So far, the year 2020 has been a hard-to-forget milestone for the world economy. Never before have businesses across the world had to face such enormous challenges and significant uncertainties about their future.
An Overview of the Current Chinese E-Commerce Landscape
China has not been immune to the pandemic's effect, but it is recovering faster than expected. Especially in the E-commerce business, which has somewhat benefited from the COVID-19 epidemic. Although growth in 2020 is lower than initially expected, it continues to show positive signs and the overall forecasts are still favorable for China, so that by the end of 2020 it will become the largest retail market in the world.
As a result, Chinese consumers are expected to spend $2.090 trillion on retail E-commerce in 2020, representing a 16 percent increase over 2019. A considerable part of these transactions will occur through social E-commerce, as tools like WeChat Mini Programs and similar programs continue to increase in popularity, which are good reasons to invest in this industry and boost your E-commerce in China.
Top 5 best practices to boost your E-Commerce
What can help your E-commerce platform to gain more visibility and generate more profit?
We will now discuss the five best practices that will help your business thrive. Some may be actions you are already implementing, but they will still need your attention in the coming months.
In recent years, private traffic has become a hot topic among marketers in China in search of cost-effective ways to increase their consumer base.
What is private traffic?
It refers to traffic that the brand can manage privately without relying on third parties or paid channels. For instance, if a brand has a proprietary app or a WeChat Mini Program, it can use these channels to attract new users and stay connected with them. They do not need to rely solely on external platforms like Tmall and JD in which they have no control whatsoever over the traffic.
Since the summer of 2019, private traffic has demonstrated a positive trend. An increasing number of consumers are now willing to join private traffic channels because of the benefits that come with it. For instance, brands can use these channels to engage with their customers, providing shopping assistants or KOL to guide them in their buying decisions. Additionally, brands can establish and maintain personal relationships with customers. The result is that the customers will enjoy a more human-like and personal experience while shopping online. This is the perfect win-win scenario that will benefit your business.
How to Create Your Private Traffic
Creating your private traffic involves a savvy use of available digital and web solutions coupled with a powerful marketing strategy. You may develop a web app to support your online shop or, specifically in China, invest in a WeChat Mini Program. WeChat is an effective way to stay in touch with your customers and create a personal experience. It is important to use these social media platforms and other digital tools to distribute relevant and engaging messages that can redirect traffic to your E-commerce platform. If your customers feel connected and your marketing strategy resonates with your audience, they will share your message, thus generating direct traffic.
WeChat is very useful when generating private traffic for cross-border E-commerce. Ma France is a case in point. QPSoftware helped them to develop a cross-border WeChat Mini Program in addition to their WeChat Official Account. The new Mini Program has been effective in generating private traffic, reaching more Chinese customers, simplifying the purchasing process, and increasing customer loyalty.
Omnichannel Retail/Online to Offline (O2O)
Omnichannel retail is not a new concept, but it is still very important when boosting your E-commerce platform. Especially during the COVID-19 pandemic, companies with a strong omnichannel structure have been able to meet the needs of their customers. This approach will continue to be relevant, even in the future.
What is O2O Retail?
Omnichannel retail online to offline refers to a business model in which online and offline channels tightly cooperate with one another to acquire more customers, meet their needs, and boost sales. Online channels are used to promote products, services, and promotions, which result in the customer visiting the brick and mortar store and finalizing the purchase. Typical examples of this are coupons received by email or social media that can be claimed with the store cashier at checkout.
Although having the customer visit the shop instead of closing the sale online may seem outdated, it still appeals to a large audience. For instance, in China, 82 percent of luxury consumers prefer a combination of online and offline channels to make purchases. This is a good indicator that an omnichannel strategy is still valuable.
It is not by chance that companies like Alibaba and JD are opening outlets all across China. These are new generation shops where people have an experience that is as close as possible to online shopping. For instance, they can use a smartphone to scan products, get detailed information, receive suggestions on alternative items available, and so on. The success of this formula is an indicator that a portion of consumers still feel more confident if they are offered the option to combine digital and traditional shopping.
How to Create Your Omnichannel
To create your omnichannel retail, you need proper planning and organization. You must take full advantage of mobile apps, social media, push messages, proximity services, and any other tool you may find helpful in spreading your message. WeChat Mini Programs, for instance, are especially successful for branding, generating brand awareness, marketing, and increasing loyalty. An efficient CRM is an excellent solution to maintain continuous communication with your customer base.
Your order management system must be trustworthy and reliable. Once the customers visit your store to buy an item or pick-up an order, their experience must be as smooth as possible. Otherwise, your marketing efforts will be a waste. For instance, your E-commerce platform, WeChat Mini Program, or something else must always be coordinated with your warehouse to return real-time information about product availability and make sure that products are readily available at the facility once the customer arrives.
Social commerce must not be confused with social media marketing. The latter has the goal of promoting a product or service and redirecting the user to a website or an online store. Instead, social commerce allows the user to complete an order and check out directly from the platform they are currently using.
Social commerce is forecasted to grow $242.41 billion in 2020, representing 11.6 percent of the total retail E-commerce. Recent studies indicate that these figures will double by the end of 2023. These numbers are massive and suggest an excellent opportunity to boost your E-commerce through this channel.
What Social Apps Can You Use for E-commerce in China?
Three apps in China work well for social commerce: WeChat, Xiaohongshu, and Pinduoduo.
WeChat is the most popular social media in China. It is versatile for your marketing operation and to sell online. Although you can open a WeChat store, the newer WeChat Mini Programs are now more popular and are widely used to sell online.
Xiaohongshu is an E-commerce platform that differentiates itself because of its robust social features. For instance, it allows users to share content with their fans and interact directly with them. As a brand it could be a bit challenging to grow your fan base unless you are cooperating with influencers (KOLs or KOC). Therefore, if used properly, the platform can be useful to make your content go viral or be promoted by word of mouth.
Pinduoduo is the youngest among the three but has already been received favorably by the public. It has the advantage to boost group purchases, offering attractive discounts based on the quantity of products purchased online. The platform attracts users due to promotions that can be accessed merely by opening the app, inviting other users to access the platform, or sharing links.
You may be familiar with Key Opinion Leaders (KOL), but the concept of KOC (Key Opinion Consumers) may still be foreign.
For several years now, KOLs have played a major role in promoting brands and boosting traffic for businesses willing to pay for their services. However, KOLs have become a very costly marketing channel, and small businesses often cannot afford to have one of them in their ranks. Therefore, recently we have seen a surge in KOC marketing.
KOCs are everyday consumers with a network of followers (usually not too many) with which they share mainly product reviews. From a marketing point of view, the role of a KOC with just a few hundred followers may seem irrelevant. However, if you have many of them in your network, you can create a very active marketing channel, one that is enhanced by the fact that their reviews are perceived as more genuine because the brand doesn't necessarily pay for them.
A case in point is the brand Perfect Diary. The company was one of the first to understand the underlying value of KOCs. Leveraging the popularity of their virtual personal assistant, Xiao Wanzi, they created a network of hundreds of WeChat groups where customers communicate, share experiences, and offer suggestions to each other. Altogether, these everyday users have become a massive marketing machine that boosted Perfect Diary's popularity and performances.
How to Attract KOC?
One way to attract KOCs is by using gifted products. You must select the KOCs with the highest potential, send them samples of your products, and ask them to post a review. In time, you may establish a continuous collaboration with those who bring the most value to your brand.
Another efficient technique is to make the best use of your WeChat ecosystem. For instance, you can add a blog to your WeChat Mini Program. Your customers will use this blog to express their opinion, offer insights, and share content. Your role is to keep the blog alive, offering input to promote new conversations continuously. In this way, you give voice to your audience, and they will work for you by increasing your brand awareness and helping you to close more sales.
Short Video and Live Streaming
Videos have been a critical marketing tool for several years, and short videos that are highly engaging and straight to the point continue to be attention magnets. Additionally, the new trend is to use live-streaming events to engage the public.
Live-streaming works exactly like a live-tv show. Unlike pre-recorded videos, live videos take place in real-time and can be set as private or public. Hundreds or even thousands of people can watch it, interact with it, and comment live. Thanks to reality TV's popularity, live-streaming tends to attract a vast audience, offering unprecedented opportunities to spread your marketing message.
In the luxury industry, videos are still the main feature that brands use to promote products. However, since 2019 live-streaming events have gained tremendous popularity, pushing more KOL to use this channel to influence the audience. In October 2019, the live streamer Viya was able to score an unbelievable record of 353 million RMB in sales in just a single day. Therefore, companies are now investing more in live-stream events, and the race among KOL to become the next Viya is on.
How to Use Live Streaming for Your E-commerce
For live-streaming events to produce results, there a few things to consider. First of all, you need to partner with a KOL that is popular and relevant to your brand or products. Secondly, you must set the goal of the live event. There are mainly four types of promotions you can use.
Flash Sale: You use the live event to offer products with significant discounts. Unfortunately, you will not make a profit during these events. It may even be a loss for the company. However, it is an effective way to attract an audience and encourage them to follow future events. This is especially true if you are using these channels for the first time.
Viral products: Its purpose is to present cost-effective products, with a good look, and with the potential of becoming viral. During the event, the vlogger promotes the products, possibly making careful comparisons with similar products from your competitors. The KOL needs to be closely connected to the products advertised.
Gift after purchasing: Using this model, you offer a gift or a series of gifts as a reward for purchasing your products. If the gifts appeal to your audience, it will be a good incentive to close the purchase.
Limited offer: This type of sale exploits the concept of scarcity. The products presented during the live-streaming event can be bought at a discount price, but only for a limited time or the items available at a special price are limited. This approach is usually very effective since it pushes the buyer to act quickly out of fear of missing a unique opportunity.
Which Platform to Use for Your Videos?
There are several options available to broadcast your videos or live-stream events.
This platform is especially good for a female audience since it mainly focuses on beauty products, fashion outfits, and lifestyles. Besides featuring videos, the platform now supports live streaming.
WeChat is what Facebook is in the western world, and it can count on over 1 billion users daily. The platform has implemented the ability to host live events for Official Accounts and some KOLs. We expect these features to be enhanced soon. Moreover, a new section called "Channels" has been introduced where you can broadcast short videos.
Weibo relies on over 500 million active users monthly and is not new to videos. Since 2016 it has been possible to host live-streaming events on the platform. In time, Weibo took over the live streaming platform Yizhibo and linked the two platforms together, giving their videos an even larger exposure level.
Taobao is renowned for being the leading E-commerce platform in China. However, to increase sales, Taobao is now using live-streaming events, which are proving particularly effective in boosting sales. All you have to do is understand what product customers are looking for and organize your live event to make your products visible.
Despite the undeniable challenges, there is still a flourishing market for E-commerce in China. Foreign businesses can access the local market and address an audience with ever-increasing spending power. They can engage with an audience that is highly responsive to marketing messages.
Implementing trending marketing techniques will play a critical role in boosting your online shop. Moreover, do not underestimate using local experts to implement digital tools and web solutions that are sought after in China. Having insight into the local digital environment and buyers' psychology will give you the advantage you need to succeed in China.