The Chinese digital revolution is really showing us the future, the most advanced frontier of marketing nowadays. But along with increasing interest has come to a flurry of blog posts and reports advising marketers on what to do in this new, exciting digital market. With so much new material out there, how can someone find the best advice?
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China is a market of great potential. At GMA we made a list of 7 things that a good marketer needs to know about the Chinese market in 2018
Alibaba’s New retail
Jack Ma wants that in 2018 the focus is on “New retail“. He, therefore, wants to focus investments on innovations in retail (such as augmented reality and mobile apps), and digitalization of bricks-and-mortar.
The goal of new retail is to create a unique customer experience. The leaders have understood and are already working on it: Alibaba (the leading e-commerce operator in China) is developing new retail in physical stores with its partners Intime, RT-Mart, Auchan and Suning chain. Tencent is working on the digitization of Carrefour, Yonghui and Wanda Plazas supermarkets; an opening of WeChat Stores without staff and the creation (in collaboration with JD and Walmart) of 1,000 7Fresh supermarkets. In its mini markets, we can find among other things automated caddy that follows the customer in his purchases.
RED (Little Red Book) is the new Ecommerce Asset
Little Red Book (XiaoHongShu), which truly deciphers as “Little red book,” is a social web business shopping application situated in Shanghai. Gone for 18-to-35-year-old Chinese ladies, the stage enables clients to find and purchase extravagance items from abroad, share shopping tips and swap form thoughts. With in excess of 15 million enlisted clients and half-year offers of 700 million yuan (about $109 million) as of the end of September, the application has quickly picked up the consideration of customers and financial specialists both in China and abroad. Its most popular products include cosmetics and beauty products hard to find in China. The site has strategic partnerships with many U.S., Japanese and Korean brands, including Japanese skincare company SK-II, designers Vivienne Westwood and Anna Sui, and nutrition company GNC. RED also has mini guidebooks for shopping in the U.S., France and other fashion meccas.
Tmall B2D (BUSINESS TO DISTRIBUTOR)
Tmall B2D is an incredibly innovative new concept that will revolutionize e-commerce practiced until then. This new system reverses the traditional distribution chain and allows brands to connect to distributors, choosing who they will entrust their products among the 85 000 Chinese distributors listed. Tmall B2D gives brands incredible permeability on the present market and expedites them a platter. Starting now and into the foreseeable future, the brands pick who they endow their items too! The business person would now be able to pick his wholesaler on the Tmall application similarly that a purchaser would reveal a rundown of items on his smartphone, before picking the correct item and place it in his bin.
Following the New Chinese Customers trends
Fresh produce is booming in Chinese marketplaces with a growth of almost 60% in 2017. The sector generated more than 18 billion euros in sales (139.1 billion Yuan). For example, JD.com (originally an electronics marketplace that could be related to a competitor of Amazon) offers a special fresh products tab. It even includes recipes to encourage the purchase of vegetables, fish, fruits … But e-commerce operators go further by opening physical stores: JD.com opened its first supermarket offline 7FRESH fresh food in Beijing in January. Consumers can race directly but also order on the app and come to withdraw their purchases in store.
Alibaba plans to open nearly 2,000 Hema Fresh in the next 5 years. The Hema stores also provide customers with restaurant areas to choose fresh products to eat on site that are prepared on demand in the kitchens of the stores.
The Chinese cities are categorized as “tier”, level: from 1 to 5. The first level includes the megalopolises of the country such as Beijing, Shanghai, Guangzhou, and Shenzhen. The second tier includes the capitals of the largest provinces and some large cities in strong growth. These cities focus and attract talent on key industry and service sectors. The locals see their standard of living grow and become more and more demanding consumers, these are cities like Hangzhou, Ningbo, Chengdu, and Dalian. Third, fourth and fifth tier cities are “small” (China-wide) cities, though often they exceed one million people. They have a strong growth in wealth due to rampant urbanization.
China currently has 140 cities with more than 1 million inhabitants and 20 cities with more than 5 million out of a total of 600 cities. The level of urbanization of China is expected to reach 60% by 2020, which suggests a huge growth in offline and online consumption and therefore a good potential for companies selling in China. Indeed, in recent years, e-commerce data has enabled players to see the emergence of new demand in smaller cities and rural areas. In order to respond to this, Alibaba has decided for several years to concentrate its communication on these regions but also to carry out more concrete actions by creating “Taobao villages”. These are nurseries of e-traders: Alibaba helps farmers sell their products on Taobao. These operations are now driving up the growth of its e-commerce platforms. Pinduoduo has also integrated this principle and conducts its own initiatives. (Pinduoduo is the third e-commerce app in China behind Taobao and JD.com). These “small” cities become the playground of these giants who are always looking for more new consumers.
In 2018 between Beijing’s support, the lack of regulations on the protection of personal data, and the massive adoption of the smartphones: China is among the best placed to lead the revolution of AI. In China, the impact of AI in everyday life is already visible through the innovations we discussed in the previous points. At present, all technology companies in the country, led by giants Baidu, Alibaba and Tencent are investing in the recruitment of experts in AI, research centers and data. They compete with the best of their American competitors Amazon, Google or Microsoft.
Tencent to name just him, currently using the mountains of data he collects conversations made on WeChat and QQ in many projects. Tong Zhang, head of Tencent’s “AI Lab” recently said that “all of this data could be used to form machine-learning systems and thus enable significant advances in the field of language. These advances could be useful in many applications from document analysis to PDAs. And the city of Beijing, meanwhile, intends to take advantage of this boom and invested 1.8 billion euros in a research park to accommodate 400 companies. This “IA Research Park” is supposed to bring back 6.5 billion euros by 2023.
The KOL are the New Media
KOLs are influencers, literally opinion leaders (Key Opinion Leader). In China, KOLs are people with a very strong media presence who influence consumers in their purchases. They are not only followed for the information they transmit but also for their life choices, their ideas, the shows they present … They are real inspirations for the Chinese. This goes far beyond what can be known with YouTubers in Europe: Chinese KOL is so admired, that people offer them gifts to thank them for being there.
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