According to Statista, China’s retail e-commerce sales is forecasted to be around $840 billion dollars by 2021 making China’s e-commerce market attractive but challenging. Consumer’s spending power is increasing, but the Chinese are faced with an abundance of choice and easily get distracted. E-commerce is still rapidly evolving because of fast paced innovation, however, competition is fierce within every development.
China, today is characterized by mobile-first consumer behavior, vibrant social commerce adaption, and universal digital payment’s infrastructure. In addition, the market is very competitive. Local and international brands compete for consumer’s attention and wallet share pushing aside language barriers with certified translations to avoid problems with Google Translate. Sean Hopwood, CEO of Day Translations points out that, “a certified translation is an accurate and original document. You need accuracy of a real-person versed in the culture, and unfortunately that’s something a machine can’t do”.
In the meantime, internet giants are rapidly building network architecture to strengthen their infrastructure to redefine customer experience. So how do businesses keep up to take a market share in China? The answer is in trend shaping.
Trends Shaping Retail and Consumer Products Correlating to E-Commerce
The New-Retail Normal
This trend involves the increasing maturity of businesses in using growth online-to-offline (O2O) marketing, Omni-channel technologies, and data analytics.
Many brand retailers are starting to embrace the fact that the future lies with growth in O2O marketing, which is meant to use online channels to drive consumers into the physical stores. While O2O focuses in on marketing, Omni-channel technology takes customer experiences and operation to a new level while increasing profitability. Apart from marketing, many brand retailers are using big data analytics to improve product development along with merchandising strategies.
Content Driven Commerce
Retail brands are altering their path to incorporate organic social engagement to relate to their customer’s digital experience.
In most markets, businesses have come to recognize the importance of how social media has penetrated the consumer perspective. However, in China, consumers use social media to discover new brands and products through reviews and feedback. This why it’s critical for retailers and brands to build high-end social communities and engage with their customers on these platforms.
New Growth Possibilities
Through existing e-commerce and social media new growth opportunities have emerged in the industries of food, luxury and sports retail.
China’s e-commerce market is relatively mature in categories like electronics and clothing, but is opening up to the possibilities in that of fast moving consumer goods (FMCG) and the grocery industry is being explored as the next big outlet. However, this is a speculative idea as a recent study done by PWC Global stated that only 30 percent of all people liked buying their groceries online.
With these numbers in the grocery sector, millennials are more open to these ideas and trying new brands that they find unique and interesting. Young millennial shoppers have been seen as the driving force behind a more sustainable personal consumption with an added emphasis in luxury new brands along with sports retail.
Innovations in China’s e-commerce market is a moving target, and the digital population is driving the disruption. Despite the rise of e-commerce, the physical store is not dead; it just needs to evolve.
In the near future, China’s e-commerce market is set to be driven by content-led experiences. The best will be designed to use brand storytelling to delight consumers at the key moments that matter, and exploit innovations that sit at the intersections of mobile and social engagement. As retailers and brands increase the sophistication with which they can interpret and execute data, there will be a greater degree of analytics enabled personalization.