China’s Mobile E-Commerce Market Is Saturated. So How Do Brands Break Through?

Mobile-based e-commerce in China is bustling. Time spent using mobile devices among China’s consumers doubled since 2012, and Mobile is now a dominant source of shopping. Alibaba – the world’s largest retail market, based in China – said that 78% of its retail revenue growth is attributed to mobile. A recent study in China shows that the number of shopping trips to actual brick-and-mortar stores has decreased, and consumers are relying more on handheld devices for buying snacks, clothes, household items, and banking. But the mobile market in China is in a precarious place: maturity. This is something Apple Pay endured this year with lower-than-expected adoption rates in the country. In a mobile world, marketers have many advantages, including a shorter lead time (from driving awareness to purchase) and a robust digital footprint (for better optimization). In China, where so much commerce is derived from mobile, there are several things marketers can do to optimize their strategy:

• Create impulse purchase behaviour through flash sales or occasional seasonal promotions. One of the key slogans for mobile e-commerce these days in China is “shop anytime, anywhere, instantly.” Leveraging flash sales or occasional seasonal promotions such as “Double 11 Festival - Bachelor’s Day”  can fulfill the customers’ psychology of feeling a sense of instant gratification in getting the best deal on good quality products, creating value sales peaks.
• Encourage bulk purchases via bundle pack discounts – given the convenience of mobile shopping experience – from opening the mobile apps to mobile payment to product delivery, it gives consumers the extra incentive to buy in bulk. Thus, bundle packs can often help marketers to drive volume sales on mobile platforms.
• Exclusivity in mobile e-commerce – to minimize the amount of cannibalization of mobile sales to in-store sales, marketers should differentiate product assortment between the two channels. By strategically creating exclusive items or product lines specifically for mobile e-commerce, it can help to increase traffic to e-commerce sites.

Based on the growth of mobile e-commerce in China, there are definitely opportunities for marketers to not just focus their attention on promotion activities and product line-up but also revisit their mobile advertising strategy. Based on our latest ROI Genome findings, mobile advertising ROI is being ranked one of the top three ROIs but still with relatively low investments compared to other marketing activities in China.