The COVID-19 pandemic forced many changes in how people live, work and consume. The traditional nine-to-five, office-based work model changed, and many millions of Chinese workers had to adapt and work from home. How they buy goods and services changed at the same time, with consumers shifting from physical stores to e-commerce and online deliveries in huge numbers, practically overnight. People were not able to go shopping in the mall or the high street like previously. The Internet provided a lifeline.
In China, overall online penetration increased by as much as 20%. The year 2020 saw total online consumer retail sales in China increase by 14.8%, and March 2021 saw retail sales of goods reach 3,197.4 billion yuan, up 29.9% on the previous year. These figures underlined Chinese consumers’ reliance on online shopping. It also underlines the need for companies to deliver a great experience to their customers: research by CCW has found that 47% of companies plan to improve the digital side of their customer experience (CX), but that only 21% of companies have successfully achieved this.
Addressing a growing trend
The digitally-enabled food delivery market is an example of the burgeoning CX that has become essential in China. It gives customers who are confined to their homes an experience that will keep them happy and loyal. There have been examples of major success stories in China: Meituan, an online food delivery service, saw orders increase by 300% in early 2020, while 55% of Chinese consumers said they would permanently shift to online grocery shopping. Consumers over the age of 45 trying e-commerce for the first time increased by 27%. What has become clear is that with consumers relying more than ever on digital or remote models, we need to keep on enhancing the digital experience they receive. Research by Adobe found that 97% of business leaders believe CX management is essential to create loyal and long-lasting customer relationships. This will be more important than ever during the recovery from COVID-19.
A changing market, a changing consumer
In China, COVID-19 may have accelerated the drive towards digital behavior, but Chinese consumers were already shifting heavily that way before the pandemic. In 2020, around one quarter of China’s retail sales were conducted online, and 48% of Chinese shoppers are forecast to spend more on experience in the future, considerably higher than the global average.
China’s e-commerce sales are now triple that of the U.S. in terms of volume, and research by EY has found that 24% of Chinese consumers will shop for luxury items principally using online retailers. Chinese consumers are changing how they shop as well. Previously, the majority of Chinese consumers might shop at Alibaba, JD.com or Taobao. Today, that has shifted, and many will do their purchasing via social networks or through WeChat or other OTT apps, and it’s likely we’ll continue to see growth in this area of social commerce.
The personalization factor
With this in mind, Chinese retailers and companies in general need to ensure they pay sufficient attention to the digital customer experience. Consumers expect higher levels of personalization than ever, and if your company doesn’t give it to them, they will buy from someone else. According to Salesforce, 76% of shoppers now expect companies to understand their needs and expectations; 84% say being treated as an individual rather than just a number is very important to winning their business. A further 59% of shoppers say tailored engagement based on their past interactions is very important to winning their business.
But it is not enough to just put digital solutions in place to communicate with customers. You must deploy data analytics tools to leverage customer data and understand them in depth. Digital tools like artificial intelligence (AI) are essential to helping you create memorable engagements and an experience that keeps customers satisfied and coming back to buy from you again.
In addition to AI, your customers’ experience will be driven by virtual and augmented reality (VR/AR), robotics, blockchain and Internet of Things (IoT) solutions. VR and AR, for example, enhance CX by enabling a new advance in “try before you buy.” Shoppers no longer need to visit a physical store to test out a new product or need to actually make an online purchase or take delivery of a product, only to realize it doesn’t fit in their home. VR and AR let consumers try out and test products in virtual simulations and get a real-world experience of using the product. Alibaba introduced this a few years ago, and the company saw a marked spike in sales. Chinese retail companies have told EY that 68% of them are prioritizing new investments in these types of new digital technologies.
As a global network-native digital service provider, Orange Business Services is perfectly positioned to provide enterprises with the digital solutions needed to deliver best-in-class customer digital experience. We work with market-leading partners to build a high-quality digital experience platform for customers and employees, and we have the world's largest voice/data network to support that approach. We’re the ideal partner for Chinese companies that know they need to provide world-class CX to keep customers satisfied and coming back for more.
Digital tools are essential for creating memorable interactions that deliver what your customers expect. Salesforce reports that 84% of customers say the experience a company gives them is as important as its products and services. Further, 80% of customers say they are more likely to buy from a company that gives them personalized experiences. Chinese companies are recognizing that this is the route to competitive advantage and business success and are getting on board.
Read more about customer experience and how Orange can help you engage with your customers on their terms.