Originally published on Internet Retailer.
The combination of social media and mobile devices has become a way of life in China.
A lesser-known ancient Chinese proverb translates as “Dig the well before you’re thirsty.” In many ways, this beautifully illustrates the secret behind the mind-boggling success of mobile commerce in China. China is the world’s largest smartphone and e-commerce market, and some believe that China is an entire decade ahead of the West when it comes to mobile commerce. So what are Chinese commerce businesses doing on mobile that the rest of the world simply isn’t, and should start to emulate now?
View mobile not as a channel or tool, but as an integrated lifestyle
For starters, many hugely successful Chinese apps are developed by established market players like Tencent and Alibaba, who demonstrate incredible foresight in perceiving mobile as a way of life, and integrating services to support it. Unlike other parts of the world, mobile payments are actively driven by major third-party Internet and e-commerce companies in China, who ensure that the payment experience is integrated and frictionless for end users.
Rather than focusing on selling more devices with payment capacity added, as is the norm in North America, companies like Tencent and Alibaba in China weave payments seamlessly into services that consumers already use heavily, such as messaging apps, thereby powering immediate adoption. In addition, third-party payment providers in China are essentially escrow services that guarantee that no money changes hands until both buyer and seller are satisfied, driving up the trust factor in mobile payments. This has resulted in China having the highest mobile payment adoption in the world of 86 percent, twice the global average.
The fact that nearly one in five WeChat users are setup for mobile payments speaks for itself. Convenience, seamless payments, and security still remain the top reasons why smartphones are the primary shopping tool. Long before Chinese consumers felt the need to integrate payments into their mobile lives, retailers enabled it for them and made it easy and secure.
View shopping as a social, not solitary, activity
In the offline world, shopping is a social and often entertaining activity that oscillates between buying things we need and buying things that we want. Why should our lives on mobile be any different? Chinese retailers tend to look further than just monthly active users and daily active users, but instead around how regular users engage with their apps. In China, social is not merely media for advertising or engagement, but is a way of life. Rather than aggressively driving consumers to their own apps and properties, Chinese businesses have leveraged social apps like WeChat to enable mobile storefronts, seamless payments, customer support, social sharing and more, all in one place—in the apps where users are already spending time.
As social and buying are increasingly integrated, consumers are compelled to become content creators rather than just consumers, and use social channels just as they would use a shopping buddy in real life—for feedback, ideas, and comments. These features empower nearly 80% of Chinese consumers to share their purchases on social today, compared to between 30-40% in other parts of the world. By enabling end-to-end shopping well beyond their own app, Chinese businesses have enabled word of mouth and social virality with incremental effort, while creating shopping habits that stick. Nearly 70% of Chinese smartphone users shop on social media, and Chinese retailers have skillfully pivoted their mobile strategy around not just mobile apps, but around social apps such as WeChat .
View offline and mobile as one
While Chinese apps have the advantage of scale, they have succeeded in bringing offline and mobile worlds together by completely immersing users in services. Users can pay online or offline for products using the same payment systems, cementing payment adoption and loyalty. Retailers can therefore integrate offline and online purchase experiences to drive a seamless service that provides unparalleled user convenience. For example, users on the Nuomi mobile app can view virtual tables in a restaurant, see how many are occupied, understand waiting line times, and book a table without being physically present. Users can also buy mobile coupons to redeem when physically visiting the restaurant. In merging offline with mobile, Chinese apps have ultimately enabled mobile to become the gateway portal to everyday life for users .
Own shopping events with integrated guerilla marketing
Many Chinese retailers have successfully built their own shopping festivals, rather than waiting for typical holiday seasons as in other markets. Singles’ Day, hosted by Alibaba, dwarfs all the big American shopping days combined, and goes one step further in creating a unified shopping “theme” that excites consumers and drives brand value. Prior to the sale, Alibaba produced an entire TV special with products that consumers could buy from mobile or TV, appealing to users on all channels—and ultimately, porting that interest onto mobile.
Before the Chinese New Year, Tencent launched a campaign in which advertisers gave away nearly US$80 million of cash to WeChat payment users, prompting them to gift money and ultimately shop and pay on WeChat. That resulted in more than a billion gifts being sent and brought nearly 200 million paying users on board. Chinese retailers don’t just view guerilla marketing as a resort for smaller players, they use their competitive position and funds creatively. Unlike most advertisers that spend on user acquisition uniformly, we’ve seen Chinese mobile apps spend heavily on burst campaigns that generate maximum buzz and results.
Focus on the proof in the pudding
Delivery is often the only real offline touchpoint for a consumer, and Chinese retailers truly deliver in this aspect as well. Retailers in China successfully bridged the last mile with consumers long before other countries, with same-day delivery and free pick-up facilities. For example, JD.com built up its entire delivery network comprising more than 50,000 workers and 150 warehouses to ensure that stellar customer service extended to the final mile.