For RF|Binder’s latest Hour to Empower, we had the opportunity to learn from Nick Young, an entrepreneur with over 12 years of experience working at the intersection of technology and design in China. RF|Binder hosts Hour to Empower sessions on a quarterly basis, bringing in a diverse mix of speakers and thought leaders to inspire reflection, strike up meaningful conversations with our colleagues, and drive impact for our clients.
The recent passing of Former Chinese President Jiang Zeminhas prompted the world to reflect on China’s role in the global economy – and how it was not too long ago that the country entered the main stage. As quickly as trade and manufacturing became powerhouses in China, so has its digital marketplace in the last decade. Because of this rapid transformation, it’s hard for people in China to imagine a world before smart phones and their culture is largely digital as a result.
RF|Binder hosted our quarterly Hour to Empower session with Nick Young, an entrepreneur with over 12 years of experience working in China at the intersection of technology and design. He is a Managing Partner at The Perspective, an advisory that helps business leaders implement digital transformation in their companies. Nick is an expert on how e-commerce is evolving and the role AI (and the metaverse) is playing in building and transforming brands.
He broke down digital retail business models and how people interact with brands, highlighting what we can learn from the digital marketplace in China and Asia more broadly.
The consumer-brand relationship in the Chinese digital marketplace
For every app we have here in the U.S., China has a version of it – one that is often more intuitive and efficient. Through Super Apps, people experience the entire customer journey without having to use another browser, app, or device.
For example, someone on WeChat can be targeted by a brand, have a direct conversation with a representative, and make a purchase through a seamless experience that feels more personal and convenient. This is an example of “conversation commerce”, allowing consumers to opt-in to direct messaging from brands via SMS. Perfect Diary does this well, creating billions in revenue selling makeup through a mobilized salesforce selling the brand through messaging.
Another huge revenue driver in China is live shopping through platforms like Alibaba’s Taobao Live. According to McKinsey, live shopping was a $171 billion market in 2020, with projections that it will become a $25 billion industry in the US by 2023 through TikTok, Popshop Live, and Whatnot. Live commerce accelerates conversion and improves brand appeal. Of course, it is also profitable for influencers – or KOLs (key opinion leaders) in China – like the “Lipstick King” Austin Li who once sold 15,000 lipsticks in five minutes.
As advertising becomes more expensive, conversation commerce and live shopping allow brands to reach their audience with less spend. The digital marketplace has also challenged brands to rethink their in-person customer experiences that are made for organic social media sharing, encouraging people to engage with the brand with less advertising power.
Brands and advertisers must pay attention to the Chinese and broader Asian digital marketplace and learn the intricacies of these brand relationships to not only breakthrough in the region but fight for consumers’ attention online across global markets.