Uniqueness of China eCommerce Landscape

June 2020

When studying the global eCommerce market there is no doubt that trend and technology developments in China must be studied. The reason is not because that China has become the largest eCommerce market in the world or is still rapidly growing or is due to the unique digital infrastructure with the “Great Firewall”. The reason why China is so unique is driven by the following key factors: Strong mobile first behaviour; advanced social eCommerce models; high trust towards digital payment systems; and innovative new retail thinking with seamless integration of offline and online experiences.

Below we have put together some important behaviour aspects which we believe are unique and important to be aware of when operating in the Chinese eCommerce market.

New retail - the new standard

New retail is a combination of paring “convenience with experience” in conjunction with big data analysis to create the ultimate consumer experience. New retail therefore integrates online, offline, logistics and data in a single value chain. In connection with this development, online retail stores have in recent years started to launch offline locations while offline retail stores have included online experience as an integrated part of the consumer journey. It is therefore important that online sales and marketing touch points consider the physical experience aspect for Chinese consumers.

Important role of eCommerce festivals

Chinese consumers respond strongly to sales & special promotions, and therefore eCommerce festivals play an important role for businesses which want to achieve higher sales and gain brand recognition. Alibaba’s Singles Day 11.11 is by far the most well-known shopping day in China and it continues to grow and sets new records year-on-year. In 2019, Alibaba sales topped USD 38 billion in just 24 hours. Chinese culture provides a range of shopping festivals and many of them are very relevant depending on your brand category. Below we have provided an overview of some of the biggest eCommerce festivals which are important to know.

Chinese New Year (Jan – Feb) is the most important holiday also known as the Spring Festival. This is the holiday where Chinese consumers exchange gifts and the food & beverage category is especially particularly strong during this period.

Valentine’s Day (14 Feb) has become more popular in China for the eCommerce market and the female category is strong during this period for beauty products, flowers, and accessories.

International Women’s Day (8 Mar) was first time celebrated in China in 1949 and in recent years key marketplaces have taken the opportunity to utilize this day to target Chinese female shoppers with a strong category in the beauty segment. Each marketplace promotes the festival differently: Tmall call it Queen Festival; JD.com calls it Butterfly Festival; and Jumei call it Goddess Festival.

Children’s Day (1 Jun) advertising mostly targets parents, who are increasingly expected to buy gifts during this festival. The promotion normally starts at the end of May and lasts through the first week of June.

618 (18 Jun) is China’s second most known eCommerce festival after Single’s Day. The festival is seen as a Mid-Year Sale for Chinese consumers. Combined sales at Alibaba and JD.com reached over USD 136 billion 2020.

9.9 Wine Festival (1-9 Sep) was originally announced by Alibaba’s fonder Jack Ma in 2016 as online retailers’ gifts to China’s wine enthusiasts. The festival last nine days from September 1st to the 9th. It is not a coincidence that the wine festival is place at this period as nine “9” in Chinese is pronounced as alcohol and therefore logically celebrated in this period.

Singles’ Day (11 Nov) also known as double eleven “11.11” in China. The day was originally designed by Jack Ma as a day for all singles to celebrate themselves as the four number ones “1” in the date symbolize single life. The Festival was launched in 2009 by Alibaba and since then the sales revenue has seen impressive growth every year.

Double Twelve (12 Dec) is a festival which was created for those who are left unsatisfied by Singles’ Day. It is basically an end of season promotion which is hosted primarily by Alibaba.

When operating in the Chinese eCommerce it is essential to tap into these festivals and requires a smarter relationship between third parties & marketing creatives to keep a brand’s finger on the pulse of China eCommerce.

KOL Kingdom

KOL stands for Key Opinion Leaders and are working like what we know as bloggers in the rest of the world. However, in China KOL marketing is an essential element of succeeding in the eCommerce market as Chinese consumers are heavily influenced by KOLs with over 65% mentioning that social media plays an essential role in their shopping choices. KOLs can range from celebrities to actual consumers with high follower bases across different platforms and communication method. More recently eCommerce live steaming has especially become more important and has had a large increase especially due to the covid-19 situation. Therefore, it can be noticed that more and more KOLs are making use of this method to showcase the usage of the products in a more engaging manner.

Live streaming has become the new era in China, and it can be seen across all businesses and categories. Over 300 celebrities join Tmall Live Streaming during 618, such as the famous full-time host Li Jiaqi, Weiya, etc. Over 600 CEO and top management people of large companies like Huawei, Lenovo and L’Oréal also joined the festival to promote their products.

The important element of utilizing KOLs for businesses is not finding the KOL but to find the right KOLs which fit the products/Services.