Today, we’ve got a roundup of China e-commerce news, new developments and trends. According to Business Insider, Chinese e-commerce is growing quickly but still faces a big challenge of logistics and getting products to consumers in “the last mile.” Luxury products in China are growing leaps and bounds as the Chinese middle class grows even with the recent economic downturn says a recent Social Brand Watch post. Alibaba subsidiary Tmall officially launched its luxury product small in a partnership with flash sales site Mei.com.
You’ve heard of Jack Ma‘s brilliant $14 billion Singles Day marketing success in China? This September 9th, watch out for a new Ma creation – China Wine Day destined to promote his wine estate Château de Sours in Bordeaux as well as create another blockbuster promotional day for other retailers as well. Internet Retailer reports on small Chinese online retailer Aishang Flowers Co who admitted to nearly $300,000 of fake orders before going public.
The Chinese government launched a campaign to crack down on e-commerce, trademark violations, counterfeit and poor quality products. Tmall’s biggest competitor 1haodian has launched “foodie day” with a high-profile guerrilla marketing campaign. In contrast to the Western world, you won’t find much humor in Chinese beer marketing reports Social Brand Watch. Walmart launched a campaign to connect Chinese consumers to the world to grow a stronger connection with consumers which has been a challenge since it opened in China in 1996.
Chinese e-commerce companies are growing by leaps and bounds, but there’s still one problem
China’s e-commerce market is already the largest in the world and is rapidly expanding, but there’s one problem. Companies such as Alibaba and JD.com, the two biggest retailers in the nation, are running into a wall when trying to reach more shoppers, as many of China’s 1.3 billion people live in rural areas that commercial trucks cannot easily access.
But to their credit, retailers based in China have significantly improved their delivery logistics in 2015, according to a new CBN Data report cited by Internet Retailer. The total volume of e-commerce packages climbed 40% year-over-year in 2015, as more than 20 billion parcels were delivered in China. And 80% of those parcels were ordered online.
Speed and efficiency of delivery also increased by 14% to an average of 2.6 days to fulfill orders. Astoundingly, Chinese customers received free shipping on 87% of e-commerce packages, though it is unclear if retailers or delivery companies paid for the cost of shipping. Via businessinsider.com
Future of Luxury in China
Recently I suggested that China is entering and creating a 2.0 version of consumerism, predicting Chinese consumers will take the American version and quite literally “hit it out of the park”.
Within this context, it is interesting to consider luxury … China’s most consolidated and talked-about category.
Since the reemergence of consumerism in China, the presence of global luxury brands has acted as a harbinger for the nation’s wider transformation. Luxury has consistently been the symbol of arrival at the national, city and personal level. Via socialbrandwatch.com
Tmall Launches Luxury Channel
Tmall has officially launched their luxury channel in collaboration with flash sales site Mei.com. This has been part of a long-term strategy for the e-commerce platform to bring more luxury and premium international brands to their site. However, luxury brands need to think carefully about the long-term consequences of being present or discounted on Tmall.
In a media savvy opening last week in Shanghai, Tmall and Mei.com officially announced the new luxury channel with a celebrity event and fashion show featuring Olivia Palermo and local singer Li Yuchun (Chris Lee). The event was simulcast on both Tmall and video-site Youku to create excitement about the new luxury channel.
The luxury channel is part of a strategy by Tmall and owner Alibaba to bring more luxury and premium fashion brands to the e-commerce platform. Last July, Alibaba invested in excess of US $100 million in Mei.com, ostensibly with the goal of introducing the flash sales site directly to Tmall users. While some luxury and fashion brands, including Burberry, Calvin Klein, and Lacoste, have set up Tmall stores, other luxury brands have been more reserved in their enthusiasm for the platform. Via socialbrandwatch.com
Jack Ma will create China Wine Day on September 9th
Last week, we provided our analysis of how Tmall was changing the Chinese calendar, Jack Ma has now announced a new sales day devoted exclusively to deals on wine, dubbed 9/9 – the number signifies the date of September 9th with double use of the Chinese word for nine, that also has the same pronunciation as the word for alcohol.
In what Ma dubs the ‘day of wine’ – looks like it will be a booze-based version of China’s ‘singles day’, which Ma and Alibaba popularised as an online shopping event in China, akin to Black Friday in the US.
Ma, the recent purchaser of the wine estate Château de Sours in Bordeaux, will be hoping for similar success with Wine Day. Last year, his China’s singles day sales totalled US$14bn, becoming one of the most important events in the Chinese retail calendar.
It is expected that Ma will roll out pricey bottles from his newly acquired Château de Sours, as well as involve his celebrity friend actress Vicky Zhao, who now owns Château Monlot. This suggests Chinese-owned Bordeaux estates could be the primary focus of China’s Wine Day. But read on, there is hope for everyone else. Via socialbrandwatch.com
Fake orders: The dark side of China’s booming e-commerce business
A small e-retailer created a big news recently in China when it admitted to a practice many believe is commonplace on China’s online marketplaces: a seller placing fake orders to boost its apparent sales and thus its rankings in search results on the country’s huge online shopping malls.
Flower e-retailer Shanghai Aishang flowers Co., Ltd. last week confessed in its prospectus filed in advance of an initial public offering of stock that it hired workers to place orders from its store on Alibaba Group Holding Ltd.’s Tmall.com and JD.com, two major web marketplaces, in order to move up in search results.
The Shanghai-based company spent 739,268 yuan ($113,690) to hire individuals who placed 163,676 fake orders on marketplaces in the first seven months of 2015, representing 42.02% of its total orders. For the same reason, Aishang Flowers also spent 989,165 yuan ($152,097) in 2014 and 26,234 yuan ($4,033) in 2013, respectively, accounted for 24.05% and 4.95% of orders in those two years, according to its prospectus. Aishang Flowers said in the prospectus that it considered creating fake orders “a marketing approach” and didn’t include the fake orders in the sales reported in the filing. Via internetretailer.com
China regulator to launch campaign to clean up e-commerce, online ads
Chinese authorities will launch a campaign to clean up e-commerce – targeting trademark violations, counterfeit and poor quality products and the faking of transactions to boost a merchant’s online rankings, the official People’s Daily said.
It did not name any specific companies but the move has the potential to affect internet firms such as Alibaba Group Holding Ltd (BABA.N), JD.com Inc (JD.O) and Baidu Inc (BIDU.O). The campaign by the State Administration for Industry and Commerce will run from May to November, the paper said.
The regulator was quoted as saying it would step up its oversight and give out harsher punishments for those found in violation of regulations. It also called out false and illegal advertising online, according to the People’s Daily, a subject which has caused controversy this week. Via reuters.com
Tmall’s biggest competitor launches “hunger game”
In the battle for e-commerce food supremacy, 1haodian has been causing Tmall a headache with a campaign that quite literally creates ‘hunger”.
As part of their now famous mimicry of Tmall’s commercial promotion day, key competitor 1haodian has created “foodie day” (饿货节) to take on Tmall’s “food obsessive” (吃货节) day.
In a pattern of ‘one-upmanship’ that is now starting to dominate netizen life, 1haodian has been chipping away at becoming the go-to food food specialist, as Tmall becomes a more a more wider lifestyle-based e-commerce platform, facing intense competition from JD.com, particularly in the area in the area of electronics and household appliances. As Tmall develops more e-stores within its mega e-store proposition, it becomes more vulnerable to competition. Via socialbrandwatch.com
Why Beer is not Funny in China?
When people generally think of beer advertising, they associate it with wildly funny ads ranging from the lewd to the cleverly hilarious. In fact, it was a reputation that brand inherited after years of being the most entertaining of categories. Beer brands created loyalty and mass followers on cult followings of their ad campaigns. So much so, that the gag forced the product well into the background.
While the cultural sands have shifted, there still remains the expectation that beer brands will raise a laugh. Think for example – Dos Equis’ “World Most Interesting Brand” – a serious message, but a good laugh at the same time. In China, beer has never really built up the courage, to grab the mic, and get the crowd laughing. Instead, we have seen more almost two decades of beer swirling around the glass, ice, wheat, and blokes pulling back from their beers expressing some variation of “wow, that tastes great”. Via socialbrandwatch.com
Walmart gets ‘spacey’ to launch e-commerce in China
To launch a new service providing Chinese consumers access to overseas products, Walmart has launched a creative series of digital activations – with the theme of connecting local shoppers to the world. Walmart has been in China since 1996, but has struggled to create a powerful retail foothold as it has elsewhere in the China. To capture the new realities of Chinese shoppers – e-commerce savvy and globally focussed – Walmart has launched a new service to their China app. Through the app, Chinese e-shoppers can buy products directly from abroad.
Recently, Walmart announced negative retail growth for the first in their 35 year history, a downturn they associate with the increasing rise of e-commerce, particularly in China. To signify the importance of the move, the American brand has launched on confident and creative campaign on WeChat and other social platforms.
Firstly, Walmart uses GIF posters (animated digital images) to showcase the brand’s global achievement in developing retail solutions for their customers. For example, it is that Walmart ‘fills the shopping trolleys’ of consumer in 28 countries, and that their total stores have eclipsed 10,000 globally. The series of images, replicate the mechanisms of product delivery and logistics – a powerful way to seed the idea of Walmart as a e-commerce concept. Via socialbrandwatch.com
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