Why we’re all following China’s lead
The idea of China taking the lead in the digital economy is one that the West is swiftly coming to terms with. From online marketing and e-commerce to integrating social media with shopping, they are streets ahead.
A few short years ago, Western firms were developing consumer electronics products with the growing Chinese market at the forefront of their thoughts. Tech was built for them, then adapted for everywhere else.
Now, China is showing the rest of the world the shape of things to come. As an integrated communications agency, we’re always looking for inspiration. Quite often, we find ourselves looking east to see how a commercial market that simply didn’t exist 30 years ago is rapidly inventing itself for the digital age.
What we are seeing is that ordinary people there are just as switched on about the future as mega-corporations such as the country’s internet behemoth Alibaba are.
Prophet China’s Brand Relevance Index showed that the top 10 this month was entirely populated by e-commerce, tech and payment firms.
1 Alipay – Alibaba’s cashless payments brand
3 WeChat – China’s WhatsApp, with mobile payments
4 Huawei – tech brand, quickly becoming a rival to Samsung and Apple for mobile.
6 Taobao – online shopping
8 Meituan – like JustEat
9 QQ – instant messaging
10 Tmall – online shopping
Apple made it to No.11 on the list.
It’s no surprise that on online marketing companies have such relevance in China, where smartphone ownership is outperforming the UK. According to Pew Research Centre, 68 per cent of Chinese adults had a smartphone by 2016. In the UK, that figure hit 66 per cent last year, according to Statista.
By comparison, Prophet’s UK Brand Relevance Index was much more diverse:
To put it simply, the Chinese list is much more commercially dominated – filled with services that link the makers of goods with consumers. It’s more concentrated and less frivolous.
A worldwide mega-brand
Marketing experts such as Gordon Young, editor-in-chief at The Drum, reckon Alibaba is set to become a worldwide mega-brand.
Due to the nature of China’s economic model, low production costs and huge population, the country’s mega-corporations are building up vast banks of data which they can use to model demand, supply and expansion. They can trial new concepts at a small scale in their homeland that would count as a full rollout elsewhere, adapt, then move on.
Some of what comes next was discussed in Gordon Young’s impressive recent video summary of Alibaba’s Cloud Computing Conference in Hangzhou.
He picked out his five favourite things from the expo, from autonomous vans and a “city brain” that pulled together data from the Internet of Things to provide a real-time management model for a city, through voice-activated robots designed to work in hotels and hospitals, to an unstaffed convenience store of the future and smart logistics.
Those last two in particular stood out for me because they are so easily adaptable to life here.
Smart logistics fits in beautifully with consumers’ demand for products they ordered online to arrive next day. A lot of the “picking” in UK warehouses is performed by humans, and that will change. Robots will do that task more quickly, transforming logistics in the same way automation transformed manufacturing.
Gordon Young also showcased Alibaba’s store of the future. It has no staff – you simply walk in, take a photo of the QR code on the wall with your phone and select your items from the shelf. A display on the shelf lets you know about linked special offers and you walk out with your purchases, a scanner at the door charging each item to your mobile account.
While QR codes have never quite had the uptake that was expected, the use of NFC “contactless” technology continues to spread and would be a viable alternative.
Can’t find something? A tablet stand at the centre of the store lets you search for an item, then lights up a path on the floor to take you to the correct shelf.
This kind of frictionless shopping fits in well with our time-poor society’s need to get what we want now, with minimal interference. The Co-op has been running trials of a similar scheme in England, but the results on that one aren’t yet in. But this is a change that is coming.
In the end, each of services making waves in China is about making life easier for consumers. The fewer obstacles between the buyer and their goods, the better.
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