China has gone through a massive transformation from being known as the “world factory” of cheap goods to become the global innovation ‘powerhouse’, setting new global trends within the digital commerce space. This reflects Chinas strategy, launched in year 2015 by prime minister Li Keqiang, called “Made in China 2025” (MIC), an initiative which sets to modernize China’s industrial capability. Many Western countries have always looked to Silicon Valley in USA, seeking inspiration on technology and innovation. This is rapidly changing. The new ‘Silicon Valley’ is now a city in Southern China, Shenzhen. This is the ‘birth-place’ to some of the world’s largest and most successful tech companies, such as Tencent, Huawei, DJI, and ZTE. Embracing innovation and technology has been the ‘trademark’ of Shenzhen, and many Chinese companies. Speed and an experimental approach are part of the reason for success among many Chinese companies. They go through trial and error until they identify the real opportunity to scale.
Approximately a year has passed since the outbreak of covid-19. As a result, the Western world has accelerated their digital initiatives with increased focus on e-commerce, integration of online and offline, social commerce, use of QR codes and mobile payment for contactless interactions. This has been the norm for several years in China. The only difference is that the pre-existing trends have been amplified during the pandemics.
I have picked three ‘trends’ developing in the global commerce space, already existing in China:
- Livestreaming is not only a way to engage with potential consumers, but it is transforming the way we interact with brands, increase consumers understanding of the products, strengthen trust between buyer and seller – which ultimately lead to increased sales and satisfied customers. Adding the commerce ‘layer’ to livestreaming, we get what is called ‘live shopping’, an embedded shopping element in the stream, where consumers can “see now, shop now”. This allows instant gratification among the viewers and connects the brand closer to the seller. Impulse buying is more likely to happen through live shopping, compared to a traditional webshop. Read more about livestreaming in my previous blog post: https://digovation.com/2020/05/11/livestreaming-is-going-global/
- Digital marketplaces now accounts for about 57% of total global online sales, according to digitalcommerce360. Looking to China, digital marketplaces are dominating ecommerce with Alibaba and JD.com leading the way. Most consumers begin their customer journey on a marketplace such as, Tmall and Taobao (part of Alibabas ecosystem). There are very few that starts their product research directly on a brands website. This is also becoming the case in many European countries, such as UK and Germany where majority of consumers start their product research on Amazon Marketplace. Read more about digital marketplaces in my previous blog post: https://digovation.com/2020/05/13/the-power-of-marketplaces-in-china/
- Social Commerce, meaning shopping directly in social media, is also on the rise. In China, social commerce, the merge between social and shopping has long been the way to attract consumers to buy. ‘Shoppertainment’ is a buzzword resulting from social commerce, where entertainment is a part of the shopping experience. Shopping should be fun and social, attracting users with interacting social elements such as gamification and social sharing. An example is Pinduoduo, Chinas third largest ecommerce app, where they leverage group-buying to give the end-user discounts – the more people you have on your shopping team, the better discount you will get. During the pandemics, the social part of shopping has only gained traction, as consumers sought to socialize, meeting on social platforms to purchase goods. Wechat, the major social media app in China, with over 1 billion active users, has integrated shopping on their app, leveraging their strategic partnership with JD.com (second largest e-tailer in China). This provides users with one interface for their whole purchase-journey. Check out is seamless with the use of Wechat’s own payment service, Wechat Pay. Looking to the West, we are now experiencing Whatsapp, owned by Facebook, trying some of the same things as Wechat has done for years, integrating their own payment service. Instagram shop and Facebook shop are also expanding their presence. Read more about social commerce in my previous blog post: https://digovation.com/2020/05/22/social-commerce-is-gaining-traction/
I believe we will see these trends developing and maturing in the Western world in the years to come. My advise is to pay close attention to whats going on in China – this is where the future of retail is developing.
Sources:
What are the top online marketplaces?
Digovation 