Commerce China Part 2:– ‘Talk to me in Internet’

Our commerce sessions during Oracle Open World in Shanghai were chock-full.  The experience was surreal with what looked like a DJ box at the at the back of the room containing two humans, translating simultaneously to audience-members wearing headsets.  My only tip if you ever find yourself presenting in this situation is to avoid jokes – the timing is all off.

But I digress.  My greatest curiosity while interacting with the audience was – what are their end customers seeking today?

I found that the Chinese consumer wants to be transfixed and beguiled, all while in transit.  They seem to be the ultimate mobile users.

I was personally frustrated in Shanghai by being unable to post my beautiful and ‘bizarre-to-me’ meals on Facebook, leading me to understand why every one of the social media channels familiar to me in North America and Europe have a Chinese-specific counterpart.  Facebook, YouTube, Twitter, Foursquare, Vimeo, Blogger, Blogspot, Hulu and Skype are all blocked in China.  This is leading to a China-specific tech boom as the local Chinese versions grow and prosper. 

Youku – Chinese Youtube - I should have been spending some of that down time visiting Youku, the Chinese version of Youtube. Youku has started  innovative methods of product placement in original videos.  Because of the relatively low number of home-owned recording devices and subsequent low volume of user-created content, much of the content on Youku is produced by brands. 

Just this year, Pepsi jumped on the trend and created a 30-minute “Bring Love Home” web movie premiere that it launched simultaneously on the web and in movie theaters.

Having watched the campaign, I can say it reminds me of the saccharin-sweet and catchy McDonalds and Folgers campaigns of the late 80’s and early 90’s.  The goal of this medium is not subtlety, it is reach. (Even if your Mandarin is rusty, you can get the experience from the background music: "Bring Love Home" video.) 

Also fascinating was the way that press and articles referencing the success of this campaign cite the Sino Weibo (Twitter equivalent) post volume and sentiment as validation of the success of the campaign.  The Chinese consumer is into social media and in deep.

Youku has gained popularity through the quality and entertainment of the content and has built a market for aspirational purchases  “The site hosts a variety of videos such as runway shows, backstage action and interviews, and allows customers a greater insight into brands activities especially during fashion weeks.” (Source: The Online World of Chinese Consumers: Insights for luxury brands from China Connect

For campaigns that are a bit more sophisticated, we can see the approach that luxury retailers have taken., a site created by LVMH “posts stories and articles about fashion, art, travel and gastronomy.  The firm launched a Chinese version of the site (the only other language besides English) this year” (McKinsey Consumer & Shopper Insights: Luxury Without Borders China’s New Class of Shoppers Take on the World) I put this effort as part of the surge in Multi-Media and Editorial Content that we are seeing globally.  Luxury retailers are seeking to reach the luxury consumers in China, many of whom are known to shop for luxury items outside of the Chinese borders. 

According to Forbes, around 60% of all luxury goods bought by the Chinese are bought overseas.
At the end of July, The Guardian posted statistics showing that the Chinese demand for luxury goods is supporting the global growth of certain fashion retailers.  The high-stakes involved with the Chinese consumer mean that it is imperative that brands maintain a relationship with the consumers when they are not shopping in store.

I read all of these as indications that the Chinese market is moving towards differentiation.  End customers are active within social channels and self-selecting in the information they want to consume.  Bargain-seeking Chinese consumers want a bargain, and luxury-seeking consumers want a luxury experience. 

“According to McKinsey, China was the world’s second-largest e-tailing market, after the United States, in 2011, with sales totaling $120 billion — well above the $107 billion in Japan, and more than twice those recorded in Britain, for example. By 2012, China came “very close to equaling the United States for the top spot” in terms of e-tailing volumes, McKinsey added.”  E-Commerce Soars in China

It is up to the retailer to find out what their end customers want and deliver it to them.  What better way to access these super-savvy Chinese internet users than by engaging in that merchant to customer dialog online.


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