By Frank Zhang, vice president of Greater China of SAP Hybris
New Years, Christmas and Singles’ Day presented e-commerce sites with almost unimaginable opportunities – during Singles’ Day, 37% of the buyers who helped Alibaba log a record 120.7 billion RMB (US$17.8 billion) in purchases shopped from overseas web stores, according to Alibaba. In the run up to Chinese New Year, for all retailers whether big or small, the giant Chinese consumer market is extremely alluring, but succeeding here requires companies to expressly tailor their e-commerce activities to local mores.
A new report from Accenture and AliResearch, Alibaba Group’s research arm, forecasts that by 2020, more than 900 million people around the world will be international online shoppers, and the biggest market will be China. Over 200 million Chinese consumers are expected to be cross-border shopping within five years, with a transaction volume of imported goods purchased online reaching US$245 billion. The booming cross-border e-commerce industry will continue to provide goldmine opportunities for international brands to enter China in years to come, making it important to team up with the right partners that can help establish the business with the most fitting solution.
It’s clear that when it comes to mobile shopping, the Chinese are setting the pace for the rest of the world. In PwC’s Total Retail Survey 2016, 65% of Chinese consumers stated that they shop online via mobile at least once a month; the global average is just 28% and just 22% of customers in the US. Fewer Chinese consumers have access to or desire a PC and why would they, considering the highly personalised experience that e-commerce companies offer them? Platforms such as Alibaba and JD.com are also huge data analytics companies, so Chinese shoppers are presented with contextual information based on their location, income, shopping habits, and electronic payment options, such as Alipay and WeChat, have also helped make online shopping personalised, quick and easy. As mobile has become second-nature, apps aimed at this market have to be customised, simple to use, offer a user-friendly interface and a unified experience across all platforms.
Local consumers also expect to be able to shop seamlessly across all channels - anytime, anywhere. Research by Forrester Consulting commissioned by SAP Hybris showed that as the B2C e-commerce market in China matures, buyer expectations for convenient, efficient and cost-effective access to both online and offline shopping continues to grow sharply. And Chinese consumers are becoming more demanding than ever. Companies need solutions that offer a production-ready omni-channel commerce system that is fully customisable with functionalities specifically to address Chinese e-commerce needs straight from the box.
One of the key characteristics of the Chinese market is consumers’ distrust in advertising and news sources. Instead, Chinese e-commerce is entwined with social media apps such as WeChat. Relying more on word-of-mouth from friends, family and key opinion leaders, social media has a greater influence on purchasing decisions of consumers in China than anywhere else in the world. Local integrations with the largest social media and e-commerce platforms are crucial. WeChat is now an essential part of day to day communication in China with more than 700 million active users, many of whom use the app for mobile shopping.
While China is predicted to soon be the biggest market of international shoppers, millennials across Asia Pacific are also very enthusiastic about online and cross-border shopping, according to a survey by Ipsos and PayPal. 65% of millennials surveyed have purchased in a foreign currency, while 33% have bought from a website that was not in their native language.
E-commerce companies need to access China to future-proof their business and to succeed there, they have to cater to the unique demands of the market. In addition to planning for major shopping events like Singles’ Day, Black Friday and Cyber Monday, they will need to understand the evolving local customer landscape and plan for the long run. They need to be everywhere their customers want them to be – and that is especially on mobile. Companies need solutions that enable them to deliver a consistent brand experience across all channels – anytime and anywhere customers connect with them, across the entire buyer’s journey –before, during and after transactions, and offering customers attractive services to ensure that they come back.