I recently spent two weeks in China to attend an event hosted by eCommerce company JD.com for analysts and retail thought leaders. Here are my takeaways on the state of eCommerce in the world’s largest eCommerce market:
- Customers in China seek novelty and individuality. Nearly 60% of metropolitan Chinese consumers are Progressive Pioneers — the most demanding, advanced, and innovation-hungry digital shoppers. (By comparison, Progressive Pioneers make up less than 1 in 4 US consumers.) To meet Chinese consumers’ expectations for novelty, retailers and brands are experimenting with new ways to sell, offering exclusive products and limited runs and partnering to offer cobranded merchandise. Steph Curry and Under Armour launched (and sold out) his Shanghai-inspired Curry 4 sneaker on JD.com with a “See Now Buy Now” live stream in China, underscoring how efforts such as live streaming and shoppable videos are taking off. And fashion brand Ralph Lauren launched a limited-edition Polo shirt on WeChat for $4,000 RMB/$600 USD that sold out within 48 hours.
- Grocery and convenience stores offer the latest push in retail innovation. Both Alibaba and JD.com have opened grocery stores that push the boundaries of digital store innovation. Alibaba’s Hema and JD.com’s 7Fresh supermarkets use digital price tags, dynamic digital displays, and self-checkout using facial recognition and/or mobile payments, among other experiences. JD.com has also been testing unmanned convenience stores in its office buildings and recently announced a deal with a real estate company to launch the stores in cities across the country.
- Omnichannel — or “Online to Offline” (O2O), as it is called in China — is nascent but growing fast. Alibaba and JD.com are both online pure plays that are trying, in various ways, to stitch together online and offline experiences for shoppers in China. And since they’re also marketplaces, they’re helping the brands on their platforms be more O2O-focused, too. For example, JD.com is using its logistics arm to help retailers, such as Sam’s Club, use their physical store inventory to fulfill online orders on their brand store on JD.com’s online marketplace.
Look for more insights examples in my upcoming research on eCommerce in China!