Delving into the Chinese Mindset – What are the analyst reports missing? (Part 2 of 2)

With the previous post, we briefly explored the statistics that show a very bright future for Chinese eCommerce, while detailing the complexities of Chinese society and how it may influence consumer purchasing behavior. But what does this all mean? We recently travelled to our offices in Beijing and Shanghai to gain insight and perspective into the Chinese market.

The Chinese consumer is similar to Western counterparts
In a broad sense, Chinese consumers shop for products, and make purchasing decisions, very similarly to American shoppers. What this means is that although there are differences that we must consider when marketing towards Chinese consumers (cultural practices and understandings such as “face,” use of colors and specific phrases), they are essentially driven by the same causes that influence American consumer behavior, which includes a need to represent one’s “cool” factor through products and significant usage of consumer reviews to prove value of similarly priced products. What we see here is that Chinese consumers use Weibo to post pictures of their newly acquired handbags, use RenRen to have short discussions with their friends on the hottest new trends, use forums to discuss the latest design details of Li-Ning shoes, and shop for products (especially luxury oriented Western brands) based upon perceived value rather than always basing purchase decisions on price.

Chinese website design emphasizes functionality and user experience over flashiness
Website design within China has evolved from a mish-mash of attention-grabbing graphics to one that incorporates Western design elements and user experience considerations. Although this is still a developing practice area as Chinese designers begin incorporating Western design best practices and adapting them to the Chinese need for functionality and “clickability” (this is mainly due to Chinese characters being more difficult to type on a keyboard), what we see are a consistent trend of Chinese websites looking more similar to American websites, while incorporating showcase areas for reviews of products and brands, as recommendations heavily influence purchasing decisions.

Popular websites, including TaoBao and T-Mall, heavily incorporate customer service functionality as phone numbers as easily found and nearly every store feature click-to-chat functionality. As the trend continues, we certainly expect user experience to take center stage, as websites continue to adopt Western design cues while adapting them for Chinese expectations.

Western brand advantage and the customer-centric mentality
As part of a push for international – or Western – brands that wish to penetrate into the Chinese market, it is necessary to realize that there are many similarly functioning Chinese brands out there that compete on price alone. Western brands have an inherent advantage in having a premium attached to its products and brand. In order to stand out within China, international brands must differentiate themselves on a more qualitative judgment of value based on rarity, pride, and societal elevation.

Additionally, Chinese customers are expecting quick service and instantaneous gratification as click-to-chat functions are the norm, where customers can instantly chat with customer service representatives over QQ, and where independent logistics companies compete for same-day and next-day shipping orders. What this means is that Western brands are inherently perceived as more valuable, or better quality, but this also means that Western brands are held at a higher standard than domestic Chinese brands – and this extends to customer service, where instantaneous chat functions, extremely quick and prompt shipping, and simple and convenient return options are a must-have.

This is a just a small sampling of the many considerations that must be included in an eCommerce implementation, let alone a brand development or business strategy case. Even within eCommerce, additional considerations that we must keep in mind include logistics and warehousing, online and offline distribution of products and product classifications, along with SEO/SEM and appropriate advertisement placement. Along with the additional factors, there are even more numerous cultural implications that must be kept in mind to ensure a successful business both on- and offline.

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