Adrian Peter Tse
Sep 30, 2015

Chinese marketers and state council prepare for O2O push

CHINA - A World Federation of Advertisers (WFA) study has highlighted the challenges and opportunities facing marketers in China who want to use mobile to drive O2O business performance.

Chinese marketers and state council prepare for O2O push

Conducted in partnership with CollabCentral Consulting, the research revealed that 82 per cent of marketers in China are currently focused on using mobile as a brand-awareness channel, rather than for sales, e-commerce or driving sales offline. 

However, only 26 per cent of respondents said they expect mobile to be used solely for this purpose in a year’s time. Almost half of the respondents (48 per cent) said that mobile will become a cross-purpose channel for marketing and sales. 

The study was based on responses from senior marketers from 20 companies in China that represent brands spending nearly $30 billion globally on marketing. ­The survey revealed that mobile marketing tactics and strategy for O2O commerce are due to change dramatically in the next 12 months. 

According to the study, the number of organisations and marketers using China’s popular mobile messaging app WeChat has risen 305 per cent since the WFA conducted similar research in 2014.

In 2015, 85 per cent of marketers said they have used mobile messaging as their key marketing communication platform, up from just 21 per cent in 2014. 

“Ecommerce makes up just 10 per cent of total of commerce in China,” Nishtha Mehta, founder and 'chief instigator' at CollabCentral Consulting told Campaign Asia-Pacific. “Ecommerce is exploding, but it still has a long way to go and mobile can do a great deal to drive conversion offline.”

The Chinese government is also getting behind O2O commerce. A State Council document issued on 29 September highlighted the government’s plans to further stimulate the online and offline environment as well as transform physical stores and explore new business models in China.

The council encouraged “physical stores to cultivate new online-offline links, such as exhibiting and selling products online while improving offline services such as delivery, to optimise the consumption chain.”

According to the WFA study, marketers surveyed felt that the most effective techniques for leveraging O2O sales were mobile loyalty, in-store gift redemptions, and trial coupon redemptions.

However, respondents recognise that they need to develop their expertise. Most respondents described their technical sophistication with O2O as low (32 per cent) or middle level (52 per cent).

One of the major internal challenges for adopting O2O was “internal silos”, as 74 per cent of respondents identified a lack of integration between departments as a key barrier.

Nearly seven out of 10 respondents said the major external barrier was the readiness of retail infrastructure to integrate mobile payments or enable coupon redemption. 

“If stores do not carry the mobile connected technology required to make O2O work, even the best O2O techniques will struggle to get off the ground,” said Matt Green, senior global marketing manager with the WFA.

In addition, closer and faster collaboration between retailers, marketers and companies such as Baidu, Alibaba and Tencent is needed. Sixty-four per cent of respondents said they need to rely on multiple partners working together, and 56 per cent said they need a mobile agency or specialist. 

“Clients don’t feel that creative or media agencies can help them,” said Mehta. “If I was an agency head right now, I’d be really thinking about that.”

 

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