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4 Ways to Enhance Digital Customer Experience in China

  |  March 3, 2014   |  Comments   |  

E-commerce savvy consumers in China display distinct behavioral patterns and smart retailers should be able to use these to reinforce their digital strategy.

For a number of years, Chinese consumers have been adapting to a more Western style of commerce, thanks to growing smartphone use and access to products via mobile Internet. The ability to purchase branded Western goods (particularly luxury items) online has, according to management consultants Bain and Company, given rise to a nation of enthusiastic shoppers, from highly commercial tier-one cities through to more rural and remote territories in tiers two and three.

However, now that they have become accustomed to having a world of goods at their fingertips, it’s becoming increasingly important to provide consumers in China with a compelling experience – one that paves the way for future transactions.

Enhanced Experience Based on Consumer Behavior

According to Bain and Company, Chinese e-consumers display distinct behavior patterns. Smart retailers should be able to use these to reinforce their digital strategy:

1. Chinese consumers like to buy multiple brands and it’s important to become part of their repertoire.

How can brands achieve this?

Brands should initially adopt a "watching brief," using the wealth of digital data available to trace consumer purchase patterns and their preferred channels for relevant goods (luxury, fashion, household items, etc). For example:

  • Weibo is popular for sporting goods and gadgets. For example, Xiaomi held a Weibo sale where users bought more than 1 million phones in just five minutes.
  • Taobao is akin to eBay and sells millions of units of fashion, accessories, and luxury items, from both individual sellers and retailers. Price and convenience are key for users.
  • TMall is the home of major Western named brands and designer labels such as Gap, Adidas, and Levi’s. Their guarantee of quality and genuine goods attract shoppers looking for the "real thing" – and they’re prepared to pay a premium for it.

Brands can use the data they gather to develop a digital strategy with targeted activity, which is likely to yield the best results, rather than a "try it and see" approach, which can be time- and resource-consuming.

2. They appreciate sales, but rapidly scale up the amount they spend.

The lure of a bargain inspires many Chinese e-shoppers to make purchases. However, once they have secured value for money, they tend to make further, more expensive purchases from the same brand.

How can brands use this to their advantage?

Being prepared to go to the market with loss leaders has worked for a number of global brands in China. On last year’s Singles Day, China’s biggest online shopping festival, 20,000 Chinese and international vendors including Gap, Samsung, and Procter & Gamble slashed prices by 50 percent or more, resulting in record-breaking sales in excess of $5 billion for Alibaba alone.

Businesses wanting to attract online customers in China should take an honest look at their product line and assess which items can be offered at a discount in order to secure consumer interest and upsell more expensive items. The big brands have shown that it’s worth taking the commercial hit on low-cost, low-value products in order to reap the rewards from return visits and increasing basket values.

3. Chinese shoppers love smartphones (more than 50 percent of digital customers browse using them).

Smartphone availability has had the most profound effect on the way Chinese citizens shop. Sixty-nine percent use their phone to make purchases (compared with an average 40 percent in Europe), and around 50 percent of that number makes several purchases a week. The most popular product categories for smartphone purchase are beauty and cosmetics (20 percent), clothing (29 percent), and entertainment (26 percent). However, barriers to purchase include lack of detailed product information (32 percent) and too small screen size (42 percent). (Source: Google, Our Mobile Planet)

How can brands use this to their advantage?

This is where it pays to get expert help in developing a customer-focused mobile user experience. It’s vital to make the limited real estate available on the mobile screen work for the customer, with clear and easy access to the information that matters to them. Brands should use all of the intelligence they have gathered about customers as part of their digital strategy to make the mobile experience useful and intuitive, paying particular attention to which device they use and how they access information. This enables brands to determine which mobile platforms they should focus on first (though Android currently leads the way, iPhones are still seen as status symbols for those that have significant disposable incomes, so iOS might be best for big-ticket, luxury goods, for example). It will also indicate whether best results will come from a mobile-optimized site or a specific retail app, which has the advantage of offering exclusive information and value-added content.

4. They appreciate products imported from overseas as they consider them to be more healthy, genuine, and price-competitive.

How can brands use this to their advantage?

Of course, Western brands already have an inherent advantage here – one that can be leveraged by careful content marketing. Emphasizing the authenticity, quality, and value of goods that have a genuine heritage will ensure that they encourage purchases from an audience that’s already positively disposed toward their products.

Keeping the Customer Satisfied

In China’s maturing and expanding digital retail arena, it’s clear that brands now need to focus their attention on giving the customer not only the products they need, but also the experience they’re increasingly coming to expect. They need to shift from a "market stall" approach to one that is more akin to a department store if they want to retain customer interest in the long term.

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ABOUT THE AUTHOR

Elisa Harca

Elisa Harca is a digital retail and engagement expert with more than 13 years' experience working with some of the world's leading brands, including Swatch, MAC Cosmetics, Samsung, and Ericsson. She has worked with clients extensively in North America, Europe, and most recently Asia, and at Red Ant she is responsible for leading teams of digital specialists in Hong Kong and China in bringing its award-winning mobile retail technology to businesses across the territory. Recommended as an expert digital and mobile consultant by market leaders, she is a regular speaker at industry events including The HUB and UKTI's GREAT Weeks, and also hosts workshops for high-profile industry executives. Elisa is recognized worldwide for her professionalism, integrity, and her ability to help retailers navigate the increasingly complex global digital landscape.

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