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From E-Commerce to M-Commerce

Five things you need to know about the Chinese digital market

When I left China 15 years ago, only a few companies had a website. Nowadays, when you walk into a store in China, you will easily find large touch screens for in-store product search. When younger generations sit in a taxi, they often feel uncomfortable if a QR-code-enabled mobile payment is not made accessible. Digital and social marketing, especially WeChat (the largest social platform in China), are pervading and influencing the lifestyle of people of all different ages in China. While the influx of global companies entering the market are stepping into rapid change, there are some observations uniquely related to the Chinese culture to keep in mind when targeting the digital market there.

1. Don’t ignore the government’s control of the market.

The Chinese business is certainly given a lot more freedom today for free trading and competition compared to 20 years ago. However, the government is still interfering with the rules of the free-trade game, using their political power to impose policies. Local companies are favored by the Chinese government in many areas such as finance, telecom, cloud computing, etc. Building a partnership with a local company would be a shortcut in the journey of seeking sustainable advantage in the China market.

2. Don’t expect Chinese clients to know.

Digital, social, and big data are hot buzz in the China market, but few of the companies really have tactical strategies. Many of them simply follow the trend in cloud computing, social marketing on WeChat, and run digital media campaigns without knowing how to develop or measure them appropriately. On the other hand, most of them are approaching digital marketing ideas derived from brick-and-mortar marketing practices. A lot of effort needs to go into educating the client in a partnership.

3. Be prepared to get specific.

E-commerce is growing fast in China, but the profitability remains a big challenge to many companies. Many businesses suffer from expensive investments in media, while promoting discounts to increase the online traffic volume and sales. E-commerce brands are desperate for organic plans to boost sales. In a new business pitch, vendors often get asked to articulate the clear tactics that will achieve specific business outcomes, rather than to simplify technical or analytical goals.

4. Don’t miss the sales opportunity on fake holidays.

If you stay in China for a while, you will see people celebrate some locally created "holidays." I call them “fake holidays” as they are not official days off. But those days have been broadly leveraged for commercial purposes. For example, November 11th is a so-called “holiday” for singles without boyfriends or girlfriends. E-commerce companies aggressively leverage those days for business. It’s no surprise to see some big players generate more than half of their annual sales amount around those days. The success of those e-commerce players has created a new shopping habit for consumers similar to Black Friday in the US.

5. Don’t underestimate the power of small screens.

There is a joke that the consumer segment aged between 25 and 35 is prone to neck pain because they read and type on the smart phone most of the time. Small screens are not preventing them from doing online shopping, food delivery, viewing video, making mobile payment, playing games, purchasing tickets, sharing with friends socially, taking photos, and filming videos all on their smart phones. Many brands are developing  mobile apps with various useful functions integrated. The availability of commercial Wi-Fi in most public areas also fosters a mobile device-enabled digital ecosystem. M-commerce is causing more innovation in business models and advertising technology in China.

Certainly, there is more to know about culture in any market than what I’ve outlined, but if you have a solid understanding of these five trends, buying preferences, and behaviors, you’ll have a much greater advantage of reaching consumers in China.