When social and commerce merge

In March, the China Connect conference dedicated to Chinese digital trends was holding its 7th edition in Paris. The motto of this edition was « Crack the codes » i.e how to uncover the dynamics of a specific, fast moving market which is in many ways leading the West when it comes to digital habits and models.

The explosion of Live Streaming

A key trend this year is the growth of mobile live streaming… maybe later than in Western countries but much faster and stronger! This new form of entertainment has found a place in people’s daily life, especially among the younger generation, and in the strategies of brands of all sectors. Its development is different from what can be seen in Europe and the US thanks to..

  • its scale: 200+ mobile applications such as Ingkee, Huajiao or Douyu which have been downloaded over 50 million times each, and a total of over 350 million regular users of live streaming platforms to date
  • its interactive dimension: live streams are not simple videos that one watches, most of the times they consist in interactive cessions during which fans formulate questions, express demands, interact with the person in the video and offer virtual gifts
  • its monetization: via paid virtual gifts – from a few cents for a hug or flowers to a few hundred dollars for a sports car or a yacht – thousands of streamers earn a very decent revenue while platforms such as Huajiao collect 30% over each transaction

Check out this demo by WSJ

KOLs: a whole new media

The KOL phenomenon – key opinion leaders – already very strong in China has amplified with the development of live streaming. Made of famous or less known celebrities (such as Melilim Fu who participated in the conference with her orange hair and outfit) as well as average individuals with a small audience of loyal followers, the crowd of KOLs is now considered as a media of itself and an essential touchpoint for brands wishing to develop their visibility and engagement with consumers, especially in industries with a strong affinity dimension such as luxury, cosmetics and automotive.

Brands’ campaigns play on the various levels of the KOL pyramid (a few celebrities on top, many influencers on the base) to develop strategies that mix prestige or impact actions with proximity.

The specificity of the KOL media resides in the fact that it appropriates the discourse of brands. Some refer to it as UGC 2.0: creating brand contents for which celebrities and influencers become the main channel.

The convergence of social and commerce

As previously mentioned on this blog site, WeChat, the social network and service platform used by over 700 million Chinese, has taken the world leadership in terms of social commerce e.g integrating purchase opportunities within conversations.

By combining online payment solutions like AliPay and WeChat payment with live streaming platform, China is amplifying the convergence between commerce and social. With the « click to buy » function, the subscriber to a live stream can in a single click purchase the garment worn by the person (KOL) in a video or the product or service he/she is talking about. In a country where 9 out of 10 people online access internet on mobile this generates a lot of spontaneous purchases. For brands, developing affinity, federating communities generates naturally sales. And they cash in!

Once more, China demonstrates its strong ability to innovate and take the lead, not exactly in the development of new technologies but rather in their usage and monetization.

Article written by Christophe Jourdain initially published in Siècle Digital

m-mobile 3

M-commerce is booming nowhere else as much as in China!

China is the first e-commerce market in the world*. What is striking is how quickly habits shift towards mobile, to such an extent that the major part of online shopping is now done through a mobile device. This trend is a great change for brands.

Alibaba dominates the Chinese ecommerce with 80 % market share and more than 350 million active buyers a month. With two main platforms Taobao (CtoC) and Tmall (BtoC), the group realizes an annual transaction volume higher than Amazon and eBay altogether: it is a monster! Indeed, in one year, between the second quarter 2014 and the second quarter 2015, purchases on mobile increased by 125% for Alibaba and their proportion raised from 33% to 55% of all transactions: a boom!

The growth of m-commerce is explained by numerous factors, including the huge appetence of Chinese consumers for digital, the power of local e-commerce platforms and payment solutions, the weakness of physical trading outside the big cities, etc. (see also Why are Chinese consumers so Digital?). It speeds up the transition to a consumption-led economy and contributes to the growth of both rural and peri-urban areas. It is thus greatly encouraged by the government and benefits from a snowballing effect.

There is lots of indication that the growing practice of m-commerce anticipates what will happen, at a slower pace, in most of the others markets in the world. What is currently happening in China has to be followed closely. But what exactly does that change?

Initially, the shift from physical trading to “traditional” e-commerce (not mobile) extended the purchasing time to every moments when consumers are using a computer, and the shopping location to all the places when they have access to a desktop. This evolution meant also a larger amount of information, of influence sources, of comparison means, of collaborative solutions, allowing everybody to buy in a “freer and smarter” way. Nowadays, the shift towards mobile purchase as observed in China goes one step further.

With smartphones and consumers like bosom buddies and permanently connected to the internet, we really move to a 24/7 commerce. Chinese consumers go mad for social networks such as WeChat (one quarter of the population logs in more than 30 times a day) or Weibo and other e-commerce websites such as Taobao or, they are in a quasi-permanent purchasing mind, searching for bargains. Consumer can also switch and be in a selling situation, which multiplies transactions and compels brands to find a space on the mobile media if they want to exist. The permanently connected smartphones make online commerce more and more part of consumers’ daily life and expose them to more and more products categories, e.g. the growth of YiHaoDian (“Number 1 store”), an online shop specialized in fresh food products (fruits, vegetables, seafood) providing a user-friendly app offering delivery within 3 hours from purchase.

M-commerce is social by nature. Most of the Chinese consumers use their smartphone to post pictures and comment their purchase on e-commerce platforms or social networks: they are much more active than the Americans or Europeans. They also share their experiences via dedicated apps such as XiaoHongShu (“little red book”) where girls flaunt and comment their purchase, creating communities of interest in the latest trendy studded shoes or about the new smooth-eyebrow product. Their reviews influence other netizens and are considered by e-commerce platforms which emphasize on the best-rated products. The consumer is now in the center of the offer deployment process instead of the brand and the distributor.

Moreover, with his smartphone the consumer can instantly ask his network of friends for recommendation. He is never alone during the purchasing process: word-of-mouth not only plays a key role prior but also during the purchase.

M-commerce is also going further with customization. When connecting to an e-commerce website, consumers are recognized and their preferences recorded during their previous visits are taken into account. Taobao illustrates it by giving its consumers access to their “footprints”, the history of actions on the website, which allows to target them offering products and discounts matching their needs. The mobile dimension adds geolocalisation, continuity and instantaneity. Digital manages to flip over positions: the consumer, often anonymous in the real life, becomes a well-known and taken into account customer in the virtual space.

But mobile also stimulates the convergence with the physical shop: both have complementary roles in which purchase experience, service, branding and customization are increased via the complementarity of touchpoints. For instance, convergence is seen with QR Codes, much more used by Chinese consumers than Western ones, to find information, promotions, services, and reviews in the physical store… or even to the online store! This convergence is also seen in the payment process, with e-commerce payment solutions such as Alipay and WeChat Wallet which are now adopted by physical stores like Walmart or Carrefour. Easier, quicker, more secure than cash or credit card, containing full and instantaneous information about the consumer, these mobile payment solutions are growing in all sectors of physical daily life such as, in Shanghai, in millions of grocery stores, taxis or restaurants.

Eventually, let’s note that the Chinese m-commerce mostly goes through multi-brand platforms and apps. Nobody wants to go on the slow-debit internet to look for a brand own website then go to another one to compare, type-in the 16 digits of your credit card, etc. when all brands are available on the same app with one-click away payment. This creates the necessity for brands to be present on Tmall-like platforms, WeChat stores, etc. and generates new positioning challenges as, for example, it is not obvious for a lifestyle or luxury brand to sell its products in a space where it stands alongside a multitude of mass market players.

Thus, a crucial challenge for Western brands is to grasp this revolution as fast as possible in order to gain new clients, many clients!, in China now, and to be ready to gain even more clients everywhere else tomorrow.

Article written by Christophe Jourdain, initially published in French in Siècle Digital.

Tags: digital, e-commerce, m-commerce, store

(*) According to Bain and company


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