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5 Tips to grow your brand online in China

November 24, 2021May 22, 2018 by Jacco

China can be a complicated market for foreign brands to do business. From hosting a website to running a social media campaign, the digital norms in China deviate from those in the West and localizing is paramount to success.

The two most obvious “first steps” are registering a verified WeChat and Weibo account, which are the respective “WhatsApp” and “Twitter” of China.

So that is WeChat & Weibo, but what’s next?

You’ve successfully set up a verified WeChat and Weibo account and you’re ready to grow your brand’s user base. The key now is preparing what content you want to push through these two platforms and setting up other complimentary niche digital marketing channels.

In this post, we look at five ways to grow your brand online in China.

Identify and reach out to key opinion leaders

Using your new social media accounts or going through an agency/KOL broker, now’s the time to reach out to key opinion leaders (KOLs) and potential celebrity endorsements. The aim is to generate buzz on existing WeChat and Weibo accounts from more established (and probably well-known) users to drive traffic to your own social media accounts, website, or ecommerce listing on say Tmall or JD.COM. Celebrity endorsements and product placements are other more expensive brand marketing options. The Chinese tennis superstar, Li Na, for example, is a Global Health Ambassador for the Australian vitamins company Blackmores.

Source: Australian vitamins selling out in China, as ‘clean and green’ demand soars | afr.com

Live-streaming

Live-streaming platforms such as YY, Yingke & Huajiao offer an accessible starting point to build a brand following in China. And if you have a bigger budget it is a great way to tap into an existing online audience through cooperation with prominent online celebrities. Live-streamed content, such as brand demonstrations, can be edited and uploaded to Chinese video sharing sites later, such as Youku and then promoted through your WeChat and Weibo accounts.

L’Oréal’s streamed cosmetic demonstration on Meipai. Source: meipai.com

Pick the right niche platforms

Beyond the general appeal of Weibo and especially WeChat in China, there is a massive variety of other social platforms to build an audience and promote your brand. The live-streaming market, for one, is still fragmented and choosing the right platform is critical. Meipai, for example, is a premier choice for beauty and fashion, whereas Inke promotes themselves as the platform for super stars. Although at the same time attracting family-friendly content and social awareness campaigns (e.g. to avoid the extreme pollution in 2016, teachers live-streamed classes in Beijing so students could stay indoors). Besides live-streaming niche platforms there are also smaller social and ecommerce platforms that have flourished around specific industries. For example, Meiya which is purely focused on cosmetics & make-up tips for woman. Or the ecommerce platform called Little Red Book, which focuses purely on cross border ecommerce. Consumer reviews are key on this social commerce platform and KOLs turn their reviews into selling points for brand products. All these social, ecommerce or even hybrid niche platforms usually have between 100 and 200 million registered users and over 50 million MAUs (Monthly Active Users).

Launch a China-facing brand website

Building a China-facing website will help to drive sales, capture leads, and demonstrate the credibility of your brand in China. One of the priorities for your website should be to host inside Mainland China or as close as possible, with Hong Kong a suitable second option. You can also add links to your Weibo, WeChat and other social media accounts on your website as visitors may wish to cross-reference your brand’s other online assets and follow you on their preferred platform.

Search engine visibility

Search engines are a key channel to reach China’s 772 million online users and to attract traffic to your website. Best practices in search engine optimization generally follow the basic standards in the West. However, there are a number of exceptions. First, search engines in China favor websites hosted in Mainland China and that have registered for an ICP (Internet Content Provider) license. Also, unlike their Western counterparts, Chinese search engines do not have the same sophisticated technology to detect and index mobile design. That being the case, site owners need to upload two separate sitemaps to the respect search engine in order to be properly indexed: one sitemap for mobile and one sitemap for PC.

Of course, these 5 tips are just the tip of the iceberg when it comes to the possibilities in Chinese Digital Marketing. But they should give you a pretty understanding of how diverse the choices are for ways to grow a brand in this environment.

Not sure where to get started and need help picking the right channels for your brand? Don’t worry! AgencyChina is here to help you build a better digital marketing strategy to bridge the gap between the Western and Chinese side of your business.

Trust issues in China discussed with the experts

December 1, 2020May 11, 2018 by Jacco

On Wednesday, 09th May 2018, AgencyChina, as a digital marketing agency, had the pleasure of hosting a partner event to discuss about trust issues in China at Cotton’s in Shanghai.

AgencyChina aims to connect all partners across different sectors together in order to have a better understanding of each others products and services with the end goal of servicing all our client better. #partnership #transparency #cooperation

Everyone was divided into three groups to talk about trust issues in China from 3 different angles. Each group had very unique and interesting answers to their questions!

Q1：What is the origin of trust issues for Chinese consumers?

“Lack or consistency and lack of a good systems to guide trust. Especially now that the society is getting wealthier and having more spending power there is more to safeguard in terms of quality and standards.”

Q2: How has the trust of Chinese consumers developed over the years?

“It developed mostly based on technology. The first name coming to mind being Alibaba in terms of setting up the infrastructure to build trust. But it goes further than just online reviews and comments, it includes safe payments, insurance, and trust between consumers and merchants, both ways.”

Q3: How do brands tackle the issue of lack of trust from Chinese consumers?

“The basics are always crucial, having a local online presence, and being reachable for the customer, all facilitated by technology in a way. This all builds trust. But one example brought forward was probably the ultimate technical “holy grail”. A chicken producer who uses Block chain technology to track each chicken from birth, what it eats, where it grows up, and how and where it is ‘processed’ before being put on a shelf for a consumer to buy. Simply scan the QR code and know every single detail about your dinner. #ChickChain “

Livestreaming in China and How to Get in on the Action

November 24, 2021May 3, 2018 by Jacco

Powered by advanced cloud technology, smartphones and the optional accessory of an adjustable selfie-stick, livestreaming in China is taking content consumers by storm.

A Credit Suisse report, made available in September 2016, placed the personal livestreaming market in China to climb to 5 billion USD in value in 2017. Interestingly, this number is only $2 billion USD shy of matching the value of China’s film industry!

The fast adoption of livestreaming in China should come as no surprise given China’s appetite for online entertainment. China is a global leader in the consumption of video-on-demand (VOD) according to a recent Nielsen study. According to the report, “China is at the forefront of this digital trend, with more than 4 out of 5 respondents (84%) saying that they watch some type of VOD programming. This is far greater than the number of global respondents (65%), across 61 countries that said the same.”

Livestreaming is the fastest growing digital marketing channel in China. It grew initially as a form of online entertainment and a medium for individuals to share their personal lives – everything from singing, to eating, gaming and even sleeping. However, livestreaming is increasingly becoming a platform for education, business, communication and marketing. Streaming in China is also closely intertwined with e-commerce. Live hosts promote and demonstrate products in real-time to up to hundreds of thousands of users. This industry even got its own new name; Live Commerce.

But you don’t need to be an actor to put yourself in front of an audience to push products. Everyday people in China have turned themselves into online celebrities with next to no formal training. After building up their own organic following and a loyal audience, they are now receiving offers from small to large brands to promote products to their online following through affiliate marketing.

Taobao Livestreaming Platform

Alibaba’s Taobao Live, for example, provides a platform for Taobao merchants to engage popular livestreamers to promote products to their followers. Through online demonstration or direct sales pitches, users can follow notifications that appear on their screen and follow prompts to purchase. Integrating live-streaming into the e-commerce sales funnel has been found to accelerate lead generation, improve trust, and ultimately convert more sales. Taobao Live has a conversion rate on livestreamed content of up to 32 percent.

The cosmetics company Maybelline is one exponent of the hot livestream marketing that provides a key case study for foreign brands. In April 2016, Maybelline engaged the prominent Chinese celebrity Angelababy to air a live press conference for their new lipstick product line on a number of livestreaming platforms. The live press conference was supported by a HTML5 platform designed specially for the event as well as ad space on the home pages of major e-commerce platforms like Tmall. The HTML5 website consolidated streams of Angela Baby and 50 other online celebrities from different angles of the event. The streamed press conference went on to attract more than 5 million views on Tencent Live, 80,000 views on Meipai, and 150,000 views on Panda TV and earned the company 1.42 million RMB in direct revenue.

Streaming is also expanding into other industries, and breaking down geographical barriers. Real estate agents, for example, can connect buyers with potential homes vast distances away through streamed house tours of apartments as far as Melbourne and Vancouver. Even isolated farms in China’s Inner Mongolia and Xinjiang regions can now be reached through live-streaming on a number of app-based marketplaces to purchase livestock. Emubao is one of the numerous apps connecting users to livestock available for purchase on the app. App users can select their choice of farm, and watch live-streamed video content of sheep standing in a paddock before they make their purchase on Monday morning at market day.

Chinese consumers pay considerable attention to product safety, quality and authenticity, and livestreaming provides a reliable channel to validate products, real estate and even livestock. The ability for users to see what they want to buy with their own eyes in real-time is a powerful sales conversion tool.

With the high barriers of entry to establishing an on-the-ground presence in China, livestreaming platforms offer an affordable starting point to building a brand following in China or for tapping into existing online groups through cooperation with prominent online celebrities.

Did you get excited? Talk to us to find out more about how you can integrate livestreaming into your own brand development in China.

Have you heard about the latest new hype in China?

December 1, 2020April 24, 2018 by Jacco

It is another win for Tencent in the digital marketing battle for the attention of Chinese Netizens. A new WeChat Mini Program game which is taking China by storm. Like its popular predecessors Tiaoyitiao (jumping from box to box) it is a pretty simple yet addicting game. Little balls come falling down the screen in a direction of your choosing. The goal is to break down the shapes on the screen before they move to the top of the screen in between turns, a little like Tetris blocks hitting the top of your screen.

Immediately 2 questions come to mind:

1. Will they start putting advertisements in this game like they did with Tiaoyitiao?

Curious how they will fit it in the little elements but I’m sure it can be done.

2. How is this game spreading so quickly??

As far as we can tell it is not being promoted by means of any advertisement. And looking for it in WeChat search leads us to a copycat. (Yes, you read that correctly, this game has only been around for days and there is already a cheap knock-off!)

For now this new Mini Program seems to ride the high of Word-of-mouth in China. It is easy to forward the game to friends and share the fun.

(left the real game, right the copycat)

Our office is a sea of little white and yellow balls flying around on screens. I have also tried it and quite successfully I thought, 9^th place amongst my friends. But my victory was short lived. Only minutes later a colleague beat my score. Ah well.. back to work I guess.

Ins and outs of WeChat Moments Advertising

December 1, 2020April 13, 2018 by Jacco

What is WeChat Moments Advertising?

Advertising on WeChat Moments is a similar method as advertising on Facebook allowing brands to place ads on their news feed. It gives users the feeling that their “friends” send an advertisement on their WeChat moments, but with an additional “Sponsored” tag in the upper right corner.

WeChat Moments ads provides advertisers with high quality user data based on which marketers can define their target audience according to age, gender, location, industry etc.

Types of WeChat Moments ads

In order to target the right audience using the right method, understanding the types of WeChat Moments ads is a necessity. Up until of the end of 2017, WeChat Moments ads has launched different features such as normal image-text ads, video ads and cards ads to support activities including brand promotion, WeChat public account promotion, Apps promotion, WeChat card voucher promotion or localized promotion (LBS).

Now let’s look at the main types in more detail:

1. Normal image-text ads

It consists of 5 or 6 parts including brand logo and name, text (maximum 40 characters), images (up to 6 images), URL (supporting links to public accounts, APP downloads or H5 pages), and comments.

*location based services (LBS) ads also include store location info.

2. Video ads

Most elements are the same as the normal image-text ads, the only difference is the video element. It allows a brand to publish a 6 -15 second video. A user can click the video ad to see a full screen complete video of up to 5 minutes on a campaign page.

3. Cards ads

Cards ads exist in 3 different types; regular cards ads (as shown in the picture); selective ads allowing the user to choose option A or B to view 2 different advertisement; or voting cards ads. For cards ads, the limit is 10 characters for the title and 30 characters for content.

Latest new ecommerce feature:

This year WeChat launched a new feature that allows ecommerce to be directly linked to a moments ad. With this type of advertising audience targeting is still supported and an Optimized Cost Per Mille (oCPM) function is added. This new ‘ecommerce feature’ is great news for ecommerce marketers opening up a ton of new possibilities.

The new feature works on normal image-text ads and video ads for now. Users will be lead to a customized H5 pages by clicking the text or video.

General best practice case study:

It is always good to look around what other brands are doing in order to get inspiration. One case study we really liked it of Watson, a local convenience store. They launched a regular image and text WeChat Moments ad in Nanning during the opening day of one of its stores. By using WeChat’s target audience function, they were able to target young women between ages 18 to 35 years old. Additionally, they used the WeChat coupon function to attract users to the offline store.

In this case, according to a WeChat report, Watson gained 4.87% interaction and over 2,000 people redeemed the coupon just two days from launching the ad. Reach out if you would like to know more about this case, or any other WeChat advertisement campaigns.

Excited for similar campaign? No matter if you are a newbie wanting to entry China or an expert already in China, AgencyChina can help you from digital marketing strategy to execution. Contact us info@agencychina.com for more information.

Why China? Shopping addiction of China (part3/3)

November 24, 2021March 6, 2018 by Jacco

This is the third article in short three-piece series called “Why China?” This piece explores China’s growing love affair with shopping.

Every country has their own national pastime. As football is to Brazil, bullfighting is to Spain and cricket is to India, retail therapy is overwhelmingly the national pastime of China. Here are five things that you should know about retail in China and what’s fueling the country’s shopping addiction.

Source: Unsplash

1. The world’s largest e-commerce market is in China

China continues to dominate worldwide with its e-commerce fever, and this is only expected to grow at an exponential rate. According to a 2017 Goldman Sachs report, over 460 million Chinese shoppers made up this sector in 2016, resulting in over US $750 billion worth of sales. By 2020, a Forrester Report forecasts that China’s online retail market will reach $1.1 trillion, which is 9x larger than Japan and 17x larger than South Korea.

Source: Unsplash

2. The majority of Chinese shopping is done on mobile

While 49% of global consumers are partial to paying on mobile, 80% of Chinese consumers prefer this mode of purchasing. According to a 2017 PwC report, 52% of Chinese consumers shop online on a daily or weekly basis. Chinese e-commerce giants continue to battle for mobile sales, with apps Taobao, JD and VIP.com wooing consumers with almost instantaneous purchasing and same to next-day delivery.

Source: Pexels

3. China’s biggest online shopping festival broke global records in 2017

11.11, better known as Singles’ Day, started as an anti-Valentine’s Day. It has since grown to be the single most famous online shopping event for retail in China, with sales that outnumber popular western shopping festivals Black Friday and Cyber Monday combined. Alibaba broke its own record in 2017 within a mere 24 hours with $25.3 billion in sales compared to $17.8 billion in 2016.

4. Cash isn’t king

Mobile payments, comprised mostly through WeChat and Alipay, dominate the online shopping experience in China. A staggering $1.48 billion worth of mobile payments were made in 2017 through Alipay. Thanks to the implementation of QR codes that link directly to each customer’s bank account, the process is made even more convenient for the local consumer. This enables instantaneous payment both online and offline through use of mobile apps.

5. Chinese men outspend women online

Men in China are spending more than their female counterparts, according to a 2018 survey by Unionpay, China’s national bankcard association. Approximately 23% of male consumers are reported to spend more than $777 compared to 15% of female consumers. This is the first time that the survey, which is conducted annually, has reported male spending to exceed the amount of that made by females. The drive for this spend? Online gaming and food delivery.

China’s shopping fever continues to grow at an exponential pace, but this is only the tip of the iceberg. Understanding Chinese shopping holidays, China’s consumer market and the impact of key opinion leaders (KOLs) are essential when breaking into retail in China.

Why China? Brands reinvent themselves (part2/3)

December 1, 2020February 27, 2018 by Jacco

Is your company losing luster back home? Brands are finding growth opportunities in China by reinventing themselves in order to targeting a growing consumer market. Here’s how five international brands have started a clean slate by reinventing themselves through their branding in China.

This is the second article in a short three-piece series called “Why China?” This week, we focus on how brands are reinventing themselves in China in order to target a growing consumer market.

C&A: From Cheap to Foreign Chic

C&A, a middle market retailer brand based in Europe, was known for its affordable price points. To make a name for itself in China, C&A knew it couldn’t sustain itself with this image. In order to bring in larger profits in China, it needed to improve its reputation by positioning itself as a higher-end, imported western label. This approach helped with its success in the region. According to its site, C&A China now has 84 stores in 21 cities to date with 15% of its business in ecommerce.

Buick: From Grandfather to Stately Executive

Buick might have a dowdy reputation in the US, but the brand has recently declared 2017 as “its best year ever” in China. The brand is enjoying immense success with 80% of the market being in China and a whopping 9 million vehicles sold to date. By historically targeting their product towards Chinese executives and government officials, Buick has an understated elite status. The company continues to cater to the tastes of the Chinese market, such as creating Envision, the first-ever Chinese-built Buick.

Estée Lauder: From Mature to Millennial Cool

Estée Lauder has come a long way from its department store beginnings and anti-aging products. The brand has experienced success in China with 40% sales growth in 2017 and 50% of its online sales made over mobile. With China being its third largest market after the US and UK, the brand is constantly localizing its digital marketing to better further appeal to a more youthful consumer demographic. Its successful digital marketing strategy includes launching local influencer (KOL) campaigns and focusing its efforts on Chinese platforms such as Alibaba’s TMall marketplace, and digital marketing channels such as WeChat and Weibo.

Abercrombie & Fitch: From Outdated 90’s Sex Appeal to Casual Luxury
Source: Abercrombie & Fitch

Half naked muscle men be gone. Struggling to revamp its passé brand image in order to make up for its declining sales, Abercrombie & Fitch closed 60 shops in the US in 2017. Meanwhile in China, the company has opened 12 brick and mortar locations and launched a Tmall shop to help boost its sales. To better appeal to the Chinese market, Abercrombie & Fitch has taken a different approach to its reinvention by focusing on quality clothes over sex appeal.

Häagen-Dazs: From Family Brand to Romantic Icon

Source: General Mills

Häagen-Dazs is so established in China that it’s now synonymous with romance. The American company strategically modeled itself as an ultra-premium, European heritage luxury ice cream that is made in France. The brand also localized its products and campaigns to suit the market, such as launching a romantically-themed campaign featuring a popular Korean soap opera star to promote its signature ice cream mooncakes for the Mid-Autumn Festival, a local holiday.

These international brands have experienced success by doing the essential market research before launching in China. Key strategies in the process include localizing products and campaigns while adapting to local digital marketing platforms such as Tmall, WeChat and Weibo. The largest opportunities today are available through digital sales, particularly through mobile. Branding in China offers a great chance to create a new brand image while appealing to a growing, local consumer market.

Top 3 Valentine’s Day WeChat Moments Ads

November 24, 2021February 15, 2018 by Jacco

But all those cupid arrows haven’t saturated the loving couples in China because for years now they also celebrate the Western Valentine’s Day on the 14th of February. And as is always the case in China the celebration would not be complete without numerous brand campaigns.

This time we looked at digital marketing campaigns that started from WeChat moments ads. We collected our top 3 for you here!

No 3. Chanel

Chanel did a beautiful campaign around their Camélia series. Starting from a WeChat Moments ad that instructed men to buy their beloved partners more than just a regular flower, instead they should give Camélia Once clicked the campaign lead to a dedicated mini site with videos and other visual material. And if the user clicked any specific product it would link them to the mobile website of Chanel.

The reason Chanel is in third place is because the campaign did not allow for any immediate purchases, not even a mere gift voucher or down payment. However, from the product page of the mobile website users could choose to locate a store closest to them to where they could purchase the chosen item.

No 2. Dior

In second place is Dior with an inspiring campaign that revolved around a contribution to charity. For every bottle of perfume or gift voucher that was bought, Dior would donate 1 USD to the WE Charity.

Besides the being very generous the campaign was also executed very well, making use of a Mini program. The Mobile site of Dior even showed an automatic pop up of the Mini program QR code which we thought was very smart.

The same setup was used for the Chinese New Year campaign and gift vouchers, they were put in the same mini program. And of course, all purchases were fully integrated with WeChat pay.

No 1. Tiffany

And on number 1, using a new feature from WeChat, Tiffany wins the Valentine’s day moments campaign in our opinion.

Initially the campaign showed a regular campaign image, once clicked it would lead to the campaign page with a video and links to their online store.

But once users liked the campaign on their moments the image was replaced by another image hinting to a second part of the campaign “Know how to love, it is worth it”. Once clicked it lead to another campaign page with more videos of inspiring love stories.

Why China? A growing middle class in China (part 1/3)

November 24, 2021February 6, 2018 by Jacco

This is the first article in short three-piece series called: “Why China?” Read on to find out why some of America’s biggest retailers are focusing on selling in China over the US.

A country of firsts

Earlier this month, Starbucks opened its doors to welcome customers to its largest mega-store in Shanghai, China. This 2,700-square-meter establishment is not only the second of its kind created by the company – it’s the first ever of its kind created overseas. This largely symbolic store reflects the company’s effort to continue to woo the Chinese market and expand in China.

Image source: Starbucks

“When people ask me how much can you really grow in China, I don’t really know what the answer is, but I do believe it’s going to be larger than the U.S.,” said Starbucks’s chairman Howard Schulz to the New York Times.

Growing middle class

The opportunity lies in China’s growing middle class market that currently comprises of around 240 million Chinese consumers, according to a report by China Economic Weekly. Many of America’s largest companies are finding greater growth opportunities in China that far exceed the U.S. market. The online retail sector in China, for example, is 80% bigger than the U.S. Companies are finding that earlier entry to market result in a competitive advantage as the market is still in its early stages.

Image source: Shutterstock

The question for many American brands is whether to focus expansion efforts domestically or overseas. The market for online grocery, for example, is a significant area of opportunity for growth that has been identified by both Amazon and Walmart. Their approaches have been different.

Amazon made headlines this summer by purchasing Whole Foods for $13.7 billion in order to better position itself in the American market. A major part Walmart’s strategy, on the other hand, was to focus its efforts in China. According to Bloomberg, online sales for fresh groceries only make a small portion of the entire industry in China worth approximately $695 billion.

By owning 10% of China’s second largest e-commerce company JD.com, also known as the Amazon of China, Walmart now has a greater share in China’s online grocery market by gaining access to China’s local network and infrastructure. Walmart has further expanded on local partnerships by investing $50 billion in New Dada, a major app for delivery, while creating a network of mini-warehouses throughout the country.

Localized approach

China’s growing middle class is a market that will continue to expand in the coming years. However, entering the China market without a localization strategy can prove to be a major risk, especially when done alone. Uber’s attempt to expand in China resulted in a $1 billion a year loss. The result was local car sharing app Didi Chuxing acquiring the company’s China-based business in 2016.

When successful, the opportunity to enter the Chinese market early on can pay off in spades. With a new Starbucks store opening up in China every 15 hours, it’s forecasted to eventually have twice as many stores than the U.S.

Understanding the Chinese market is key if you plan on doing business in China. Having direct access to the Chinese marketplace, localizing your marketing strategy and tailoring online communication to Chinese audiences are some important steps to take before expanding your business in China.

Ecommerce giants opening offline stores

November 29, 2018January 19, 2018 by Jacco

The idea is simple: a physical store that demonstrates the convenience and simplicity of online shopping. It’s the core of “New Retail” – using technology and data to merge online and offline shopping – and China’s biggest ecommerce players are investing heavily in this strategy. In China, 15 percent of retail sales are made online, which means that 85% of sales are still made offline. By moving into physical commerce and utilizing technology to enhance inventory- and customer data management, it seems that ecommerce platforms are trying to digitally transform the 85% rather than to increase the 15%. And by doing so, ecommerce giants Alibaba, JD and Tencent are transforming retail.

Let’s look at why and how China’s ecommerce giants are opening offline grocery stores and what this will mean for customer experience.

Hema – Alibaba

In March 2015, Alibaba launched its first “New Retail” supermarket that aims to replicate the online shopping experience in a brick-and-mortar store. Three years later, the ecommerce giant has 25 Hema stores in seven Chinese cities, including 14 in Shanghai, 5 in Beijing, 2 in Ningbo, and 1 in Hangzhou, Shenzhen, Suzhou, and Guiyang. And this “New Retail” strategy will keep expanding, as Alibaba plans to open 30 more Hema supermarkets in Beijing this year.

The Hema experience starts with downloading the mobile app, that automatically links to the customer’s Taobao or Alipay account. Through the app, customers can order fresh food to cook at home or have it prepared by the Hema chefs and delivered within 30 minutes – all from the comfort of their homes. Customers who prefer the in-store experience are welcome to visit the supermarket, where they can hand-select their fresh food and can choose to have it cooked for eat-in or carry-out, pay for the products at the self-checkout kiosk, or have the products delivered to their nearby home or office within 30 minutes. When using the home delivery option, shopping is simply a matter of scanning the barcode for each product and telling the app how many pieces you want delivered to your house.

In-store-online purchases are collected in shopping bags by employees. The bags
are then tagged and sent to the delivery section via ceiling mounted conveyor belts.
From there, the shopping bags are shipped out to the customers’ homes.

Besides hoping to boost online orders, rope in millions of new customers and expand its network into relatively untapped markets, the main aim of Alibaba is to create showcases that demonstrate the benefits of “New Retail” to both customers and other businesses that want to digitally transform. After all, Alibaba is a technology company that gains more by providing a platform to retailers than by directly competing with them; similar like it does with Taobao.

7Fresh – JD

Following the footsteps of one of its biggest competitors, JD opened its first tech-enabled physical store last week. Under the name 7Fresh – meaning 7 days per week fresh foods – a 4000 square foot store was opened that aims to bring a premium shopping experience to Chinese customers by blending the worlds of online and offline retail.

By empowering traditional retail with ecommerce technology, JD has managed to build an innovative supply chain and ensure efficient sourcing, storage, and logistics operations. This efficiency enables 7Fresh to unlock services and experiences that were difficult to manage in traditional retail models, such as next-level freshness. Eggs, for example, arrive instore within 12 hours of being laid by chickens, and fresh fish and seafood can be caught from the seas of Japan and delivered to the dinner table in just 24 hours. Furthermore, as with Alibaba’s Hema, customers can choose to have their purchases prepared and cooked on site, and JD offers 30-minute delivery on purchases.

7Fresh’s fish department that offers freshly-caught fish and seafood. Customers
can choose to have their purchases prepared and cooked on site.

The 7Fresh experience is similar to the Hema experience: it starts with downloading the mobile app that allows customers to scan and pay for their purchases. Customers in the neighbourhood can either take their products to go, or have them delivered to their homes within 30 minutes. However, 7Fresh differentiates itself by wanting to deliver a personal and educational shopping experience for its customers. For example, “magic mirrors” sense when customers pick up an item, and automatically provide information on a screen about its source and nutrition. In the near future, 7Fresh hopes to have small shopping carts that are able to follow customers around the store as they browse the aisles, allowing them to shop hands-free.

Through its successful ecommerce platform, JD has grown to become one of China’s biggest online grocery retailers by offering a quality customer experience online. But, unlike other markets in the world, in China premium grocery shopping experiences are mainly available online. According to JD, the traditional weakness of China’s physical store infrastructure is one of the biggest factors that drive consumers to purchase their groceries online. However, with the launch of 7Fresh and Alibaba’s Hema, this is expected to become ancient history. In fact, JD plans to open 1000 7Fresh stores over the next five years.

Yonghui – Tencent

In an attempt to challenge its biggest competitor Alibaba, Chinese Tech giant Tencent Holdings Ltd (the owner of WeChat) bought a 5 percent stake in Yonghui Superstores and a 15 percent stake in Yonghui’s supply chain and logistics subsidiary. The investment aligns Tencent further with JD, as JD is already an investor in Yonghui. Founded in 2001, Yonghui has now more than 500 supermarkets in 20 different provinces in China.

Yonghui’s Super Species store in Shenzhen, the new retail unit of Yonghui’s
Superstores that will be integrated with Tencent’s WeChat platform.

According to one of Yonghui’s senior executives, a new retail unit of Yonghui Superstores “Super Species” will be integrated with Tencent’s social media platform WeChat. Both companies are expected to profit from this combination, as Yonghui will benefit from customer traffic generated by Tencent’s WeChat pay and the expansion of its digital distribution channels, and Tencent will benefit from the wider adoption of WeChat payments through data collection and add targeting purposes.

Some might argue that the current integration plan between Tencent and Yonghui Superstores is not at the same level as Alibaba’s Hema and JD’s 7Fresh when it comes to technology. However, the implementation of WeChat pay in Yonghui’s new Super Species Stores opens the door to the possibility of further integrations, and the already existing 500 stores will give Tencent a good edge.

The perfect combination

So, it turns out the answer to our question is that it is indeed the perfect combination. The benefits of merging online and offline speak for themselves:

Enhanced user experience: the barcodes on all products enable customers to trace product origin and read nutritional information.
Improved personalization: app analytics lead to a personalized product page, offering customers a more convenient and efficient shopping experience.
Better/more data usage: customer purchases are logged and preferences are saved, enabling smart supply-chain management and efficient delivery route-planning.