9 Trends to Look Out For In China During 2014
In Chinese mythology 12 animals make up the zodiac. So the story goes the Jade Emperor summoned the animals of the universe to a race and the first 12 to cross the river would be immortalised in the zodiac depending on when they finished.
This cute but rather trite story is now used as a marketing tool in China. 2014 is the year of the horse and the marketing this year used the play on words around a common Chinese saying 马上 (ma shang) meaning literally on the horse, but in standard parlance meaning immediately or right away.
In this blog I’ll look at some of the predicted trends in Chinese e-commerce during the Year of the Horse. Lets get going right away!
1. Mobile e-commerce
2014 will be the year that mobile e-commerce, or m-commerce, really takes off in China. It’s predicted that this will be the biggest trend in e-commerce during the year.
2013 saw this area of the e-commerce sector start to explode. I wrote a blog about the massive changes in how Chinese consumers use their smartphones and how mobile Internet is developing in China. Expect to see a big push in m-commerce during 2014 with all the biggest e-commerce companies delving into this area.
Also expect to see a big drive in mobile marketing and indeed a drive towards making it easier for consumers to use their mobile devices to connect with brands and brands to interact with their customer base in real time.
2. Financial e-commerce
2013 was year zero for financial e-commerce in China with the launch in June of Alibaba’s popular investment service, Yu’e Bao. In the space of eight months the fund attracted over USD300 million.
Because of Yu’e Bao’s success other fund management firms have wanted to get in on the act thus fuelling the success of these investment vehicles and the financial e-commerce sector in general.
The predictors suggest that this trend will continue during 2014 with more companies competing with Alibaba in the financial industry, more opportunities available for people to invest and more methods available for businessmen to invest in these financial e-commerce funds.
3. Mobile payments
Paying with your mobile phone is linked with the m-commerce trend predicted for 2014. Analysts in China are seeing a lot of innovation in how your smartphone can be used to help pay for things.
Mobile payments have been in the pipeline for the last couple of years in China, but it looks like 2014 could be the year that cashless payments start to become a trend amongst the everyday consumer.
The stumbling block in the last couple of years has been which technology to use with NFC being the technology of choice but disagreements over exactly which frequency to use.
Predictors suggest that no matter if it’s a small national store or a huge multinational brand that all businesses are moving towards being able to use some form of mobile payment.
Expect to see many more people using their phone at POS or at least using a mobile wallet of some form to pay for products and services rendered. I wrote about mobile wallets in China at the start of this year and it seems that it is a trend that is set to continue.
4. Online 2 Offline (O2O)
The idea behind O2O is to find consumers online and bring them into bricks and mortar stores. This sector is just a natural consequence of the growth of mobile e-commerce in China.
Whereas previously most people were using a desktop PC to go online now they are using mobile apps such as WeChat much more regularly making it easier to target customers with e-coupons, e-vouchers and e-tickets.
And with payment methods such as mobile wallets available it is now much more convenient to pay via a mobile phone. All this combined suggests that O2O will be a big trend in e-commerce in China during 2014.
5. Big Data
Big Data is the use of digital information collected from various sources such as online applications, social media and POS and used to help a company with its marketing initiatives.
In China it’s predicted that using Big Data will become much more important for companies. The issues will surround the safe collection of sensitive data and how e-commerce companies will analyse this data.
However, the primary issue during 2014 will focus on how Big Data can be used to make money on certain mobile platforms such as WeChat and Baidu. Big brands will have to learn to analyse the data they collect from various sources and how they can use it for marketing.
6. Different platforms
Taobao and Tmall are the main platforms that consumers use to shop online in China. Sina Weibo and Qzone were the preferred way netizens would communicate with each other. But over the past year other platforms have been developed to allow netizens and consumers to interact online.
New platforms such as Jingdong and WeChat have created more competition and have given consumers more choice of where to shop and how to communicate. The feeling is that this trend towards new and different platforms will make the Chinese e-commerce landscape healthier.
7. Social media
E-commerce companies in China are starting to understand the importance of how to use social media for marketing their products and services. In the past a company would use social media channels to make announcements about their products. This way of thinking will change in 2014.
If a company is going to use social media successfully they must focus on their products or services. This means interacting with potential customers – gone are the days of simply having a passive relationship with people who might use your products.
The trend in China is towards using social media as a bridge between consumer and company. M-commerce will be important as more people move to using smartphones and building a relationship with customers will be the key aim of using social media successfully.
8. A boom in e-commerce providers
There was a boom in e-commerce in China during 2013. It’s predicted that B2C sales online will increase by over 60 per cent between 2014 and 2016. This has lead to a proliferation of e-commerce providers.
The e-commerce sector is becoming more professional as customers become more demanding. It is believed that if e-commerce providers provide a better service then the whole industry will benefit.
The trend in China is seeing services in areas such as payments, social media and translation services becoming more professionalised and this is set to continue during 2014.
9. Competition for Alibaba
Alibaba is the undisputed king of e-commerce in China with an “e-commerce empire” that spans B2C, B2B and C2C web portals, online payment services, cloud computing services and financial investment vehicles.
The company has:
- 50 per cent B2C market share
- 50 per cent B2B market share
- 50 per cent third-party payment market share
- 95 per cent C2C market share
But 2013 saw a boom in e-commerce providers meaning that Alibaba may be the biggest e-commerce company in China but they are not the only one anymore.
Analysts in China see a continuing trend in competition for Alibaba to deal with this year. And they are happy with this trend. The essence of a market economy is competition and is indeed the spirit of the Internet in general.
What do you think of these trends for 2014? Are there any others that should be added to this list? Leave a comment and let me know what you think.