Single entry points
As discussed, China’s digital giants have created sophisticated ecommerce ecosystems that offer a range of services, from social networking to logistics, and enable independent brands to leverage the ecosystem’s infrastructure to market their products and services to customers. For example, Alipay, a mobile, online payment platform by Alibaba that’s installed on almost every mobile device in the country, integrates the offerings of companies from Alibaba’s huge retail network and enables consumers to pay for virtually any product or service. Tencent’s WeChat Pay works similarly; its deep integration with external platforms makes transactions for consumers easier than ever. Sub-applications within the WeChat ecosystem allow brands to showcase their products and services within virtual stores all the while taking advantage of a huge user base, data tracking, analytics, and task management tools. Following Tencent’s success in implementing such sub-applications, other super apps followed suit and adopted a similar approach to ecosystem expansion.
Although TMall accounts for 64% of China’s total B2C ecommerce market (followed by JD with a 26% share), other players such as VIP.com, Xiaohongshu (RED), and Ymatou are catching up with specialized platforms. The key to them all, however, is that, besides ecommerce, these platforms provide many other services and, even more important, access to a community of like-minded individuals.
Streaming services have dramatically altered the recommendations dynamic and shifted from passive algorithms to proactive recommendations, so consumers no longer have to search for desired products, but are offered them on the fly instead. By leveraging AI-driven deep learning and natural language processing algorithms, platforms communicate consumer interest to retailers so the latter can keep up with the demand. The Chinese have also been better at managing partner networks, opting to build a partner ecosystem instead of trying to build something in-house, which allowed retailers to quickly scale up and expand their offerings at double speed.
So, this is something to borrow from the Chinese innovators – a skillful and proactive approach to building and scaling ecosystems while leveraging innovative technology solutions such as AI and ML.