnessed a sharp increase of 45% compared with last quarter, while customer traffic grew by 26%.

3.  Retail as Entertainment

Modern Chinese e-commerce consumers are predominantly young and mobile-savvy so shopping isn’t just about passively adding items to their virtual shopping cart. It’s already become a social activity, a means of consuming content and, ultimately, a form of entertainment.

This year, the sales campaigns before the Double 11 Shopping Festival illustrate this “Retail as Entertainment” concept.
Major “See Now, Buy Now” online fashion shows have already taken place in 2016 and 2017 with brands like MAC, Guerlain, Pandora, TAG Heuer and Rimowa taking part. During these shows, the audience can do more than just watch. They can purchase outfits using a purchase link shown on the left side of the screen on Taobao or Tmall, or shake their phones to go to the product page if they were watching the show on TV. They also had access to a virtual fitting room where they could upload their photo and input their height and weight information to “try on” and preview their new looks with the items they would like to purchase.

Online games to get product discounts as well as the Double 11 Countdown Gala also fit into the retail as entertainment transition.

4. A Blurring of the Line Between Consumer and Advertiser/Influencer/KOL

This is already taking place at a certain level in China as many brands reward consumers for posting their purchases and taking part in campaigns. It’s also going to take place in more sophisticated and embedded ways offline.

For example, at one of the pop up shops that were part of the Double 11 Festival, after you bought an item, a photo studio in the shop had staff to quickly put on professional makeup and take your picture with the item with great lighting in a studio setting.  

The consumer now becomes a mini-influencer and an active partner in social selling.

Not only Alibaba

Alibaba’s new retail is not the only concept pushing Chinese retail into the future. Tencent, for example, has also been active in the new retail battle. With 889 million monthly active users on WeChat and over 55% of mobile consumption time in China spent on its products, Tencent has the advantage in terms of its mobile user database. It also collaborates with JD and VIP in strategic partnerships in order to compete against Alibaba.

On November 8th, 2017, Tencent officially announced its ‘Smart+’ strategy with its cloud platform establishing a smart ecosystem covering retail, finance, logistics, marketing, communication and more in a decentralized way.

Tencent also aims to empower a ‘Smart+Retail’ with the latest big data, cloud computing and AI technology. At the same time, existing WeChat functions such as official accounts, mini programs and WeChat Pay already support retail merchants. For instance, with the help of WeChat Pay and big data analysis, merchants can better understand the their target consumers, and customize messages and promotions quite precisely. With mini programs, merchants can merge shopping experiences and output services of online and offline retail in a seamless manner.

JD, a Tencent partner and the second largest ecommerce platform in China, is also pursuing a similar strategy under the banner of  ‘Unbounded Retail’ (无界零售). Similar to the new retail concept, unbounded retail stands for these 4 concepts:

• Unbounded consumers: consumers can access more purchasing options through multiple providers and channels, even across space and time.
• Unbounded scenarios: connecting and combining online and offline channels and new scenarios integrating innovative technology.
• Unbounded supply chains: integrated solution for the entire process from product design, production and inventory to pricing and logistics, infinitely extending the value of the supply chain.
• Unbounded marketing: all media, merchants and platforms collaborate to generate smart content and facilitate sales conversion.

JD’s unbounded retail also uses an efficient, precise and safe database to unify the consumer insights and experiences. For example, coupons released by JD can be used in the brand’s online JD store, WeChat stores, as well as offline stores. Consumers’ memberships and corresponding discounts can also be converted freely online or offline. It creates a seamless consuming experience in diverse channels, and help brands connect with target consumers in a more effective way.

All these influences, innovations and catalysts will move beyond China’s borders to the wider world and will impact global changes. It will be fascinating to see if these social technology giants, together with the Chinese government, can make China a true superpower of the 21 century.