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8 Lessons from Chinese Internet Superstars

S.R. Schroeder // Last Updated: 18 July 2016

You've heard the hard-to-grasp numbers, hundreds of millions of internet users and staggering ecommerce figures that blow the US and the west away. But even with that incredible growth most outsiders who have only ever quickly or even accidentally glanced at a few Chinese websites might assume that the west would still probably be a leader in conceptual and technical developments. Reconsider those assumptions. Chinese websites and apps don't let conventions hold them back and are laser-focused on their target markets and users demands.

 

Here are 8 reasons why they are rapidly breaking new ground:

1. E-Commerce Trusted Hubs Can Dominate

With extensive urbanization in China, retail space is at a premium. Online e-commerce hubs are taking advantage of this trend, by providing the kind of big, all-in-one malls online where people can shop for everything. Internet buyers in China order almost everything online, from toothbrushes and stationery to luxury cars. These all-in-one hubs provide buyers with a one-stop shopping experience much like a physical mall. In addition to that, buyers prefer the convenience of having a single point of  payment for various and diverse products as well as managing communication with regards to deliveries at a single point of contact, accountability and trust since the vendors are company approved and adhere to that company’s policy.

Another reason for this model’s success is that shoppers in less developed areas now have easy access to a wide range of products and deals, which is powering consumption. According to an analysis by McKinsey Global Institute, online channels will have potentially driven up consumption by 4 to 7 percent between 2010 and 2020.

 

Unlike in the west, many brands are skipping physical outlets altogether and going straight online. Many foreign retail brands are also taking advantage of this trend by directly launching online stores.

The key difference with the west however is the enhanced trust factor and demand from the Chinese shoppers who are more wary of scams and look towards the larger, more popular e-commerce hubs and malls as more convenient and secure. With increased trust always being a plus for online shoppers, western developers may want to consider the possibilities to learn from the e-hub models like Tmall. The example range in the west is dominated by Amazon and eBay but many other platforms are also successful, such as Etsy and to a lesser extent, indirect sales channels like Pinterest.

2. Extensive Product Displays for the Win

Western markets have always believed in the minimal aesthetic, more so than their Eastern counterparts. minimalism has dominated the marketplace, especially when it comes to ads and brochures.

Since the advent of e-commerce, this attitude now stretches to include websites and product displays as well. In China, the strategy that is gaining ground is exactly the opposite.

Instead of going basic and minimalistic, they overload each product display with information. A typical product display on Alibaba contains extensive information about the product and its specifications, verified information about the product and the company, company profile info, as well as its transaction history along with graphs. In another example, a display for a cocktail gown on LightInTheBox, another shopping website contains multiple pictures from different angles, specifications about the garment, along with other relevant information such as size chart, how to take measurements, etc.

The reason why this strategy works is because it comes very close to the physical shopping experience where you can perceive the product from different angles, get an idea of its size and proportions, and have detailed information about its functionality, which you would probably get from a helpful sales assistant. It saves the users the time to go on different sites to research the product, look for images, specifications, or reviews for it.

Western markets need to learn from this and explore the entire potential of product displays. With the shift from physical counters to online portals, the strategy of product displays needs a complete overhaul and not just slight tweaking of viewpoints held up to now.

3. Everything and the Kitchen Sink on the Screen in View

Rather than having one or two areas of focus and guiding the customer’s attention through the page, as is the trend elsewhere, most websites in China pack a lot of information on the screen. They let the customer pick and choose their areas of interest as they keep going deeper into the site. Even the apps and services that compete well are the ones that provide a ton of functionality, as opposed to the basic ones.

The drawback with this kitchen sink functionality is that it can leave the inexperienced consumer feeling overwhelmed and ‘lost’ in this cornucopia of information. The Chinese companies have overcome this barrier by providing an instant online chat system where real people quickly answer questions and even guide them through the website and the purchases if needed (more about that below).

The ecommerce giants in China like TaoBao understand and cater to the fragmented needs of the customers. Online markets in the West will need to understand that the needs of consumers will get more diverse in the future and that they will have to widen their range of suppliers as well as their portfolio of products to stay in the game. And when you are catering to a wide customer base with an even wider range of interests, the minimalistic displays with a few products will not do justice either to their portfolio of products/services, nor to the needs of their customers.

4. Live Online Customer Support Chat Service is Powerful

When you are catering to the ever diversifying needs of your customers by building a huge portfolio of products and a large network of suppliers, your website is necessarily a complex affair with multiple areas of focus with many different products/offers being given prominence at the same time. Which can often be overwhelming for the customers. Online chat then is a necessary tool that works brilliantly with the vast websites. With support personnel well versed with various aspects of the business, such as products and policies, can answer customer queries instantly. Here is why it works:

  1. Online chat boxes in most websites give them quick answers to their queries, enhances the shopping experience by personalizing it. People love to be able to chat with customer sales and support instantaneously. Quick access to support personnel. Easier than calling – can be accessed multiple times unlike calling – won’t hesitate to ask no matter how small the info required is, written info reduces ambiguity. Boosts sales by reducing confusion.
  2. Cross selling on chat that is focused on customer needs, also leaves customers happy while boosting profits for the business. E-tail giants like Alibaba and Tmall have a very robust instant chat service with translates to a better customer experience

5. Mobile-First to the Extreme

In China, mobile is an important part of any company’s marketing strategy, one that is included in the business model. Some businesses are skipping the desktop sites altogether, and focusing only on mobile and many have gone mobile only.

There is much more optimization for mobile in China, and much higher e-commerce sales and ratio. Often they do not use responsive sites which may seem counterintuitive, rather designing different sites for the desktop and the mobile device. The website for the desktop is not treated like the basic model and adapted to the smaller screen. Mobiles get their own websites specifically tailored to the requirements of the small screen and the specific uses of a mobile website.

Considering the increasing importance of mobile devices in our lives. Unlike in the past where phone calls were the focus mobile is used for information, entertainment, shopping, making payments and accessing services such as reservations and booking. Western companies should consider leaving behind the legacy systems and processes and thinking forward in terms of exploiting the vast potential of the latest trends in technology. 

Local apps like WeChat dominate the marketplace with their versatility and an unbelievably wide range of uses with its ‘app within an app’ functionality. Mobile users can and do use WeChat from everything to hailing a cab to paying their bills. Being able to make payments from within the app also makes it a convenient shopping app. For businesses the simple rule is, if you are not on WeChat, you don’t exist.

6. Online Delivery and Convenience Services Find Demand

Direct interactions between consumers and retailers constitute only a fraction of online retail transactions in China. A large proportion of transactions are happening in the online marketplaces like TaoBao and PaiPai.

According to 2012 McKinsey Global Institute analysis report, marketplaces’ share in China was 90% of the $190-$210 billion e-tailing market, whereas that of the USA was about 23-24% of its e-tail market which amounted to $220-$230 billion.

Another trend that is catching on is the online to offline services model where online apps and websites are used to order offline services such as cab rides or food delivery. One factor contributing to its success is that the Chinese are Unafraid of imitating successful models elsewhere in the world and tweaking them to suit their requirements. At the same time, they are also coming up with unique solutions for their specific needs. The food delivery giant Ele.me is a classic example.

The merger of Meituan, a deals website, with Dianping, a restaurant review phone app will now create the largest platform for online to offline services in China so far. Mergers like this are an indication of the significance and demand for these kinds of services at the moment.

The companies in the West also need to tap into the potential of the demand for local services by assessing the unique needs of their target users. And when they are doing so, should not shy from taking inspiration from successful models elsewhere in the world.

7. Making Mobile Payments is Easy in China

The Chinese look upon any kind of debt unfavorably. This explains the lack of response for models based on systems like American Express or Visa. Trusted third parties or online wallets are the preferred mode of payment. Alipay which is similar to Paypal, is the most popular choice followed by TenPay and China UnionPay.

Mobiles in China are close to being the magic portal to everything by letting users to use their phone as convenient payment device. Users can just scan the QR code from their phone for payments up to a certain amount. No password or pin is required. Many sites claim that their mobile payments are quicker and easier than online payments.

According to recent reports Alibaba, the company that owns the popular payment system called Alipay, is looking to partner with Apple. If Alipay makes the transfer to NFC technology, users will be able to make payments with just a tap of their smartphone on the terminal.

The vast potential of a mobile device which is convenient, handy and universal should not be ignored when it comes to payments. If companies in the west make mobile payments quite as quick and easy as in China, they will see the advantage reflected in the form of higher buyer engagement ratio.

8. Use of Open Source to Transform the Innovative Process

Companies are involving users in a very real way and using their feedback and expertise to improve their products. The fan-community built by the Xiaomi, which is known as mi fen, is a good example of that. This community of users and fans provide feedback and recommendations on the design, features, accessibility, and other aspects of the mobile devices designed by the company.

The People’s Car project was launched in China by Volkswagen in 2011. It generated a huge interest with the engagement of as many as 14 million people. Over 250,00 car ideas emerged, which culminated in the creation of a People’s Car which has some pretty neat features and a final result that is a great blend of innovation and usability.

Even though customer feedback is being increasingly heeded, companies in the West are yet to make use of the vast potential of crowdsourcing on any large scale. Designing still uses a top-down approach. If they can learn to harness the consumers’ ideas right from conception and design, it could lead to some revolutionary ideas/the next big thing.

ABOUT THE AUTHOR

S.R.
Schroeder

Founder of Seirim, S.R. focuses on the art and science of web design, cybersecurity and web development tech to help keep driving SEIRIM's projects and abilities forward.

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