In China, over 10 million online stores will sell more than 1 billion products with a transaction value of more than 1 trillion dollars this year. The big questions to international brands that want a piece of the action in China's online shopping arena: how to get noticed and how to get consumers to like and buy your product? The China branch of Ogilvy ad agency offers recent insights in a white paper. One hint: think beyond conventional e-commerce channels.
The white paper, titled 'Why brands matter on Chinese ecommerce', answers its own question on one of the first pages. "The recent Double 11 Shopping Festival recorded 25.3 billion USD dollars on Tmall alone, sales figures 3 times greater than Black Friday in the United States. In China, ecommerce" ... "has dramatically altered how consumers interact with brands."
Never before, the report continues, "has a stranger's experience had such a profound impact on what an individual chooses to buy. Every keyword, click or comment alters how users receive product recommendations, thus influencing their brand choices. This is also the first time that the human desire to buy has been so enabled by technology and data. Every imaginable product and experience is just a click away. Brands are more important than ever in this new era, but a conventional approach is not going to cut it." But if conventional won't work, what will?
First: stand out.
If your brand does not stand out, it may lose out, as the choices for consumers are unlimited and prices are more competitive. The Ogilvy experts did the math: if a consumer would want to visit all available online stores on the net and spend one minute per store, how long would this shoppinh spree take? At least 80 years. The message: don't just focus on short-term sales growth via e-commerce, building your brand for the long term is equally important.
Second: build the brand bottom-up.
Brands in China are increasingly built like this, and social and commerce driven campaigns need to ladder up. In other words: by all means, get your brand on billboards, on local buses and in newspapers and magazines, but spend money on building it on WeChat and the dozens of 'social hangouts' of China.
The Ogilvy report defines a number of actions to make brands matter on e-commerce. One of the recommendations is to think beyond conventional e-commerce channels. It certainly is important to understand the potential of dominant players such as Alibaba and JD, that will continue to grab a large share of growth. Ogilvy points out that new emerging players do have "opportunities to capture category expansion, demand upgrade and the needs of young, post 90' s consumers."
Which are these emerging channels?
A few examples:
• Rural Taobao is one of Alibaba's main strategic projects. It aims to support trade between China's remote regions and urban areas. Presently, around half of China's 1.3 billion reside in rural areas. As part of the project, a network of e-commerce service centers has been created at the county and town level to provide services that enable villagers to purchase products online.
• Gifttalk is a new ecommerce platform, that provides users with a complete range of gift options, as well as a fashionable shopping experience. Every day, over 10M people use GiftTalk to select gifts for their friends, family and even themselves.
• Pinduoduo is a challenger. It has become one of China's largest e-commerce sites by targeting lower-tier cities. It already has over 114 million users that are attracted by the cheap household products such as $1 toilet paper packs and $5 bed sheets that Pinduoduo offers. Interesting: users can launch group buying together with friends and family to get a better price.
• Ujipin is one of the biggest dedicated B2C ecommerce platform of design brands, offering membership discounts. Anything from stationery, furniture, electronics and accessories.
• Xiaohongshu is a community, as well as a overseas shopping tip app. There is no commercial promotion on Xiaohongshu, only real comments on products. Xiaohongshu started its business by helping overseas travelers to draft a shopping list before they hit the roads. The service has transformed into a community for those who are passionate about fashion and shopping and want to know more about these fields even when they do not have traveling plans.