We shop online primarily on familiar platforms like Amazon or eBay. But what path will online shopping take outside Europe and the USA? Dirk Ziems and Sami Wong looked at the development of e-commerce in China and explain why this is already years ahead of the West.

Singles’ Day on November 11 highlights how China has become the world’s most important e-commerce market. Starting from the idea of singles celebrating their single status with other singles, it has become a mass phenomenon where shopping knows no limits. This year, 83 billion yuan (around 11 billion euro) was spent, by far the biggest share online. The concept m team in China has followed the rise of e-commerce over the last five years, watching rapid development reflected in the establishment of very efficient logistics and home delivery systems in the major cities, the successful expansion of the product range to areas like food delivery, and the very innovative linking of social media and commerce on the leading platforms Taobao and Fifty Cents.

The background to the online boom

What were the initial conditions that allowed online retail to establish itself so strongly in China? One was clearly that development in China leapfrogged several stages which the USA and Europe went through before e-commerce exploded. Where the West started with concentration of retail power through the creation of major chains and store outlets (e.g. Gap, H&M, Best Buy, Saturn), the Chinese market focused directly on online retail. Although there are malls and stores in China, these have a different function from those in the West. In China, malls are more social meeting-points, particularly for young consumers meeting for coffee and checking new trends. Chains with a mall presence accordingly achieve primarily high image awareness, and the young generation shops for preference on the internet. Our depth psychological interviews with generation Y and Z Chinese shoppers showed that online shopping is an important psychological medium of development for young people.

Refuge for generation Y

The young generations in China are experiencing a programme of cultural transformation. On the one hand they are still tied to the conventions of obedience towards their parents and the institutions, while on the other they are seeking their own identity, based on individualist values following Western influences. Within the protected space of extended expeditions through online stores, young people are accordingly pulling together pieces of their new Western-oriented identity. For them, online e-commerce worlds function like dream worlds, making it possible for them to catapult out of everyday life and leave behind the dull reality of cramped living conditions and conflicts in the family and working environment. As 90% of e-commerce is done on the smartphone, it is also a constant companion during the day and a constantly available refuge.

Taobao: pioneer of social e-commerce

It is no exaggeration to say that e-commerce trends in China are now well ahead of Europe and even the USA. For example, Taobao, the leading Chinese platform, is setting standards and seems far more innovative than Amazon or eBay. Like Amazon or eBay, Taobao is basically a platform bundling lots of small e-commerce retailers (“trusted shops”, “power sellers”). Unlike Amazon and eBay, Taobao takes a much broader approach to the different moods of online buyers. At Taobao both shoppers with specific needs and consumers enjoying extended and inspirational shopping expeditions get their money’s worth. A central principle at Taobao is the integration of personalised and social components within the shopping experience. This starts with the recommender function, which recommends not only single products but also shops offering customised product ranges and styles. The individual stores offer personal contacts directly accessible by chat or video chat, with advice on special features of the products or recommendations for alternatives, just like salespersons in real stores. Taobao also incorporates a sort of Facebook function allowing communication between shoppers. For example, you can directly contact people who rated a certain product, chat and talk shop about product trends. Or you can surf through the assortments together with peers and chat during shopping expeditions.

The advantages of qualitative research

Particularly for product providers from the West that want to appeal to younger high-spending target groups in China, a successful e-commerce presence is essential. Our qualitative e-commerce research helps develop suitable strategies for this. Based on supported e-commerce surfing sessions, we can identify very specifically where brands and products have been and should be present. Concept m takes a comprehensive approach which considers not only criteria of technical usability but also the general intentions and states of mind of online shoppers. The forms of e-commerce in China are in a constant state of development, and tracking current trends is an ongoing and exciting task for qualitative research.

If you have any questions, please contact dirk.ziems@conceptm.eu or sami.wong@conceptm.eu.

This article appeared in the December issue of Research&Results.

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