If we still think that the digital marketing world is that of Instagram or Facebook, then we have our heads in a world before the pandemic and we are not ready for change.
What happened in China in digital marketing is changing the rules and dynamics of social networks and e-commerce, and even large Western companies are frantically chasing the Chinese model.
But let’s take a brief history of how the Chinese social e-commerce model was born.
We all know that COVID 19 has profoundly changed people’s daily lives by locking them at home for months without the possibility of having many contacts in real life. More and more interpersonal relationships are mediated by technology, while many working ones have become ‘smart working’, and therefore also mediated by technological interfaces (albeit often created specifically for business environments).
Today we know that the world will no longer be the same as it was before and we have become familiar with new digital intermediaries, from DAD-Remote Education to Zoom rooms, from Google Meet to Microsoft integrated systems ,for smart working companies, that are replacing CISCO.
Now let’s try to imagine that all this happened in China in 2003 with the SARS epidemic: 16 years before us, the Chinese experienced segregation, fear and the need to find a new way of life to manage everyday life.
And in these 16 years, familiarity with digital has led them to develop systems that here in the West we are just beginning to glimpse.
The value of online sales in China in 2020 was a trillion dollars with a 100% increase compared to 2019 (which had already registered an 80% increase over the previous year). The total value is much greater than that of the United States and places Chinese e-commerce as the place to be for any company that wants to sell in the immense Chinese market.
The equivalent of Chinese Black Friday is Single’s Day, 11 11 (November 11), and in 2020 online sales reached a record level of 38.4 billion dollars.
But e-commerce is not what we think of when we go to our online sales sites. The Chinese model is a system in which marketing-ecommerce-social-fintech are all integrated with each other.
The Chinese social e-commerce model
If we want to try to imagine what Chinese e-commerce is, let’s try to imagine a place where Facebook, Instagram, PostePay, WhatsApp, Twitch, Amazon and Youtube are all together in a single digital universe.
Buying online is a true digital experience for the consumer and all large companies have studied systems that integrate real and digital experiences (from online to offline and vice versa).
The penetration of digital and familiarity with the mobile phone have led to redesigning even physical retail, in a process in which service innovation, marketing and product innovation follow one another continuously.
The ability to manage incredible amounts of data has led China to become a leader in a sector that seemed to be the absolute dominion of Silicon Valley in California. And it is no coincidence that new social networks such as Tik Tok, the most downloaded App of 2020, were born in China.
Let’s try to get into the Chinese sales and marketing system better and take the case of one of the major e-commerce sites: Taobao, which we know as Alibaba.
Taobao is not just a sales site, it is a promotion and marketing site. Each store has its own promotion channel which in addition to the tools we know (promotion, discounts, coupons, affiliations, etc.) has a section where it broadcasts live entertaining the public with methods that we can define as infotainment.
We could almost define it as an immense television platform of self-managed tele-promotions, but it would still be an understatement.
These broadcasts are managed by the protagonists of the company (as if Giovanni Rana talked about tortellini for hours every day) or partly entrusted to live-streamers, which in China are called KOL – Key Opinion Leaders.
The role of the KOL has become so important that the most famous have opened their own channel and promote various products. The most important have become millionaires and can sell anything: the example of Huang Wei, known as Weiya, who in April 2020 sold a rocket for about 6 million dollars is always mentioned.
The public interacts live with the live-streamers and communication is always multidirectional, so you enter e-commerce not only to buy something but to socialize, learn to cook or put on make-up and communicate.
A company that wants to start selling in e-commerce in China must therefore design a totally innovative marketing strategy compared to the one we are used to. It has to start with creating informative content, then communicative content and then make an online event strategy.
It may initially choose to penetrate by also using co-marketing operations with other brands that are similar or emotionally attractive to the target audience.
With this integration between social life and online shopping experiences, Alibaba has also acquired stakes in the Weibo social network, the second most widespread in China after WeChat and very similar to our Facebook.
Looking at this Chinese model, one can then understand the new strategy of the Amazon group which is actively supporting Twitch among its customers, its own social / television channel where some live-streamers constantly broadcast live.
Twitch is a platform originally created for games fans and in fact the first ‘stars’ were boys who told and played live. To grow it has favoured the passage of characters from YouTube and is now ready to support an eventual Amazon strategy that brings it closer to the Chinese model.
If we are to think about a post-COVID future, perhaps then we must increasingly look to the Chinese model because they started years earlier and now have an established system.
But let’s go back to e-commerce because Taobao is just one piece of the Alibaba ecosystem which includes many other aspects such as payment methods. The Chinese have been using payment systems linked to mobile phones for many years and the most popular are WeChat Pay and AlyPay, the first linked to the WeChat social network and the second to the Alibaba group.
WeChat is a mix of Facebook, WhatsApp and many other APPs that cover every daily need: from calling a taxi to paying anything to even giving alms. A system similar to the banking one that has brought about a revolution because many consumers use only these systems and abandon the banking traditions that are much slower in financial operations.
And it is no coincidence that many of these solutions come from the world of video games and the Tencent group (which owns WeChat) is also a leader in this sector.
We understand then why Facebook bought WhatsApp, which opened a new business section being tested in some countries, and announced the birth of its own crypto currency (even if the project was later suspended) and why Amazon bought Twitch.
At this point we have to talk about another interesting innovation in the marketing sector. Among the digital marketing services that Taobao offers to its business customers (those who sell the products), there is data analysis (Big Data) and a series of tips to improve the performance of your business according to the requests of consumers.
It can be said that the transition from listening to the customer to marketing and product and / or service innovation occurs in near real time. All operations that normally require months of analysis and fine-tuning have been reduced to a few weeks in China.
For large mega-factories, these steps have been automated and the Alibaba group has entered directly into organization of the production processes of the plants and the information that comes from the analysis of user behaviour in the network reprogram the production processes in real time.
What to learn from the Chinese model
Getting to know the Chinese model, which is rapidly expanding throughout Asia, is like taking a leap into the future and knowing what will happen in Europe as well.
Making a marketing programme for a company today means having to study an online / offline strategy at the same time, create informative content and infotainment content, contact KOL, organize online experiences but also experiences when you receive the package at home.
A world where digital, virtual and real experiences are designed for a post-COVID consumer immersed in technology.
And if we think that the Chinese model stops only at E-commerce and does not contaminate the world of Ho.re.ca. then we are still in another geological era. The new restaurants offer food and wine experiences but also immersive virtual experiences.
You know the art exhibitions where you enter environments that show paintings, music and other tactile experiences? Now try to imagine these experiences related to the world of catering and add virtual reality and augmented reality.
In Europe, one of the most expensive restaurants in the world, Subliminal in Ibiza, has already tried successfully before COVID.
And this shift is now being driven by the falling costs of technology and the fact that people want to start having positive and creative experiences.
Luxury is the trend and we wait for our operators to wake up and start thinking about new consumers and having fun designing positive experiences for their customers.