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An American view of China's online shopping boom

June 27, 2015 04:42 PM

Spend some time with Chinese consumers and you quickly realize how different their shopping habits are compared with those of Westerners. As an American who has been living in China for more than 10 years, I’ve come to realize just how essential e-commerce has become to my fellow Shanghainese. I ask my friends where they found those cute shoes, or that imported ingredient, and the answer is always the same: “I found it online.”

Whereas in America and other countries e-commerce is primarily a means to an end, for a growing number of Chinese people, online shopping has become part of a lifestyle that defines how they see themselves. And for me, surfing Taobao, China’s largest C2C marketplace, has become a routine activity that allows me to stock up on essentials, as well as hard-to-find reminders of home for my growing family. Here are four of my personal observations on why people have adopted Taobao as part of their daily lives:

Personalization. It’s not just the changing graphics on Taobao’s front page, reminiscent of Google Doodles. Frequent Taobao users find that their shopping experiences seem to be tailored to their needs. That’s no coincidence. Ding Xi, director of Taobao Marketplace’s user experience department, says that cultivating a “personality” is an important feature of Taobao’s platform. With so many more users on Taobao than on sites like Amazon, Ding says his department “can analyze consumer behavior and understand its customers in a much more extensive way,” which allows the site to configure itself to suit individual shoppers. From login, the site uses extensive data to select ads, products and Taobao shops according to profiles developed for users so that each finds what they are looking for faster.

Mobile Commerce.  Some 300 million mobile shopping users (that’s almost the entire population of the U.S.) spent more than $1.6 trillion on online purchases in China last year, according to China e-commerce market analyst Enfodesk.  Currently nearly one out of every two online shopping transactions are done on mobile devices in China and that number is growing fast as it becomes increasingly convenient to browse and pay for goods using smartphones. Jessie Chen, a young Shanghai professional, says she uses Taobao on both computer and mobile, but adds that the mobile platform is well suited to her needs when she’s away from her desk. “When I check my package delivery status, or when I'm out, I usually check on mobile,” Chen says. Partnerships between offline retailers like Walmart and e-payments provider Alipay is even making it possible to use phones to pay for purchases in physical stores.

Person to Person.  Chinese culture places a high value on guanxi, or personal connections, and you can experience that firsthand on Taobao.  The site’s Aliwangwang instant messenger is a heavily used feature that allows shoppers and sellers to communicate through real time chats before and after purchases. Because of mobile integration, response time is fast and conversations can go beyond the constraints of 9-5 business hours. Recent university graduate Yashan Zhao says Aliwangwang is as much a social tool as it is a business tool. “Chatting or flirting with the sellers and customers service is great fun,” she says. Interactions can be strangely intimate. Many sellers address their potential customers as “dear” which contributes to a more personal atmosphere. And to make sure both customer and seller are satisfied, payment is made through Alipay, which guarantees that no money changes hands unless both parties are happy.

Taobao shoppers take it a step further, crowdsourcing information through buyer reviews. Reviews frequently feature detailed comments that include multiple photos and information about how the package arrived, how well the product matched the photos in the product description, and whether sizes fit well. “I will usually check the buyers' comments first before I buy anything on Taobao,” says 20-something online shopper Pan Hu. “My friend's opinion will be a key reason for me to buy it or not.”

Window Shopping. Surfing around on Taobao can reveal items for sale that you’d never see on sites like Amazon or eBay. With products and services available from cars and airplanes to dog walkers to farm fresh produce, shopping on Taobao can be pure entertainment. “Besides the things I need, there are a lot of things in Taobao that are creative,” says Pan. “It's always fun to dig around. There might be surprises.”

Many Chinese online shoppers like to browse to see what is popular instead of just searching out the products they want. Because of the depth of product offerings, shoppers also use Taobao and sister shopping site Tmall.com to compare prices with retail shops. The sites’ vertical integration functions like a vast online mall, with shoppers able to efficiently choose between bargain goods and brand-name products.

Singles' Day. Chinese shoppers are savvy shoppers, and always looking for a great sale. The U.S. may have Black Friday and Cyber Monday, but Chinese shoppers rush to shop online on Singles Day, November 11. In 2009, Alibaba took a uniquely Chinese creation, Singles Day, and turned it into the biggest e-commerce sales day in the world. It doesn’t matter whether they’re single or not, Chinese shoppers have embraced the “holiday,” planning their shopping lists and waiting to splurge on half-off sales that many Taobao shops hold on the day. Last year, Alibaba posted sales of a record $9.3 billion. A month later, a Double 12 (December 12) promotion on Taobao gives shoppers a second chance to grab bargains.

Rebecca Kanthor is a freelance writer and mom living in Shanghai. This article was originally published on Alizila, Alibaba Group's news blog.

 

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