Chinese New Year provides a perfect reason to look to the East for inspiration on how to innovate in one of the big untapped markets: mobile payments.
Today is Chinese New Year, called the ‘Spring Festival’ in China, when everyone travels to their provinces to celebrate the most important holiday in the calendar.
Tradition sees Chinese families get together for dinner on New Year’s Eve, with children given red envelopes called hóngbāo containing ‘lucky money’ and good wishes on New Year’s Day. This being China in the 21st century, China’s biggest internet companies – Alibaba and Tencent – have created virtual red envelopes, enabling app users to send money with a few taps of a smartphone. Billions of virtual red envelopes will be sent over the next couple of weeks.
The vast majority of web activity in China happens through proprietary applications run by Tencent and Alibaba. The two dominate digital life in China, creating an effective digital duopoly. In the West, we talk about the influence of the big internet giants such as Google, Amazon, and Facebook. However, understanding what Tencent and Alibaba are doing with apps, mobile payments and ecommerce can give us a real insight to what will happen in marketing in the West.
Alibaba is known globally for its B2B ecommerce platform Alibaba.com, as well as retail websites AliExpress, Taobao and TMall. Alibaba’s online payments system, Alipay, controls about half of China’s online payment market. Combine eBay, Paypal and Amazon and you get an understanding of Alibaba’s brand portfolio.
Alibaba’s rival Tencent (meaning ‘soaring information’ in Chinese), owns WeChat, which has one billion users, as well as the older messaging app QQ. WeChat is Facebook, Twitter, Spotify, WhatsApp, Paypal, YouTube – as well as gaming and reading – rolled up into one super app.
For marketers, Tencent and Alibaba own the interface to the consumer across multiple touchpoints and the data that comes as a result of that. If you want to reach the Chinese consumer, you have to do that through Tencent and Alibaba.
So why has all this happened? First, young Chinese people are open to sharing personal content online – and, indeed, broadcasting their daily lives through live streaming. China has become the largest market for live streaming, with 2018 revenue expected to reach $4.4bn (£3.2bn), according to Deloitte. Every day, young Chinese people spend money on virtual gifts on their favourite live-stream entertainers.
Not for these folks the concept of ‘sticking to the knitting’ or ‘core competence’. No five-year plans or decision making by committee. Instead, lots of iterating and launching new products; leaps of faith are the order of the day.
Third, mobile is ubiquitous in China. In the West we might ask, ‘What is our strategy for mobile?’ In China, mobile is the strategy. That means in China the e-commerce paradigm has shifted to brands and platforms that offer a complete brand experience rather than a narrow focus on sales. As a result, many Chinese brands are doing things that are yet to be seen in the West, integrating experiences across all touchpoints and channels to create a seamless and immersive experience.
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