4 Things to Know about eCommerce in China


By Martin Suter

On the global business landscape, it’s hard to argue with the fact that China leads the way in eCommerce. From the online giants like TMall and JD.com to the funds being funneled into startups, there’s almost no better place to see what will be on the horizon in other world markets. Below are four things that really demand attention.

1. Over 90% of eCommerce transactions are done on mobile devices.

The Chinese market is highly mobile and very social. A typical Chinese person spends about three hours a day on WeChat. It’s an amazing platform. WeChat started as a social app—think Facebook on steroids—but now has its own integrated payments and eCommerce capabilities. Brands can build their fan base, push new content, and convert casual fans to paying customers, all from within the app.

2. Just about every product uses QR codes.

Every ad you see—on a subway, a billboard, or digitally—has a QR code. Every package includes a QR code. The goal is to entice consumers to click through, often into the reader integrated in WeChat. Instead of just hoping that a potential consumer will remember the domain of an ad or snap a picture, QR codes engage the consumer directly and immediately with that ad and its brand.

3. Online-to-offline (O2O) plays a significant role in eCommerce.

Last year, over 90 companies received funding to deliver fresh fruit in China. If you want two bananas and a kiwi delivered to your desk in 30 minutes, you’d get them—with essentially free delivery. The service is that granular, and there are lots of options to choose from. It’s hard to drive anywhere in China and even harder to park, so going to a store is not that convenient. To a large degree, it’s the nature of the country and its people to prefer ordering online and the expectation of delivery in under an hour that is driving the rapid growth of O2O businesses. 

4. The Chinese market is largely coupon- and promotion-driven.

In China, people actively look for discounts on local restaurants or goods and make their purchase decisions around the availability of current special markdowns. In addition to regular holidays and calendar occasions, eCommerce companies have invented their own “occasions,” much like Black Friday and Cyber Monday in the States, but on a much larger scale. Whether it’s the anniversary of the company’s launch or a “double date” like 9/9 or 11/11, companies use massive promotions to constantly tempt consumers to buy.


What You Need to Know about O2O Commerce in China


By Martin Suter

O2O, short for online-to-offline, is a business strategy that uses online content, such as e-mail marketing, websites, ads, and more, to identify potential customers and then drive those customers to brick-and-mortar establishments for additional sales.

We’re seeing companies in China build out high-density footprints where customers who walk in off the street or access services through a mobile app can order home or office delivery and get their products in just 30 minutes. That high-density buildout of what are essentially fulfillment centers is unique to China.

O2O encompasses a wide variety of services in China, from the equivalents of companies like Groupon and Uber to services that you don’t typically see in the States, like in-home haircuts, on-site massages, and dry-cleaning delivery.

Even services that wouldn’t necessarily be considered O2O in the United States—making a reservation at a restaurant, for example—are often rolled into the O2O category in China, increasing its breadth and utility as a category.

This boom in China’s O2O businesses comes from users demanding convenience.

With most of China’s eCommerce already being accomplished on mobile devices, it makes sense that the O2O model works well there. You can order and pay for your goods on mobile, then pick them up or have them delivered at your convenience. O2O helps streamline this entire process in a dense, digitally connected country.

While O2O is not entirely the same outside of China, it is starting to pick up in other markets as well.

For example, food delivery services are cropping up in the States—Uber is moving into food delivery, Amazon has launched Amazon Fresh, and individual stores may offer local delivery. The trend is clearly moving in the direction of on-demand O2O services. The Chinese, though, have already perfected this model.