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Top lessons from China’s e-commerce-driven middle-class consumer

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The rise of the middle class in China is an important driver of global economic growth. With increased affluence and sophistication in both social and mobile technologies, Chinese consumers are looking for a more connected buying experience.

Chinese consumers now use social media to learn more about brands and products, make purchases on social media platforms and instant messaging services such as WeChat and also use social media such as Weibo to share their opinions and post product reviews, which are highly visible to their respective communities.

Price is becoming less of a driver. They are increasingly demanding higher quality products that are tailor-made to their needs. Value remains important as customers are well informed about global prices since most of them travel physically or digitally. Therefore, both foreign and Chinese brands need to engage strong brand influencers in these communities, leverage social trends to build strong brand values and unleash the power of social commerce.

As a whole, the advances of China’s technology infrastructure are exploding and robust enough to develop a high level of connectivity in the market, linking consumers, retailers and manufacturers to boost both domestic and international e-commerce growth.

Platforms versus branded websites

From my observation, there is a higher inclination for Chinese consumers to purchase on platforms as they offer multiple choices, well-accepted product presentation and information, payment gateways, peer ratings and regular promotional activities. One important statistic is that Tmall by Alibaba controls over more than 40% of total B2C business in China.

Through my market research, small and medium-sized enterprises typically generate very low conversion rates on their own branded website even though they provide reliable and accurate information as well as authentic products. This shows that Chinese consumers are increasingly looking at trust and reliability of the site with a multitude of choices being available to them to build credibility and instil knowledge about the products and services offered by merchants.

However, for luxury brands, they may do better building their own storefronts rather than being on one of China’s e-commerce platforms. Chinese consumers are catching up very quickly and learning so fast about luxury brands through social media and are capable of finding the brand sites directly. The upside of having a branded website is that there is more ownership of content and client relationships than what platforms typically provide. Therefore, I will highly recommend brands to establish both their branded websites and also manage their online presence on key platforms and search engines to ensure consistency when promoting these official brand assets to their respective market segments.

Mobile shopping

The staggering amount of mobile commerce in China itself is an important phenomenon. Enterprises who are in China or expanding to the region will need to have a targeted focus on mobile marketing. This requires an innovative approach and also renewed adaptation to the fast-changing China business and customer ecosystem in terms of user experience, design, payments as well as connections, with social media applications. While traditional PC digital marketing is all about traffic and conversions, mobile marketing is all about user engagement which requires advanced customer personalisation and deeper social engagement to display relevant branded content.

With such a high degree of connectivity and sharing, I foresee that customers services will be an important differentiator for many digital businesses in China. With better access to information and the emergence of sharing economy, customers are paying attention to service (time is taken to deliver the convenience of returns, effective refund services, customer service via WeChat etc.). China customers are not just buying domestically, they are buying more from global websites due to higher purchasing power and also better brand knowledge.

Therefore, buying overseas through Daigou (group buying) remains a hot trend due to price arbitrage. I observed that international websites are increasingly targeting China to build a direct channel to the Chinese consumers. In the face of this, local platforms have improved their customer service standards to further differentiate themselves from overseas competitors.

O2O in China

Online to offline is an important and growing trend in China. Having an exclusively online presence will not create a sustainable brand. At each end, the brand will need a face to face touch point. New technologies and infrastructure have paved the way to merge online and offline into one holistic shopping experience. One prominent example is instant messaging technologies such as WeChat, which enables them to ‘shake’ and receive exclusive offers and services in-store. I strongly believe that China will see more online brands opening up pop-up stores and physical locations.

We are already seeing this as online brands aiming to improve customer engagement by delivering new and different experiences. This could be in the form of a different way of physically interacting with a brand through a pop-up store or experience booths or through digital means such as video, music or live streaming events. This integrated experience will better allow China customers to gather more data and make more informed choices about their purchases. There is a trend among big brands like Apple, Starbucks and Burberry of working with social media influencers and celebrities to generate targeted retailer and user generated content with key opinion leaders. This allows better focus on the digital channel as a means to enhance the customers’ offline store experience, which merges with online purchases for more effective omnichannel integration.

Innovation and digital retail in China

Chinese consumers are experiencing a digital paradigm shift. I predict that the trend is moving from the information age, which focuses on the accumulation of data through social media mediums such as Weibo and WeChat to transition to the Experience Age, which focuses on the customer's experience. This can be through live streaming, the consumption of physical product or services via on-demand platforms such as food delivery services (Ele.Me) or ride-sharing services (Didi Chuxing).

The growth of O2O will only mean that the brands have to maintain a consistent online and offline brand image to rapidly build something to scale and meet the evolving needs of the China consumer. Distribution and operational agility are key considerations for an enterprise, and the digital world can enable them to better serve customers by connecting the in-store and online experience through these omnichannel capabilities.

Lionel Sim is founder of China Tech Roundtable.

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Most marketers claim creativity ‘harmed by digital advertising growth’

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Most marketers claim creativity ‘harmed by digital advertising growth’

Marketers face a challenge as they try to balance technology innovation with creativity, with digital growth in advertising coming at the expense of the quality of creative, according to a new survey.

The study, from Sizmek, surveyed more than 500 business decision making brand-marketers across Europe and the US, found that over two thirds (67%) believe digital growth in advertising has come at the expense of the quality of creative.

When looking at the impact of AI, 84% understand that it is entirely useless without the right creative input to support it.

The post Most marketers claim creativity ‘harmed by digital advertising growth’ appeared first on Netimperative – latest digital marketing news.

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JWT partners with University of Sydney to explore tech-driven creativity

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J. Walter Thompson has formed a partnership with the University of Sydney to explore how technology can be applied to the creative process and develop creative solutions for digital transformation in China.

The partnership will kick off in December 2018 with an Industry and Community Project Unit (ICPU), that will see 16 University of Sydney students from interdisciplinary areas form small teams to develop creative, ethical and context-sensitive solutions over four-week intensive courses. The University introduced ICPUs earlier this year, to provide units of study based on authentic problems and issues set out by industry, community and government organizations.

Students will be based in Sydney for the first week, where they work through the project brief, background research, and information, as well as country information. They then undertake intensive targeted research with their project groups. During weeks two and three, students will work in Shanghai with JWT China.

The final week will be spent back in Sydney, where they write up their assessment task and undertake interactive workshops to encourage critical reflection on their experience and transferability to career development.

“Ultimately the partnership will work towards what actions creative agencies can take now to deliver efficiencies across their business, and to ensure creativity is able to effectively adapt to the implementation of artificial intelligence and new technologies,” said Carter Chow, the chief executive officer of JWT China.

“We're particularly interested in exploring the connection between human and machine learning and how this will change roles in the future. We hope this is the start of many innovative and future-facing topics that both JWT China and the University of Sydney can work together on solving for the creative industry.”

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Circles.Life unveils Discover, its new AI-powered lifestyle feature

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Digital telco Circles.Life has launched an AI-powered feature called Discover in its app to allow customers to explore interesting events happening around the city.

According to the Singapore-based telco, the more Discover is used, the smarter it gets in recommending events that users are most likely to go to. This new feature, which is personalised based on the interests of individuals is available for everyone, including users who are not Circles.Life’s mobile customers.

It is optimised for local events in Singapore, enabling users to explore trending events in the country, customises the event suggestions based on the users’ interests and allows users to share the events on social media, and invite their friends.

“Circles.Life is setting up the world’s most personalized digital platform leveraging its innovative telco stack and proprietary data platform,” said Rameez Ansar, the co-founder of Circles.Life.

“Two years after the launch of what is now the leading no-contract mobile service in Singapore, we are taking a step further. Discover is the first AI-powered product outside our core mobile service. It is available for ALL users inside the Circles.Life app!”

Last month, in an attempt to get consumers to re-evaluate the value of a mobile contract and challenge the assumption that it always saves them money, Circles.Life explained to The Drum why it used the country’s favourite food, chicken rice, to prove its point.

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