Decade of mobile online shopping leaves marketers with new challenges
Advertising can maximize efficiency, effectiveness, and relevance
by Patrick Xu
WPP China and GroupM China
The last ten years undoubtedly have been the Decade of Mobile and the Decade of Online Shopping, especially in China. For marketers, these developments made the last 10 years a Decade of Change that created new marketing challenges going forward.
Today, people in China’s major cities conduct most of their regular activities on their mobile phones, moving seamlessly among websites and apps, and typically paying for purchases with a personal QR code. Cashless mobile payment enables content sites to link directly to commerce sites, such as Tmall or JD.com, or to a WeChat Mini Program.
Advertisers wanting to reach consumers now presume that most of their messages will reach consumers’ mobile devices. Recognizing the ubiquity of mobile, marketers expect that functions ranging from customer service to sales and ongoing interactions will occur digitally.
At the same time, Chinese consumers have changed. Consumers in upper tier cities have developed more sophisticated tastes, while those in rural China have become more particular about what they purchase, in order to obtain the best value.
These disruptions caused the Chinese market to evolve in several specific ways that are relevant and challenging for continued marketing success:
Content Commerce Established e-commerce platforms like JD.com and Taobao are facing increasing competition from new players such as Douyin (TikTok) and Xiaohongshu (Little Red Book). The pervasive influence of word of mouth (WOM) and instant gratification has led to a rise in content commerce.
Experience The digital developments of the past 10 years, the penetration of smart devices, and a well-built 4G infrastructure, are driving marketers in China to a new frontier: The Era of Experience. Because mobile technology and data make it possible to reach individuals anywhere and anytime, the brand experience at each of those connections is critical.
Direct-to-Consumer Artificial intelligence and machine learning curation, as well as influencer recommendations, are forcing China’s largest e-commerce platforms to find new ways to support brands’ Direct to Consumer (DTC) e-commerce presence.
Chinese shopping habits differ from the rest of the world, because of the tremendous reach of mobile e-commerce and high penetration rates of social media. Social commerce, which is the buying and selling of goods on social media apps, is emerging as the most disruptive trend in years.
With unique functions such as Key Opinion Leader (KOL) live streaming, social activations, content sharing and referral selling, social commerce is challenging the status quo of traditional commerce. It has forced multinational companies to adapt, while giving domestic brands a level competitive playing field.
Brands that continue to depend purely on classic commerce, with a focus on last-mile conversion through paid advertising, may unintentionally cannibalize long-term brand equity in exchange for short-term gains. Rather than improvise, brands need to take a methodical approach using data and technology to find more efficient ways to connect with consumers and reap the full benefits of social commerce.
WPP offers end-to-end service solutions that help brands plan, set up, operate, and optimize their ecommerce programs. It’s backed by over 500 e-commerce and social media experts to ensure the success of program delivery.
Looking ahead, more change
As the saying goes, the only thing constant in this world is change. This is also very true in technology-related development. The next decade will be highlighted with AI evolution and the next wave of commercial and social disruption. These will be characterized by accelerating innovation. For the media industry, the following trends will progress rapidly:
- Brand safety still has room for improvements across the industry to enhance consumer experience and protection.
- With improved bandwidth and lower prices, over-the-top delivery and consumption of video will increase.
- New platforms will increasingly seek hybrid monetization models, ranging from advertising to service and business diversification. Quality content producers and influencers will become increasingly important.
Furthermore, the value of data will continue to increase. First-party advertisers will deem data as the greatest tool to understand the requirements of clients. Advertisers will optimize the value of data to reach their target audience within the constraints of various platforms. Achieving best results and respecting privacy boundaries will be top priorities at all times.
The “interruptive” model will continue to exist in the advertising industry. However, the delivery will persistently be programmatic and addressable. Decision-making will be automated and at the same time, autonomous. Over time, the pursuit of mass communication through broadcast will give way to the goal of assembling one person, one home, or one device at a time.
With sufficient creativity, combined with a variety of messaging methods to meet the diverse needs of all consumer groups for each brand, advertising will have the opportunity to maximize efficiency, effectiveness, and relevance. Simply put, the value of advertising will upsurge.
Rather than improvise, brands need to take a methodical approach using data and technology to find more efficient ways to connect with consumers and reap the full benefits of social commerce.