Keeping Up With China's Evolving Customer Journeys

The drivers that determine what Chinese consumers buy and where they buy it have shifted. Shoppers are placing much more emphasis on the experience, the convenience, the service and increasingly being part of a community.

The Harvard Business Review recently wrote a long article highlighting how Chinese retailers are reinventing the customer journey to reflect these new drivers. Many of the article's themes will be familiar to Skinny readers, such as the importance of treating the customer like royalty.

Part of this customer-focus is ensuring that brands are where consumers want to be, when they want to be there. Consumers don't distinguish between online and offline channels, which many Chinese retailers have picked up upon evolving into omni-channel businesses. As a result, Chinese sales, marketing and CRM systems don't differentiate between the online and offline world. This provides a seamless, consistent experience for consumers, and also allows an easy pivot with an event like Covid which has pushed many shoppers online.

Ensuring that the customer is king or queen, means waiting upon them and responding to their needs. Anyone who has shopped online in China will appreciate the importance of quickly answering queries. Yet with China's bursts in demand from massive festivals like Singles' Day, Chinese retailers have found smart tech solutions to keep up with these peaks. AI-powered chatbots such as Dianxiaomi, can now understand more than 90% of customers’ queries. 94% of online service at Alibaba is AI-enabled, and it earns customer satisfaction ratings 3% higher than service delivered by staffers.

Chinese retailers don't treat sales as isolated events. With the lines blurring between marketing and sales channels like we've seen on social media, any stage of the marketing journey, any scan of a QR code, or connection with a brand ambassador can be a sales interaction. Similarly, well-considered loyalty and advocacy programs can ensure an individual sale can morph into an avalanche of sales. The mobile-centric Chinese consumer provides numerous touch points to collect data and understand customers more, to better cater to their needs and even adapt strategies at a macro level.

Even brands who revolutionised retail in China still need to continue adapting to the ever-evolving Chinese marketing models. Walmart is a classic example, opening its first store in China 25 years ago and redefining the way consumers bought groceries. A decade ago, it was the number-2 hypermarket player in the country, but has since dropped to number-4, with its share oscillating at around 10%. Tencent and JD-backed Yonghui, on the other hand, has grown from around 2% to 12% since 2011. Whilst its integration of tech and logistics from its tech backers is relatively well known, a big part of its success can be put down to its targeted sales structure and incentives which keep small sales teams hungry for wins - something many brands overlook when determining their China strategy.

Walmart has been caught off-guard by its more agile local competitors and is rethinking its China strategy amid a shift to ecommerce. It is growing its focus on its Sam's Club stores as more consumers demand premium groceries.Walmart is like many brands in China who haven't evolved fast enough to meet shifting consumer expectations. Areas that needed particular change are having an omni-channel approach, adapting quickly through data-led insights and ensuring sales structures incentivise sales teams on the right things. Get in touch with China Skinny to learn how we can guide you though many of these things.

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