One New Year’s resolution all brands should make: don’t sleep on China. Home to the world’s most valuable tech startup, an e-commerce festival worth more than Cyber Monday and Black Friday combined, and a population that makes one-third of the world’s luxury purchases, China is a powerhouse that makes or breaks brands’ global growth. With economic uncertainty on the horizon due to the trade war and slowdown indicators, brands previously coasting on China’s growth will have to become more operationally focused on their digital strategy in the coming year. Based on Gartner L2’s China research throughout the year, here are five key areas to follow when it comes social media, search, and e-commerce in 2019:
The New Search Engines
Search isn’t just about Baidu in China anymore. According to data from Gartner L2’s Luxury China and Beauty China 2018 reports, search results on Baidu are in decline for brands. Meanwhile, search features are being ramped up on WeChat, while Alibaba’s Tmall has emerged as a first-order search destination for products. While this search habit shift toward Alibaba will be particularly challenging for luxury brands that don’t have Tmall stores, WeChat search could be an area of focus if its own search section emerges as a proven traffic driver. Brands have already started to invest in sponsored search brand zones on WeChat featuring multimedia and links to e-commerce and mini programs.
Little Red Book = Big Consumer Influence
Social shopping platform RED has emerged as a go-to lifestyle and influencer platform where celebrities (including Kim Kardashian) are sharing their beauty routines and brands are launching official shops. Gartner L2’s new China: Mobile Disruptors Insight Report finds that over 41% of beauty brands now have official shops on the app, making it an especially important force to watch in China’s beauty industry for the year to come.
Alibaba Goes Social
Alibaba has kept a close eye on RED and WeChat’s emergence as platforms for influencer content and e-commerce. Alibaba’s e-commerce platforms are increasingly featuring influencer posts and social features on brand and product pages, and Taobao has now integrated product reviews from RED influencers on brands’ official product pages. Expect more development in this area in the year to come.
Social Embraces E-Commerce
As the lines between social and commerce are now blurred in China, the pace of monetization for social startups is rapidly increasing as popular platforms come out of the gate with social commerce. Douyin, China’s most popular new app, launched links to commerce this year, taking less than two years since its founding to dive into e-commerce. Douyin also now offers the opportunity to launch pop-up shops with purchases directly through the app. This enthusiasm for e-commerce among social startups means both competition and promotion for the major e-commerce platforms, and brands may have to set up shop in multiple places.
Chinese Platforms Go Global
Google and Facebook may be blocked in China (not for lack of trying to get in the market), but Chinese tech companies have no similar censorship obstacles when it comes to expanding abroad. Not only is Douyin a top app in China, its international version TikTok has risen to become one of the most popular new apps globally—the two versions combined now have 500 million users. Chinese payment methods Alipay and WeChat Pay continue their expansion into stores across the world, which is only one part of ambitious global expansion plans underway by both Alibaba and Tencent.