The digital playground - what´s next?
By Line Heidenheim Juul
Would you purchase a “virtual” Gucci dress for almost USD 10.000? Or perhaps you would buy a Maserati via live stream? Someone already did. In the coming year with Covid-19 still roaming the global order we are bound to see the acceleration of more ingenuity and innovation in digital trends. China is already a playground for digital experimentation that happen sometimes years before they hit our shores. Check out a few trends here, they could be next in your market.
NO. 1: Live streaming
Could you imagine buying a car online via live stream? Or maybe pay for a guide taking you on a virtual tour in the Forbidden City? That is what is happening these days. While COVID-19 shut down much of the world and consumers flocked to online entertainment, many ecommerce platforms started experimenting with live streaming. In China, this has been evolving for the past five years, and on last year’s Single’s day, sales from livestream made up 10% of all revenue. Social media platforms like TikTok (Douyin), Kuaishou and Bilibili have quickly enabled one-click shopping by collaborating with for example, Taobao live. The market for livestreaming has already matured, and luxury brands are already there, while even CEO’s from major companies like C-trip, Alibaba and Gree are active, dressing up and playing along for specialized streaming PR- and sales activities on livestream. Most noteworthy, one of the most famous livestream stars in China, Viya, managed to sell rocket launches for USD 5.6 million via livestream -check that out right here. Accelerated by Covid-19, many traditional industries like travel, automotive and real estate made their first attempts into this method of reaching consumers attention.
There is no doubt that the potential for livestreaming in Europe is great still, and few have already tried. For inspiration to how to integrate the user experience, employ gamification and design connections to consumers, take a look at examples from China where anyone from small vendors, big brands and influencers have been experimenting the last couple of years.
No. 2: Gamification
Gamification and influence on consumer behavior is not news in China, however it keeps evolving. One of the most integrated examples of how gamification is fueling data and changing consumer behavior is Alibaba owned Alipays AntForest game. Alipay is the main mobile-payment service in China sitting on 95% of the mobile payments with Tencents Wechat. Alipay launched AntForest, a mini game inside the payment platform, in 2016. It gives users green Co2 points based on actual physical behavior and shopping behavior. The further you walk in a day or the more bike rikes you take, the more points you can collect. Throughout the day the app will nudge you sending you notifications. Once you have enough points you can donate these to plan an actual tree or to somehow protect nature. You collect badges and can share with or compete with friends and monitor brands’ activities – all inside the Alipay app. Other examples are from the recent Singles Day, China’s and the world’s largest shopping festival. Alibaba launched a virtual cat that existed inside the Taobao/Tmall app. Users could interact and take care of the cat and collect coins based on this behavior, that could in turn be traded in for discounts. Both examples use gamification to retain the users on the platform, collecting data and understanding their behavior.
No. 3: Social Shopping
The high integration of social-media and click-now-buy-now is considered normal in China by now. In the early days, merchants were selling directly on Wechat, the largest social media in China. Following this, TikTok is to a wide extent one of the first movers collaborating with Taobao live to integrate video and shopping. But there are also platforms that are specifically focusing on e-commerce + social. Without any fanfare one of those platforms using both gamification and social- elements of shopping has risen to become among the biggest e-commerce platforms in the world and in China. You may have heard of PinDuoDuo, a five-year old company with more than 700 million users and valued more than 100 billion UDS. The platform is based on a consumer2merchant model and emphasizes group shopping enticing the consumer to invite his or her social network to buy together to drive down the price and gain discounts. In turn PinDuoDuo leverages the data collected to help the entire upstream supply chain, so that merchants may produce according to demand rather than producing with waste and overcapacity. The data and analysis of consumer behavior on the platform is instrumental in the model, according to PinDuoDuo themselves.
It grew rapidly focusing on lower tier/lower income areas of China, but has spent the past year to recruit higher quality brands and goods on its platform trying to eat into competitor Tmall and JD.com. The thought of selling Gucci in groups is far off though, and the product categories were social shopping is most popular is still fast-moving-consumer-goods such as fresh fruit and vegetables.
Social shopping was around before PinDuoDuo, when merchants were leveraging the power of Wechat, a instant-message platform turned most dominant social media, ecomm-platofrm and payment-app.
No. 4: QR Codes
QR Codes made their entry from the mid-nineties when they were originally invented to trace carparts. In the 2000’s their mainstream debut was not well received, and in many Western countries it seems it emerged too early. That is not true for China, as well as other developing countries, who have made a tiger leap from cash to cashless societies, while simultaneously growing from a few million internet users to today with 940 million internet uses, who are largely “all mobile all the time”. QR codes are widely used in mobile payments, in search and in advertisements. The QR codes are for example put on food packaging, to allow users to see the supply chain of their foods or groceries. They are also put on pets or even elderly loved ones, in order to be able to identify them, if they get lost. In advertising the QR codes are integrated in billboards or in TV adds making it easy for the target audience to click and scan. Similarly it is great in order to link from a physical poster to online photo galleries – such as for real estate, projects or even resumées. In restaurants customers can scan a code on the table to browse the menu, put in their order and pay directly. Ah, all human contact avoided, until the waiter bring you your food. (And even that is done in a few places by robots).
Since February this year QR codes were also the centre of the so-called health codes, a kind of virtual, domestic passport, that has enabled mobility in China. Read more about that here.
Snapchats CEO has said that their use of QR codes were inspired by a trip to China, where they saw Tencent´s dominant social media, Wechat, using QR codes. Now even most new phones integrate a QR scanner on the factory settings, further indicating that adoption of QR codes will increase outside of China as well. Its worth considering if QR codes are useful in your industry?
No. 5: Virtual influencers
Could China be the testing ground for the next generation of virtual influencers? Virtual influencers is not entirely a new concept, with virtually created influencers such as Lil Miquel surfacing back in 2017 and predated by similar icons from Japans Manga culture, dating back to the nineties even. However, in China it started with a virtual musician, sculpted on Japan’s manga culture, and of the 40 or so virtual celebrities, Luo Tianyi is by far the most famous. Her concerts still sell out and she is already a spokesperson for Pizza Hut, KFC, and other brands. Similarly, a virtually created 18-year-old model, Noonoouri, who “lives” in Paris, was signed last year by Gucci as their first virtual model. Similarly, the rising makeup brand, Perfect Diary, also launched their own virtual spokesperson, who the most popular social media, WeChat, to offer tips and tricks on makeup in private groups. Tmall, Alibaba’s brand mall online, also created their own virtual influencer, Aimeé, who starred in both Single’s day shopping festival and the Shanghai Fashion week, that went all online in 2020. This year, the first artificial intelligence influencer named Ling was created by Beijing Cishi Culture Media Company and start up Xmov Information Technology. There was even a virtual idol on the Netflix-like iQiyi, where real human judges were crowning the next big virtual star.
The upside for brands to use virtual influencers are many, as these create a more cost-efficient and stabile choice compared to the issues that can arise when dealing with people, who have real life issues. The industry for virtual idols is estimated to be less than 100 million yuan, but expected to grow to 1.5 billion yuan by 2021. The question is if these virtual influencers will become a more popular choice for brands beyond China? Several China watchers covered the topic, and for a deep dive into it, head over to our friends at Radii here.
No. 6: Avatars and digital assets
Online avatars have been around for many years, but now evolving so that brands or celebrities can turn these into actual digital assets. As with several trends avatars started in the gaming industry. Last year, a south Korean app that created life-like avatars in the users own image exploded in China. But the avatar trend has already flowed into fashion, and luxury brands targeting millennial customers like Gucci started a few years ago to design virtual versions of its latest collections for a fashion-focused video game and sport wear for an online tennis game. Other brands like Hermes, LV and Esteé Lauder followed, designing own games and clothing players. Since then, Gucci has started designing clothes for millennial avatars specifically even outside of games, and in a surprising example they sold a virtual dress for USD 9.500. This year they also launched a platform where users could design their own sneakers and try them on via augmented reality.
But avatars also go beyond customers in the luxury market. Last month, Tencent Music invested in Wave, a company that produce virtual concerts. Their technology enable celebrities to create avatars in their image, who can perform on their virtual stage. They have already held more than 50 concerts and claim that the format is gaining traction.
These digital trends are already evolving in and outside China, and with Covid-19 still hanging in the air, there is bound to be more creativity coming out in digital formats, whether they be extensions of physical products and experiences or entirely born digital, China is a digital playground to watch and may show case what is next in your market.
If you are curious for more about this, get in touch with us at China Experience. We customize webinars, conferences and digital insights with news and inspiration directly from China.
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