This Beast called China — Part I
I read and heard this too many times. People call China ‘A Different Beast’.
Recently I did a research project for a trend forecasting company on Chinese online consumer marketplaces, consumer lifestyles and online behaviours. As a starter, here are some crazy numbers to look at:
- There are at least 1,373,000,000 people living in China in 2017 (Four times the population in the US 🍔🍔🍔🍔)
- At least 819,000,000 people live in urban areas in China in 2016 (100,000,000 + the entire population of Europe 🍷)
- At least 780,000,000 people use WeChat in China in 2016 (Two times the population of the US 🍔🍔)
- At least 535,500,000 people bought something on mobile in 2016 (Nine times the population of the UK 💂🏻💂🏻💂🏻💂🏻💂🏻💂🏻💂🏻💂🏻💂🏻)
- At least 350,000,000 people used Tmall to shop in 2016 (Population of the US and Canada combined 🍔🍁)
- At least 153,000,000 people used JD.com to shop in 2016 (More than two times the population of the UK 💂🏻💂🏻)
What’s going on in China?
Every brand in the world wants to crack this giant beast called China. But why? And how? How much do you know about China, the market, the diversity, the lifestyles, the behaviours, the motivations? To begin with, let’s take a look at the overall online consumer (C2C, B2C, B2B2C) marketplace landscape in China:
Another way to look at these online consumer marketplaces is how selective they are. Typically the more open and less selective the marketplace is, the broader the product selection. Niche marketplaces usually have stricter curation and control over what products and brands merchants can sell on their platforms.
Like all things in life, you can’t have everything and everyone. You can’t win all. Tmall — China’s (aka the world’s) largest B2C marketplace, suffers credibility issues and brand withdrawals because many merchants sell counterfeit goods on the platform. Coach has recently decided to shut down its Tmall store completely and focus just on its online store and WeChat shop. Nonetheless Tmall’s niche is it is The Everything Store, you can buy absolutely everything there.
The good thing is: Brands can focus on a few things, and do it really well. Let’s take a look at how two modern online brands in China position themselves and found their niche.
One of the fastest growing marketplaces in China is called XiaoHongShu 小红书, with 20,000,000 (near the entire population of Australia 🐨) registered users in 2016. It runs a social commerce business model, designed as a mobile first platform that acts like Pinterest and Instagram, but optimised for user generated content and e-commerce. User’s posts are tagged with product names and brand names. Clicking on them leads you a brief introduction about the brand, followed by #hashtags, boards and user posts about them. Completely addictive for more mature online consumers in China who do tons of social research online before making a purchase.
One brand called WangYiYanXuan 网易严选 is a great example of a modern Chinese online brand that focuses greatly on brand storytelling. It works directly with suppliers of Muji, Tumi, Coach, and designs minimal, affordable and high quality homeware and clothing. As a ‘small’ player in China, it has 50,000,000 (twice the entire population of Australia 🐨🐨) registered users on the site.
What are the lifestyle behaviours and priorities of mass market consumers in China?
(To be continued)
Remarks
Thanks to a bunch of good old Chinese friends who I met at design school, from my previous job, during my trips in Shanghai, Beijing, Shenzhen, who now work in some of the most successful Chinese online marketplaces and modern Chinese brands. You guys are better than Baidu and Google 💕👲
Research Sources
- Brandz Top 100 Most Valuable Chinese Brands 2016
http://www.millwardbrown.com/BrandZ/2016/China/2016_China_Top100_EN.pdf - Mickinsey’s 2016 China Consumer Report — The Modernization of the Chinese Consumer
http://www.linkshop.com.cn/upload/article/2016/20160523090452_3125.pdf - pwc’s The Disruptive Face of the Retail and Consumer Products Sector in China and Hong Kong (June 2016)
https://www.pwc.com.au/asia-practice/publications/rc_disruptive_face_jun2016.pdf - Boston Consulting Group’s The New China Playbook (Dec 2015)
http://www.bcg.com.cn/en/files/publications/reports_pdf/BCG-The-New-China-Playbook-Dec-2015.pdf - KPMG’s China’s Connected Consumers 2016
https://assets.kpmg.com/content/dam/kpmg/cn/pdf/en/2016/11/china-s-connected-consumer-2016.pdf - Exane BNP Paribas’ The Shopping Guide: Bloggers in China
http://www.exane.com/Link!docExternal.action?cmd=69723331263d6c3d646135396c316f356f3d333067266734 - Oliver Wyman’s Shopping Without Boundaries (Aug 2016)
http://www.oliverwyman.com/content/dam/oliver-wyman/global/en/2016/aug/Shopping-Without-Boundaries.pdf - Exane BNP Paribas’ The Online Purchase Experience in China: Local Champions Dominate
http://contactlab.com/wp-content/uploads/2017/01/The-Online-Purchase-Experience-in-China-Local-Champions-Dominate.pdf - pwc’s Total Retail 2016
http://www.pwc.com/gx/en/industries/retail-consumer/global-total-retail.html - Articles on Jing Daily, WGSN, Tech in Asia
- Website and reports of Alibaba, Tmall, Tmall Global, Tencent, JD, JD Worldwide, WeChat, WangYiYanXuan, XiaoHongShu, among others
- Internal documents from Chinese online marketplace brands
