e-commerce in China is considered one of the most developed within the digital ecosystem, despite its highly complex and competitive nature. E-commerce giants, such as TMall and J.D. play a significant role in this network by shaping consumer trends; whilst multiple industry wide O2O platforms and retailers compete for market share. In the recent years, consumer purchasing trends have shifted drastically; and new platforms, like, TikTok/Douyin have disrupted the e-commerce landscape.
TikTok, a short-form video sharing platform, has recently ventured into the e-commerce space, pivoting, and reinventing itself from its original social media framework. The stream of content that users receive is based on their common viewing interests based on TikTok’s unique algorithm, meaning that consumers’ modus operandi has shifted over the past few months from active searches to passive recommendations.
This consumer shift has rendered the traditional KOL-TV shopping model obsolete, calling for a new set of investment direction from brands. Content on TikTok initially redirected viewers to external B2C platforms for extra information, which TMall and J.D originally used as their primary marketing strategy. Nowadays, TikTok has transformed into a direct sales platform for these B2C companies to avoid the extra click-step for consumers. Other e-commerce companies, like Red and Blibli are also making similar moves on these platforms to directly showcase their products in a more efficient manner. Brands will also need to ensure they are able to match an appropriate image on the platform to target the right audience.
The new e-commerce
Brands are now turning towards creating a mix of daily short-videos and livestreams within their own social e-commerce platforms to diversify their marketing. As opposed to traditional out-of-home ads, where brands are limited to the number of products advertised, e-commerce platforms are now able to effectively use social media to quickly showcase a multitude of different products to attract a wider audience.
The employment of short videos for brands has become key in the Chinese e-commerce market as a tool to generate organic views, accurately identify a targeted consumer audience, and decrease advertising costs. Social media platforms, like TikTok, can enhance brands’ reach by initially sending these videos to a set number of users; and once the video garners interest, more people will be reached. This is an effective way to promote businesses and increase sales as these videos and livestreams can provide a direct link to products.
Pushing boundaries for brands
On the other hand, new marketing integration does not come without its own issues; and the formatting of content itself is different from traditional methods, eg. video optimisation and output orientation; challenging brands to be flexible and spontaneous regarding user input. Brands also need to take a further step in their marketing approach, where the interactivity of livestream sales pushes marketers to adapt to a high demand of consumers in one go compared to traditional ads. Livestreams can generate several million (¥) sales within a few minutes, which makes the coordination between marketing and sales teams essential.
Ensuring success in China’s new e-commerce market
Digital marketing and e-commerce agencies such as PLTFRM Shanghai combat these issues by integrating several live broadcasting rooms within its office for brands to utilize, allowing immediate communication between marketing and sales. They help brands through the integration of live AR and 3D motion capture in video production, developing content ideation, and providing marketing strategies to strengthen customer relations. With their experience in working with multitude of brands within FMCG, F&B, Cosmetics & luxury, etc, agencies can adapt and bring new ideas for future projects.
How can brands stand out in the new environment? New content needs to be fresh and relevant; and the shift from traditional ads means that brands need to change the way they engage with their audience. With high levels of consumer demand, it’s essential that brands understand the landscape that they’re operating in, and work closely with agencies who can streamline marketing strategy and maintain consumer needs efficiently to increase business sales and ROI.