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Summary of China Connect Shanghai 2018


 

 

 

 


Following its 8th edition in Paris in March 7-8th, Laure De Carayon (http://twitter.com/laure2carayonhttps://www.linkedin.com/in/lauredecarayon/), Founder and CEO of China Connect, introduced the china edition, that has gathered its followers to Shanghai to join the big and smaller digital players in every aspect of digital marketing, social commerce and tech innovation in China’s new retail era.

Fundamentals of E-Commerce Success

James Bay,  Managing Partner at“Wunderman  Commerce” used a single E-commerce user journey to point out that online conversion happens at “the right moment leveraged by the right content”. “Content
needs
to be precise (too much information is not only distracting but leads to drop off) to be able to trigger purchase”
. Continued James. Brands should focus not only on big E-commerce campaigns such as “double 11”1 and “SuperBrand day” (a 24h promotion for brands on JD.com, one of the leading E-commerce platforms in China) but also think about the remaining days of the year, which require us to “address consumer needs through with creative messaging, right media and search to drive purchase – these are the fundamentals of E-commerce success.”

 

 

Decoding New Retail – an Integration of Online and Offline
E-commerce in China has grown rapidly in the last 5 years: 90% of transactions on “double 11” happens on mobile phone apps in China, and seamless O2O shopping experiences are becoming crucial. In this regard, for big brands such as Giorgio Armani Beauty, new retail is about integration, amplification: “First, channel integration (online and offline) and function integration: marketing, trade, communications, CRM and of course digital platforms!.” according to Yann ANDRE, Brand General Manager of Giorgio Armani Perfumes & Beauty, “To succeed in this very fast changing environment and build long term solid business, it’s also crucial to leverage new retail as a powerful tool to amplify brand equity and to amplify engaging experiences”. “New retail in China is a result of a love and hate relationship with Alibaba”. Patrick CHEN, CMO at BEAUMANOIR China added, “It’s a journey for new experience. But new retail will not build your brand, it might break you unless you build the right experience for consumers.” As much as new retail is exciting for the world, it comes with its big challenges for brands: “New retail is to develop a brand universe that is clear and unique, and then leverages each channel to translate that universe into a brand experience.” in the opinion of Jacques ROIZEN, EVP at Digital Transformation & New Ventures at Baozun, “The challenge is not just a supply chain or marketing task, it’s a company-wide initiative to ensure successful roll out, from IT, to communication, marketing, but also company-wide KPI’s and incentives.” IT talent and data management has also become one of the main challenges that a lot of brands are facing for Patrick .

In new retail, innovation helped China transit from “made in China”, “copied to China” to “copied from China”
China has started as follower and now become innovators” according to Dr.Gang Lu, Founder & CEO at TECHNODE. To James CHOU, CEO at MICROSOFT Accelerator Shanghai, “There are several main drivers of innovation in China: new government policies, new funds (from government and private levels) and talents (including local hard-working talents and talents returning from overseas)”. Today more than 1/4 of Microsoft investment to startups are in China (201 startups in China among 767 startups worldwide), more than half of the founders are overseas returners. In terms of ecosystem itself in China, Dr.Gang thinks from a data management and E-commerce infrastructure point of view, it’s a relatively closed ecosystem. “However, we can’t say it’s completely closed because the government asks global companies to bring talents from all over the world,” added James. Today’s China is highly technology driven. “You can always find your way in China if you are high in technology” according to Dr. Gang. “Innovation happening in China can be used in and out of China” completed James. In the end, Paul WONG, VP of Innovation at EXPLORIUM CHINA concluded: “Factory will continue to improve, everythingwith AI will improve. I believe we’ll see more and more innovation from China as a trend!”  

 

 

Here is a case on how innovation in supply chain helps solve problems and upgrades the business.
Founded in 2015, the online flower retailer “REFLOWER” has recruited over 8 million clients today. “It’s all about finding opportunities, solving problems and establishing ourselves” Started Vivian YU, VP Supply Chain at REFLOWER. By creating a subscription system with the correct price, REFLOWER has changed consumer behavior from buying 1-2 times flowers to 52 times a year. Finding the pain points of the live flower industry helped REFLOWER to decide to built its very own customer-demand based supply chain, with internal IT system such as OMS (Order Management System), WMS (Warehouse Management System) and a partnership with a professional logistic company. Innovation at production (1st automatic bouquet processing line in China) has increased efficiency 10 times more than the traditional way. “Use industrial thinking to do agriculture, use digital solutions to build products” is the methodology that REFLOWER summarized from earlier experiences.  “When you have no clue in your original industry, you can look at other industries, the basic knowledges from other industry may help to solve your problems and upgrade yourselves.” suggested Vivian.

 

How will Voice Assistants Transform Chinese Homes? Ivy Qiao, Founder and CEO of MORKETING and Nan XU, CTO of CONBOW helped to give us a clearer picture: “It offers an alternative SEO for brands through a more trusted channel for the consumers. Thanks to its intimate relationship with end users, voice assistants can help brands make advertisement more efficiently in a much softer way.”

Google Home, Amazon Echo, Apple Siri… With the development of AI technology, voice assistants are no longer new to us. According to Nan XU, voice assistant is a “next-generation product” who will become the essential part of your life once you start to use it. Future homes will rely on voice assistants on every aspect in life from health to education services. “We expect to sell 50 million Conbow voice bots in the next 5 years. It will definitely change the relationship between brands and consumers” predicted Nan.

Jason HUA, VP of Content at MEIPAI, (China’s 1st short video and short-form live streaming app), shared his vision on how to redefine Chinese youth video interest community. According to Jason, short-form live streaming evokes the third revolution for Chinese netizens, with more vivid, creative expression on words and images!”  Its short form has allowed it to be forwarded easily and hence spread rapidly. Hence, it’s “content upgrading”, it “changes the way of interaction”, and has thus created “a better way for promotion”. For example, MEIPAI has successfully hatched many internet celebrities in its 8 main categories such as “beauty”, “pets” and “kids”, etc. Here the youth community talks in cyber words to sound cute and attractive, such as “小姐姐”(“little sister” in Chinese)”, “鸡冻” (to express “excited” by using same sound but wrong characters which means “chicken freeze”), “爆炸好听” (“explosively good”), etc. “Short-form live streaming has opened up a brand-new way of social for millennials.” Concluded Jason.

 

Talking about internet celebrities, we have to mention key opinion leaders. Xenia ZHANG, Travel & Goumet KOL, Founder of “Green Pepper and Red Pepper” food and travel show, together with Shirley SHAN, Chief Editor at “Youyicheng” from CTRIP and Shawn TANG, Travel KOL, Producer of travel show “Shall We Go” gave us an insight on how KOLs can help brands in Chinese travel industry.

Chinese travel industry has become one of the strongest drivers of global economic growth. In 2017, the number of outbound trips has reached 130 million; the number of inbound and domestic trips has reached 5 billions, with an average travel of 3.7 times/person. And it keeps growing! According to Shirley, in 2018, Chinese travelers will do more international trips, prefer more personalized trips and require more localized travel plans for their destinations. In the era of information explosion, KOLs play a very important role on where the Chinese go, what they want to see, what they eat and how they travel. KOLS’s job is to be the pioneer to experience, to report and to share the updated information from the frontier. Both Xenia, with her highly viewed gourmet travel show (1.84 billion views in the last 10 years), and Shawn, who has got 510,000 weibo followers and over 10 million of full network clicks, have both agreed: “Building real, touching, emotional content with true stories from normal people that resonates with audience is crucial to us.” according to Shawn. “Brand can be inserted through story-telling in order to build a strong emotional link with end users.” “Brand can be everywhere from any time in the content” according to Xenia. “KOLs are hosts of different contents that enrich the platform. KOLs should become the new option for brands to build a reliable relationship with its customers.” Shirley concluded.

We can’t look at new retail in China without mentioning Tencent. Here is how Tencent deepens digital transformation through innovation technology.
“We believe that a new way of marketing has arisen in China.”
started Sophia ONG, GM Strategic & Key Account Service Online Media Group from Tencent. Statistics unveiled the “3 great challenges every business faces today are “unpredictable consumer demand, consumers are no longer brand loyal and the challenge of growing distribution.”  To tackle these challenges, Tencent has established the “WE+” methodology:

    1. “Empower Big Data” – Today, Tencent has over 1,000 PB (1PB=1024 terabytes) data capacity. Tencent’s database reaches over 98% of Chinese netizen. With data integration and customized function, these data will become insights to consumer demand.
    2. “Engage scenario” by personalized brand experience both online and offline, it can connect brands to consumers with the right content.
    3. “Embrace conversion” with mini-program (a build-in app in wechat), E-commerce platform such as JD.com, and offline retail channels, a brand can easily cover every conversion.

Connect with hundreds of millions of football fans across China through digital
Romuald NGUYEN, China Director of French Football Office at French Football Federation (F.F.F), is one of many that choses Tencent’s platforms to be a crucial part of the strategy. In France, there are 15 million followers on French football on traditional social media and 300 million visits per year on website.However, it’s not popular in China (3,7521 followers on China’s micro blog “Weibo” today). To close this big gap, the FFF will pursue 3 goals: promotion, business and education through 3 steps: 1. Find a dedicated agency. 2. Define KPI and target customers. 3. Implement through digital platforms such as live broadcasting, posts, wechat official account (Wechat ID:gh_f7ed568506e3), etc.

 

 

 

Social Media Disrupted: Now what?
There are 2.8 billion people connected on social media in today’s world and China represents 1/3 of it. However, according to Patrice NORDEY, CEO Asia at FABERNOVEL, social media are disrupted, hence we need better data transparency, targeting accuracy and more valid KPI vs ROI tracking. Here is what is already happened / can happen next: 1. Make sense of data: 68% online data are visual. The real challenge is how to make sense of all these images, videos, facial emotions and also voice emotions. 2. Close relationships convert better – “we are all nano influencers that impacts the most our own circle”, emphasized Patrice. Today we already have influencer marketplace where we can engage with one or more KOLs and CPS (cost per sale) based platforms. What will happen next is blockchain powered social networks with companies as ROBIN8, who was part of China Connect Paris forum and ONO, China’s first blockchain-based decentralized social network. 3. Content distribution is redefined from social graph to AI-powered content curation. 4. AI-powered analysis such as voice bots are the solutions for the future. “Today we measure what has happened but the future is about how to cause something to happen.”  concluded Patrice.

Next guest spokesperson, Joanna LU, VP Marketing at Coca-Cola Great China & Korea, shared her case on how to cause something to happen by transiting from “story-telling” to “story-doing”.
In today’s China, there are on average 3.3 devices per head, 3.5 million apps (among which most were created only in the last 3 years), over 20 million daily O2O food orders and 1 billion videos are viewed each day. To handle a market full of distractions: “stories are fundamental for human, it builds beliefs, preserves knowledge, creates memories, creates possibilities, unleashes imagination and delivers inspiration.” explained Joanna. “Stories are always part of Coca-Cola’s DNA” : in this year’s “share-a coke FIFA 2018” story, Coca-cola has come with personalized bracelets with bar codes, online games, online voting system, online interaction, together with offline personalized packaging to complete the campaign and reach different types of audience. “Today’s consumers are all “me” in “we”. “What we look at actually is families, followers and friends.” From “story-telling” to “story-doing”, Coca-Cola makes the whole experience personalized, participatory and hence make every customer into advocates. “In today’s world, story doing is a science, an art. When science and art are coming together, it will create wonder, lovely brand and desire.”

 

Going further into gaming, let’s take a closer look at how brands can win the game in China by engaging consumers through play with Georg WARGA, Founder, Creative Director from GOODSTEIN “People always play games”.
Today, people spend more time on mobile games compared to pc games. mobile game penetration among users aged 25-40 years old has reached 62%, daily average time spent on game is over 1 hour. The wechat mini-game “Jump-jump” once had 20 million simultaneous players and brands could pay up to 5 million RMB per day to “purchase” a block in this game. Alipay launched “Five Lucky Cards Collection” campaign during Chinese New Year. The number of users who participated has increased from 791,405 in 2016 to 251 million in 2018. Gamification can also be leveraged in different dimensions such as charity and finance (sesame credit). According to Georg, the future of gamification is AR, VR, MR as data become more accessible. Games are not just for kids” concluded Georg.

 

 

 

When we move to the topic of luxury industry, we can’t ignore a rising customer group – the millennials, especially the Chinese millennials. A fireside chat between Yvonne WANG, President at HEARST MEDIA CHINA, and Patrick FAURE, Strategic Planning Consultant, have given us an insight on how to connect luxury and millennials in the digital era.
Today, 32% of the luxury goods are purchased by Chinese and it’s predicted that it will reach 40% in 2024, among which 56% will come from the Chinese millennials. They are the generation aged from 18 to 33 years old, the 1st generation of single child policy, born with wealth. They are typically open and acceptive to new concept and technology, they travel a lot. “Chinese millennials dare to make purchase online or through mobile apps.” concluded Yvonne. To reach this audience and connect them with luxury goods, Yvonne believes wechat is one of the most efficient ways – HEARST team posts more than 50 posts per day and over 600 short films per year. Another way is to integrate paper with digital such as “SuperELLE” and “ELLE Man Youth”. “In China, the only influencers are entertainment celebrities” according to Yvonne. For example, Tiffany signed a young celebrity “Nini” and launched a “Follow your heart” limited-edition necklace (150 pieces) in January 2018 to target younger consumers. It was sold out within few days through wechat mini-grogram. Yvonne also believes physical stores are value-added touch point for brands to engage millennials because they like to get involved, feel and experience. Hence, it needs to be entertaining and interactive.

Apart from facilitating marketing and sales in the luxury industry, technology such as blockchain makes information of luxury goods exchange safer. Alvin FOO, Managing Director at REPRISE, together with Emmanuelle COLLET, Co-Founder of ARIANEE, Gregory POUY, Grand Evangelist, at ARIANEE (www.twitter.com/gregfromparis ), Aidaa WONG, Co-Founder & CEO of LUXSENS, explained :

In simple words, blockchain basically represents trust and safety for sending information from point A to point B in the digital world. “Blockchain is putting trust in a digital form.” explained Gregory: “It’s too much a buzz word that either scares or excites people. I believe consumers don’t need to know much about blockchain but they will enjoy using it when there is a lack of trust.” “It’s a game changer for luxury brands as they will be able to communicate with the owner of a product even if it wasn’t purchased directly from the brand.”  further explained Emmanuelle. “In the current second-hand luxury goods market, buyers are unable to tell whether the goods are authentic or not. Blockchain makes product information available on demand for both sellers and buyers via digital assets. Each luxury product’s information and history are recorded and can be viewed by anyone in the network. Sellers and buyers can view proof of how a product has been authenticated with details. The beauty of blockchain is once the information is logged, it won’t be editable.” Aidaa emphasized. “Blockchain will drive the luxury industry towards a future when attributes such as traceability and authenticity will be profoundly promoted. By linking digital certificates to purchased goods, buyers of luxury goods can buy with greater level of confidence regardless of whether they are purchasing online or from second-hand retailers.” Alvin FOO concluded.

Another indicator of lifestyle in China is the fast growth of the fitness industry. Mike YING, CEO of EMOTION(CN) gave us an insight on the future of fitness and lifestyle in China.
There is a big gap between the economy growth and growth of the health & sports industry in China. Before the economy boost, Chinese people suffered short life span (on average 35 years old) and had limited sport activities available. Nowadays, world renowned fitness clubs such as “California Fitness” have entered China. 24-hour digital managed gyms and fitness centers such as “SuperMonkey” and “Liking fit” have immerged and well accepted overnight. In 2003, there were only 3.5 million gym members registered in China while there were already 50 million in the United States. However, we can’t look at China as one simple market when we talk about fitness. The penetration rate of fitness in Tier 1 cities such as Shanghai and Beijing are significantly higher than tier 2 and tier 3 cities. Fitness has become an important indicator for lifestyle on digital platforms. “Hence, brands need to position themselves properly and find the relevant KOL and platform when they do digital communications. They need to differentiate the strategy in big cities and small cities.”  Mike concluded: “What is the future of fitness and lifestyle? – All digitalized!”

The forum ended with Susanna CHIU, Director at Li&Fung Development China, on creating smart supply chain in the new retail.
As the leading company in its industry, Li &Fung has created a closed loop supply chain based on consumer needs. “Li & Fung is leading the creation of smart supply chain by digitalizing everything.”emphasized Susanna. She also announced proudly in the end: “Explorium (Wechat ID: Explorium) – a platform to explore the experience and innovation of supply chain, is responding to the State Council’s plan on building smart supply chain in China and building an open innovative ecosystem.”

 

 

 

 

In the end, Laure de Carayon announced the 3rd edition in Shanghai in 2019 and gave rendez-vous for the 9th edition in Paris, March 12th -13th 2019.

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