China has recently surpassed the US to become the world's largest eCommerce market and will maintain this leadership position for the next while. According to KPMG's China 360 January 2014 issue, the Chinese eCommerce industry is forecasted to reach $540 billion USD by 2015, overtaking a predicted $278.9 billion USD American e-tail market. By 2020, China's eCommerce market is expected to be bigger than US, Britain, Japan, Germany, and France's combined.
For companies who want to penetrate the Chinese online retail market, in addition to developing a strategy to understand how Chinese consumers behave and purchase online, you must familiarize yourself with Chinese digital platforms, particularly social networks. Here's why:
- Popular social networks such as Facebook and Twitter that are used in North America to engage with customers are banned in China. As a result, you must use Chinese social channels to interact with Chinese shoppers.
- Chinese consumers use Chinese social platforms to seek product advice from opinion leaders or friends and to post product reviews. 40% of Chinese online shoppers read and post reviews about products - more than twice the number in the US.
Two major social media platforms you must utilize to connect with Chinese consumers are WeChat and Weibo:
- WeChat is a mobile messaging application which not only lets you send private messages to your connections, but also set up an official account within the app to engage with consumers. An official account is a feature similar to a Facebook page, where you can display textual and visual content and your fans can 'like' or comment on them.
Global brands such as Burberry and PepsiCo have begun leveraging this feature to interact with their customers. Burberry, for instance, published a short behind-the-scenes video of their London runway show in their official account. When their fans sent texts to them about the video, Burberry would reply with a virtual plaque engraved with their name.
By using creative approaches the way Burberry has, you can deepen connections with fans and increase brand loyalty.
- Weibo is a micro-blog similar to Twitter which lets you display textual content, images, and videos. You can use this platform to engage with Weibo's 360 million Chinese language users worldwide and strengthen your brand's emotional appeal by publishing rich visuals. For example, if you export food products to China, post an image of diners laughing with friends while eating your products to associate your brand with friends, fun and an enjoyable time.
These social media channels are also effective for companies who do not have an eCommerce strategy for China but want to reach out to Chinese consumers. Local establishments such as Empire State Building and businesses such as Holt Renfrew are already using these social channels to attract Chinese tourists and shoppers to American destinations.
It can be challenging to directly penetrate China's online space, but American businesses have an edge: their large Chinese-American population. Try leveraging the local Chinese-American market to enter the Chinese market. Since many Chinese-Americans have family members and peers their list of social contacts, use WeChat or Weibo to run social media contests or other promotions that encourage Chinese-Americans to share content with their families and friends in China. This kind of social engagement will help you create more brand awareness in the Chinese market and spark Chinese consumers' interests in shopping at your eCommerce website!