INDUSTRIAL NEWS AND ANNOUNCEMENTS

This means that e-commerce will account for 42 percent of growth in private consumption. By then, Chinas online consumer market will have grown to $1.6 trillion annually.

Mobile e-commerce currently accounts for 51 percent of all online sales in China and will grow even faster. The global average is 35 percent. Chinese households buy 15 percent of their small appliances, 16 percent of their apparel and household sundries, and 19 percent of their skincare and cosmetic products through mobile devices.

Brands are important to Chinese consumers for ensuring safety and quality, and smaller brands can compete

He Chunlei, CEO of Tmall Fresh of Alibaba Group, noted during PMA’s Fresh Connections China 2017, Chinese consumers tend to spend more on higher-priced products and value brands that deliver safe, reliable, and quality foods. E-commerce permits brands easier access to consumers without the usual barriers of distribution challenges, and as a result Tmall Fresh allows even small brands to compete in the marketplace and reach a massive audience.

Smaller brands now find themselves on equal footing with large brands, unrestricted by many barriers to entry and route-to-market obstacles they often encounter in the offline world, according to Bain & Company. As a result, they’re growing quickly online, and leveraging lower-cost channels, like product reviews, for communication and branding. This has served as a wake-up call for bigger brands, who are watching advances in sales and influence among smaller brands. Regional and pure-play online brands grew by 74 percent, and lesser-known brands grew by 69 percent— surpassing the 53 percent gains made by top brands. Top brands still dominate in highly standardized categories like consumer electronics, where they control a 70 percent share of online sales. However, smaller brands claim a higher share in more personalized categories.

How fresh produce suppliers can begin to build brands for the Chinese market

Tell your story

At PMA Fresh Connections China, George Liu, CEO of Frutacloud, explained that compared to the traditional way of shopping preferred by the old generation, which focuses more on the appearance of goods and buying on impulse, the younger generation of online shoppers are able to make their choices based on an array of information, which means it is critical for brands to get their message across to consumers, such as creative stories about brand history, the uniqueness of their products, and even the brand’s Chinese name and logo design.

Leverage social media and key opinion leaders to develop your e-brand.

 Social media is an important key in the development of a brand. Its sometimes easiest, and cheapest, way to broadcast messages to the large group of people.

New ways of marketing, such as WeChat campaigns and live broadcasting of KOLs (key opinion leaders), have become more popular in China, Liu said, adding that it is quite easy for audiences to watch broadcasts on their cellphones, making it an effective marketing method to get an audiences’attention.

Leverage consumer data to co-create 

Among the biggest changes in China e-commerce is the emergence of the new model of co-creation between brands and consumers, according to Bain & Company. Online shoppers want a greater sense of participation, achievement and affiliation through their consumption. On the one hand, they actively engage in writing and reading product reviews. According to iResearch, more than 70% of consumers give comments or scores after shopping online and as many as 90% of consumers read product reviews before shopping. On the other hand, online purchasing is no longer anonymous, as it often is with offline purchases. The entire e-commerce process—from researching a product to browsing to commenting to selection to purchase—is recorded to track consumers’ shopping behavior across categories, time and platforms. It all helps sellers paint a full picture of an individual consumer, creating the opportunity for in-depth, individualized and invaluable consumer insights.

Online complements offline – brand for both channels 

While it is true that online is quickly penetrating across categories, starting from apparel and baby products to FMCGs or even fresh groceries, for most of the categories, consumers still do much of their buying in physical retail stores. In fact, Chinese consumers are true omnichannel shoppers. According to our research, for example, 16 percent of Chinese households use both online and physical retail channels to purchase packaged foods and beverages, while 28 percent do so to buy skincare products and 39 percent do so for apparel, according to Bain & Company.

Consumers still like to go out and shop, but the role of the offline physical store is evolving. The main focus of offline shopping now is less about buying products, and more about enjoying the overall experiences, having fun with friends and families and interacting with the brands and products (e.g., trying out new models, etc.).

Huang Ying, Category Manager of Fresh Fruit & Vegetables, City Super Shanghai Ltd., said during PMA’s Fresh Connections China 2017 that branding is also crucial in China’s small and specialty retail stores. 

“As a specialty supermarket, City Super brings in only the best products from around the world, and focuses on differentiated goods and services that help our accurately targeted consumers enjoy a creative shopping experience and improve living standards,” Huang said.