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China 2015: BRAND BUILDING BEST PRACTICES | Ecommerce

FIgo Yang
CEO
Polestar
yangfei@cpjidi.com
Allen Liu
COO
Polestar
lius@cpjidi.com 


But complex shopping system brings challenges 

More and more people are accessing the Internet with their smart phones and mobile devices. They have embraced mobile ecommerce faster than expected. O2O combines online and offline business opportunities and turns the Internet into the front desk of offline transactions. It is reshaping the industry that we know. The concept of Internet access anytime and anywhere via localized and mobile devices has provided new opportunities for marketing brands and a wider space for ecommerce development.

O2O is the core element of the evolving structure of social commerce. With the advance of mobile Internet, consumption is becoming more transparent. Recommendations, information sharing and social networks are making a deeper impact on purchasing decisions. Social media platforms like WeChat generate new forms of social commerce services, such as friend circle, mobile payment and mobile shop. The “fans economy” spurs consumers to engage with their favorite brands and determines the brands’ influence in the age of social commerce.

O2O is a multidimensional concept. On the one hand, it opens the door of augmented reality information for the brands, and helps physical stores transform into experience stores equipped with information terminals and display functions. On the other hand, it brings exhibition and interaction to the service repertoire of online retail stores and directs consumers into offline participation and experience. This means that all the places with access to information, online or offline, media or advertising, are able to draw attention and generate transaction. 

SELECT ONLINE PLATFORM PARTNERS THOUGHTFULLY

Whether to choose Taobao, Tmall or JD as the key development platform or to enter all these marketplaces is a difficult decision for brands to make, as it not only involves competition among platforms, but also brings the challenge of managing ecommerce in different modes. Therefore, in the course of developing an ecommerce strategy, it is important not only to choose the right platform, but also to consider O2O integration and find the best way to offer shopping information and interact with the consumers on social media platforms such as WeChat and Weibo.

The Alibaba IPO has sent out a clear message: ecommerce is becoming the leading force of commerce. However, behind this market boom, online retailers face serious challenges. Take Taobao as an example. Many consumer-to-consumer sellers have moved their shops to Tmall and transformed into business- to-business network retailers, yet this has resulted in serious supply surplus and homogenization.

The competition between Tmall and JD for valuable brands has also made it difficult to manage and control brand channels. Many medium- and small-size sellers have transferred to more covert and niche social media platforms. More importantly, as traditional consumer groups and online shopping groups increasingly overlap with each other, consumers’ perception and decision-making have both

changed. The failure to adapt to these changes has led to the fall of many retail brands and brand equity, and enabled new products to play catch-up in the market.

By developing models targeted at particular consumer groups, these newcomers have won the recognition of the market with more effective product designing, manufacturing and marketing, as well as a more pleasant and valuable shopping experience.

COMPLEXITY BRINGS OPPORTUNITIES AND CHALLENGES

A complex online shopping ecosystem brings both opportunities and challenges for brands. No brand can build up a huge ecommerce team to conduct the unfamiliar business of online marketing on its own. Brands need to do what they do best: create the distinctive products, services and customer experiences that inspire consumer engagement and  word-of-mouth communication. Successful brands develop or retain the supporting logistical and supply chain expertise necessary for delivering the brand promise.

This marriage of the brand and its support structure are especially important in ecommerce. The rapid development of ecommerce in China has prepared the

ground for a third-party-based service industry, from logistics, warehousing, marketing and sales to content, software, data and design. These services enable brands to cut costs and compete effectively. Building and sustaining a brand in an O2O world is not easy, but the sidebar to this story contains four directives. 

Four directives for building brands in an O2O world


1. EMBRACE CHANGE 

There are still plenty of opportunities for online retail despite the intensity of competition. One possibility is to focus the desires of smaller groups and identify niche segments.

2. ENHANCE CUSTOMER EXPERIENCE

Brands should cultivate their brand vision, present the unique selling points of their products and services and create the ultimate user experience throughout the shopping process, in order to exceeded the expectation of consumers, develop products that stimulate public interest and word- of-mouth communication, integrate social communication and shopping, and make consumers truly fall in love with the brands. 

3. COLLABORATE

Build an open marketing structure, introduce new channels for brand operation, make full use of socialized and specialized third-party service provider resources, and adopt flexible means of cooperation on different ecommerce platforms, in order to reduce operating costs and boost the efficiency of supply chain response. 

4. UNDERSTAND CHANGING CONSUMER NEEDS

New demands generate new concepts. With the analysis of data, it is much easier for ecommerce to gain insight into consumers and serve their needs while building a brand. 

Polestar is a third-party service provider offering ecommerce data and strategies, operation and marketing, O2O service, warehousing and logistics solutions.

www.cpjidi.com