Mobile commerce campaigns offer
new brand-building opportunities
APAC Planning Director and China COO
Depending on which study you read, or which country you may be sitting in, digital media spend has now passed traditional spend, and the gap is expected to continue to widen. And China is ahead of this very sharp curve. Here in China, 95 percent of connected citizens—around 750 million people—access the internet via their mobile device.
And while the numbers are of course significant, we would argue that the importance of mobile being the primary driver of internet connectivity goes beyond advertising. Mobile should be viewed as the cornerstone of marketing activity. Mobile links marketing and sales activity. And the opportunity for using mobile to build consumer engagement and brand building, in proximity to retail, exists in China like nowhere else.
Mobile has been the No. 1 way people access the internet in China since 2012. And the mobile experience, in terms content and communications opportunities, has moved on exponentially since then, driven by smart phone adoption and improved servicing speeds. The big question from a marketing community perspective is, how well are we keeping up with the advances in mobile experience offered by the likes of Tencent’s WeChat and the Alibaba Group?
Three major drivers of mobile use in China are: video streaming, gaming, and social media. The need for entertainment during moments of downtime, such as the daily commute, motivates video streaming and gaming. A desire for personal connections and fear of missing out motivate social media activity. All three mobile uses have created paid media opportunities and produced the shift in investment from traditional to digital media. But a fourth mobile opportunity—mobile commerce—fully emerged in 2017, demonstrated by the 90 percent of consumers who transacted their 11/11 shopping festival purchases on mobile.
Utility drives engagement
To take advantage is this mobile commerce opportunity, look to some of its most successful practitioners. The ecosystems of WeChat and Alibaba have been strongly motivated by consumer utility rather than the desire to create platforms simply to attract “eyeballs” and generate media spending. Instead, consumer engagement, and with it mass adoption, was driven by usefulness. And here is a big point of learning for brand marketers looking to engage China’s consumers—Being useful to a consumer offers a more memorable experience than simply showing a display ad. In fact, the concept of mobile advertising itself is perhaps outdated and too passive. It speaks to the re-use of old formats into a new medium.
How can our brands be more useful? In order to bring creative innovation in line with the habits of China’s mobile-centric consumers, we must challenge ourselves to go beyond the typical view of demographics and target profile. It is vital to develop a deeper understanding of consumer behavior and the life moments where our brands can be most useful. This can be about utility or entertainment, but first and foremost we should acknowledge the context of the consumer and be of service to his/her needs. With the mobile device playing such an integral role in the lives of China’s consumers the role of creativity is not to seek attention, it is to fit into the requirements being displayed and offer solutions accordingly.
We read recently about the study Unilever and Nestlé conducted in the UK looking at the impact of digital media on in-store purchases. For every £1 spent, the advertisers received £1.94 in sales. Interestingly, there was also a brand lift in awareness and being viewed favorably. It would be interesting to reflect on this data from a China market perspective. The assumption we would make is that with mobile transactions being a prime driver of sales in China (both online and offline) we would recommend building increasingly purchase-motivated mobile campaigns in the future.
As with any market, winning within China’s quickly changing media landscape means being consumer-centric. Yet perhaps more than in any other global economy, it is vital in China that mobile solutions and creativity are the core drivers of marketing strategy. The great news is that much of the required infrastructure brands need to develop winning strategies is already available today and mobile is the accelerant they are looking for to ignite growth.
Innovative mobile engages consumers
1. New Retail is one of the most talked-about consumer engagement developments. The term, introduced by Alibaba CEO Jack Ma, describes the next step after O2O, the integration of online and offline shopping. In New Retail, old definitions and borders give way to a seamless system that coordinates e-commerce, physical retail, logistics, and data. For example, Starbucks launched its new Starbucks Reserve Roastery store in Shanghai with an augmented reality app created in collaboration with Alibaba. When shoppers aim their mobile device in the store they receive related information to enhance their in-store experience. An Alibaba app enables shoppers in Hema grocery stores to look up prices and information, place orders for home delivery, and order food from the in-store eateries.
2. Livestreaming has become a core component of the e-commerce selling arsenal. And the role of key opinion leaders (KOLs) in this phenomenon has been key. The link of entertainment to sales is not a new global approach, yet the adoption in China is widespread across many categories, from face cream to cars. In just one month during the summer of 2017, 35 million people watched live streaming on e-commerce platform Taobao.
3. Location Based Services (LBS) also have been key to engaging consumers. Consumers are already using such services to support their place-based needs, such as searching for restaurant deals nearby. But marketers can also leverage the services to promote products or retail locations with timely offers or product release information. Estée Lauder ran a campaign targeting Chinese outbound travelers for DFS, the airport retail chain. Leveraging shopper online behavior (travel bookings, search history, make-up preferences), Estée Lauder then utilized LBS to target travelers at their destination with a coupon for giveaway redemption with cosmetics purchases.
4. Cashless payment is already at critical mass. Consumers comfort level with going cashless is clear in China, with mobile payments 50 times greater than in the US. The scale of retailer adoption and government support is unparalleled, demonstrated by the speed of retail technology adoption and the emergence of “cashless cities” across China. The mobile experience loop is now complete and China is the world leader.