Excellence in Chinese Online Markets
China’s online audience: 5x the size of Russia
China’s colossal online market lies at the base of what amounts to a highly lucrative phenomenon.
China is now home to 731 million internet users – five times the size of Russia’s whole population4 – and 695 million smartphone users by the end of 2016.5
This huge user base fuelled red-hot demand for data during Chinese New Year, pushing data usage during the holiday period up to a whopping 259 million gigabytes6 – double the total consumed in 2016 – as Chinese increasingly chose to spend their Chinese New Year time online.
Even the usual generation gap caused by technology may soon not pose too big of a hindrance here in China – a recent survey revealed that 95.2% of Chinese respondents plan teach their parents to be more tech-savvy by showing them how to send a digital hongbao on smartphones.7
More importantly, aside from hongbao cash packets, rocketing online usage during Chinese New Year drove a business bonanza for online-focused companies as well, such as China UnionPay, the biggest payment processing company in China.
China UnionPay reported ¥462 billion in total online payments for 343 million transactions during the 2017 Chinese New Year holiday, a y-o-y growth of 48.1% and 11.7%, respectively, compared to the same period in 2016.8
- Fresh produce: Rather than elbowing their way through crowds in local markets, Chinese consumers have increasingly turned to online vendors to buy their fresh produce for holiday cooking. Total online sales of fresh goods saw a massive 400% increase, with imported goods seeing a 13-fold increase compared to Chinese New Year 2016.9
- Goods delivery: According to China’s Ministry for Postal Services, the tide of online orders saw China Post delivering 13.75 million deliveries between 20 January and 2 February 2017 alone.10
- Online cinema tickets: A record-breaking ¥3.38 billion cinema tickets were sold during the Chinese New Year holiday, up 3% y-o-y.11 While this was a boon for cinemas, it also generated ¥190 million in booking fees for online ticket vendors, such as Maoyan, WePiao, and Nuomi.12
The huge growth figures seen during the recent Chinese New Year prove, once again, that online channels are the most effective way of targeting Chinese consumers
If those Chinese New Year numbers still aren’t enough to convince you, these four brands expanding online in China are prime examples showing online expansion as the way forward to target Chinese buyers.
As one of the leading foreign high-end retailers in the China market, the global fashion house built its online presence on Alibaba’s Tmall portal13, and beefed up its presence on WeChat14 in time for Chinese New Year with themed promotions. Even amid a challenging environment for high-end retailers in China, Burberry has carved out a niche in the market, which now accounts for a quarter of its global sales15, with sales recently increasing around 2% y-o-y.16
#2 Four Seasons
The luxury hotel chain has built and active presence on Weibo and WeChat. During the recent Chinese New Year holiday, Four Seasons reached out to Chinese travellers with its own hongbao activity17, where users shake their phones to grab a hongbao, which would then offer them the chance to win a two-night stay at a Four Seasons hotel. It’s activities like this, and their prioritisation of online channels in China, that have garnered the Four Seasons hotel chain an award for best social media marketing channel.18
BMW has built a position in the top three automakers in China19, which is already the world’s largest car market. How did they achieve this? An active online strategy that includes a company website offering the opportunity to tailor make your car order20, TMall sales platforms for auto parts and extras21, plus a WeChat featuring event and new model information, plus the opportunity to sign up for a test drive22 – that’s how.
Starbucks has flourished in China, and is aiming to double its location to 5,000 stores in the coming five years. Having locked onto the fact that Chinese mobile payment has now become a necessary way of life in China, Starbucks quickly adapted and started accepting WeChat pay in December 2016. Most recently, Starbucks partnered with WeChat to announce a social gifting promotion as part of their Valentine’s Day campaign, and it appears that they are the first retail brand to leverage WeChat’s social gifting feature and create an online-to-offline social gifting platform in China.23, 24
The promotional campaign, called ‘Say it with Starbucks’ (用星说) – a wordplay on the Chinese phrase ‘Say it with Your Heart’ (用心说) – not only allows Chinese consumers to seamlessly send coffees or gift certificates to friends or loved ones via WeChat, but also enables Starbucks to tap into hundreds of millions WeChat’s users.23, 24