China 2016: THOUGHT LEADERSHIP |MANAGING CHANGE AND COMPLEXITY
SUCCESSFUL BRANDS EMBRACE THE POWER OF THE PLATFORM
IF A BRAND’S NOT MOBILE, IT’S GOING NOWHERE
Chief Digital Officer
When Alibaba’s Singles’ Day sales hit 91.2 billion yuan this year it set a new record – not least because over 68 percent of transactions were made on wireless devices such as smartphones and tablets. More proof (were it needed) of how fast consumers’ purchasing behavior is shifting from o ine to online and mobile. Smartphone penetration in China is around 70 percent, accounting for close to 700 million devices. In July 2015, m-commerce revenues bypassed web-based e-commerce revenues for the first time – and it’s unlikely m-commerce will ever fall behind.
Two factors are driving the fast growing e- and m-commerce arenas. Firstly, the younger generation’s lifestyle in China is more digital and mobile than anywhere else in the world, even more so than in the US. Due to comparably weak Internet connection in non-Tier 1 and 2 cities, mobile usage is heavy – the mobile device is the gateway to the digital media world. Secondly, low retail penetration in Tier 2-4 cities has prompted increased demand for e- and m-commerce. It’s the main reason for the incredible success and scale of Chinese’s e-commerce platforms – both of which are supported by the Chinese government. The Internet+ program embeds o ine services into online Apps like WeChat and e-commerce platforms are the perfect infrastructure to give a broader population the perception that they too are part of the growing wealth of the nation.
BRANDS ARE GETTING ON BOARD
For brands, e- and m-commerce platforms with inherent performance marketing capabilities are mandatory. Almost all platforms have a related data-driven o ering within their ecosystem. The still growing online purchasing trends, real-time and data driven capabilities, and dynamic optimization possibilities make these platforms crucial to a brand’s communication plan.
Currently for performance driven clients, SEM and SEO are the most common media type (as elsewhere) but we are also seeing the emergence of programmatic buy display ads. Alibaba goes even further, enabling video pre-roll buying across its strategic video site partners.
HOW CAN BRANDS DO MORE TO AMPLIFY THEIR INFLUENCE ON THESE PLATFORMS?
01 MARKET BASKET ANALYSIS
It’s not a new concept, but it works online as well as well as it does o ine. The data is there, but the key is to manage these assets. As the oil of the new age, data can tell you more about your consumers. We can identify the closely related products that consumers purchase together, then adjust our media strategy or promotion plan accordingly. For example, by continuous tracking and analysis, we discover that those who bought toothpaste in the past week have a higher chance of also buying towels. Thus, a toothpaste brand can present themselves on the page of towels, or package its products with towels for promotion.
02 E- AND M-COMMERCE ARE NOT SEPARATE
A holistic media planning and optimization approach is almost mandatory. Users are not only active on one e- or m-commerce platform, they are surfing the online world. Being able to identify a user across di erent screens and platforms will create a more accurate consumer portrait, helping you meet your target audience in the right channel using the right content at the right time, then leading them to your e- or m-commerce page. Although the biggest challenge lies in the isolated data among di erent platforms, we believe this will be resolved in the near future.
03 E- AND M-COMMERCE ARE NOT JUST ABOUT SALES EFFECTIVENESS
Driving sales is absolutely the key motivation for brands to get involved in e-commerce platforms, but generating brand buzz is another benefit that can be considered as PR value for brands. Your products’ search volume on e- and m-commerce platforms is also an indicator of your brand’s awareness level. A lot of people browse these pages even if they do not actually buy anything, so make sure e- and m-commerce platforms count in your brand building communication plans.