What's a Computer? How M-Commerce Triumphed in China

    It's difficult to understate how pervasive and essential smartphones are to Chinese millennials, a fact with major implications for luxury brands.
    It's difficult to understate how pervasive and essential smartphones are to Chinese millennials, a fact with major implications for luxury brands. Photo: Shutterstock
    Huixin DengAuthor
      Published   in Technology

    Desktop and laptop computer ownership is declining in China, while smartphone use has neared total saturation among the younger generation. Ninety-four percent of 18-34 year olds now access the Internet on a smartphone, according to Pew Research. Luxury brands, many of whom were slow to embrace e-commerce, should quickly establish themselves in m-commerce (commerce conducted using mobile-phones), said Chloe Reuter, founder of Reuter Communications and web platform The Luxury Conversation on Tuesday.

    "China is a cashless society," Reuter said. "All you need is a battery and a mobile phone, and you can basically get everything through WeChat."

    WeChat is Dominant in the m-Commerce Space#

    As commerce in China increases shifts towards mobile-first, Western luxury brands who want to capture the attention of Chinese millennials need to take advantage of WeChat, the most popular social network app in China, Reuter emphasized.

    In recent years, consumers have begun relying less on friends and more on search and social media (particularly WeChat) to identify the latest luxury fashion trends, according to the HSBC report China: Anatomy of the Consumer. WeChat remains the top source Chinese consumers use to access information on luxury fashion trends.

    Chinese buyers made up 32 percent of the luxury goods market in 2017, according to Bain & Company, with WeChat's 963 million user base growing 19.5 percent from 2016 to 2017, and WeChat pay seeing more than 600 million monthly transactions in 2017.

    Making m-Commerce Part of the Retail Experience#

    "[Chinese] millennials today are very different from their parents' generation. They are very open to the West and are now savvier than their Western counterparts," said Richard Chen, a Chinese venture capitalist and CEO of Yifei Investment Holdings.

    For example, they know how to find the cheapest luxury purchase deals online and figure out the best way to avoid shipping costs, Chen added. But being new is not enough. Young Chinese people have grown up with new things every day, so the best way for luxury brands to attract Chinese millennial customers is to offer them an m-commerce service that provides "seamless integration of online and offline shopping powered by data and targeted services," he explained.

    "I think every luxury retail store should be a showroom," Chen said. "It should look very beautiful, like those in the fashion shows. When a customer finds something worth buying, he or she can then go online and shop it."

    Content Strategies Need M-Commerce Integration#

    Ninety-five percent of Chinese millennials had not bought print media in the past year, according to a survey Reuter Communications conducted last November in Beijing and Shanghai. Meanwhile, 100 percent had used WeChat in the past year.

    When creating original content, for instance by collaborating with KOLs, brands need to consider how m-commerce is integrated.

    "If a Chinese Millennial reads about your brand in a WeChat article, they will expect to make one tap and by it," Reuter said. "If your product is not on [a digital platform like] Tmall or, then it may as well not exist."

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