5. 1. Digital marketing and E-Commerce are converging in
China, turning sales channels into branding ones.
http://v.youku.com/v_show/id_XNzI4NjkwODU2.html
…as in many longer-standing e-commerce markets,
they are also developing brand awareness, an
increasing proclivity to purchase high quality and/or
individually satisfying products, and showing a
commitment to brand loyalty and repeat business…
- KPMG’s China 360 report: E-commerce in China:
Driving a new consumer culture, 14 Jan 2014.
“…we cannot overemphasize the importance of
online shopping for brands in China,” said Tony
Chen, Chief Digital Officer GroupM China. “The
top e-commerce sites are no longer mere sales
channels, but media in their own right, with
hundreds of millions of visitors ripe for brand
communication.” - Group M
http://www.wpp.com/wpp/press/2014/jun/20/
groupm-charts-china-e-commerce-frenzy/
6. 2. Online domestic consumption drive online purchases like
travel, ignoring the declining Chinese traditional economy
These are news headlines that came out the week after China’s stock market issues.An economy in crisis?
7. 2. Online domestic consumption drive online purchases like
travel, ignoring the declining Chinese traditional economy
8. 2. Online domestic consumption drive online purchases like
travel, ignoring the declining Chinese traditional economy
Online retail sales has vast growth
potential as it only accounts for 10%
of all retail sales in 2015’s 1st quarter
9. 3. Digital has divided China’s economy into a declining
traditional retail and manufacturing economy that exists
along side a thriving service-based retail economy
Nicholas Lardy, senior fellow at the Peterson Institute for International
Economics, who observed that a focus on weaknesses in China's industrial
sector missed the bigger picture… that the service sector has been the
biggest driver of China's economic growth for the last three years as
households spent on entertainment, travel, health and education.
As one of the encouraging results of economic restructuring, the services
sector increased 8.4 percent in the first half of 2015 and accounted for
49.5 percent of China's GDP.
http://news.xinhuanet.com/english/2015-08/28/c_134562999.htm
"People are still spending but they are more careful about how they spend,
with more focus on features and functions, after-sales support and how
products fit in their life," according to Ben Cavender, an analyst at China
Market Research Group in Shanghai.
10. 3. Digital is creating a situation where traditional FMCG sales
are dropping while online FMCG sales are rocketing
11. 4. Local brands’ grasp of ecommerce and alternative offline
channels are beating foreign brands in the retail market.
GPJ Experience Marketing proprietary and strictly confidential. Copyright reserved 2014.
Bruno Lannes, a partner with Bain & Company, talked
about why domestic brands were winning market share
from foreign brands:“An important reason is that they
[foreign brands] focus on more toptier mainland cities
and their products sell mainly through hypermarkets.”
Many Chinese consumers are not making as many trips to
the hypermarkets, instead, they are shopping their local
supermarkets, minimarts and convenience stores.
Digital and CVS channel are replacing shopping
malls and hypermarkets in China as retail outlets.
13. Iresearch estimated that in 2018, total transaction value would be RMB7.3
trillion (US$1.18 trillion) in China online shopping market.
5. Slow growth does not mean no growth, thanks to the
growing digital service and ecommerce economy
14. GPJ Experience Marketing proprietary and strictly confidential. Copyright reserved 2014.
5. Slow growth does not mean no growth, thanks to the
growing digital service and ecommerce economy
15. 6. Digital enabled retail marketing can target increasing
consumption and ecommerce in lower tier cities
Although average disposable incomes in China's Tier 3 and 4 cities are two thirds of Tier 2 and just over half of Tier 1 cities, a lower cost of living and
soaring growth is seeing many 'small town' folk get out and spend. 65% of FMCG sales come from Tier 3 or lower cities according to Euromonitor.
Consumers in lower‐tier cities aren‘t just buying everyday household groceries. Of China’s top‐10 cities by per capita GDP, seven are Tier 3 or lower. Four
of China‘s top‐10 cities for disposable income don Tier‐4 status and are mostly underserved by premium brands. － China Skinny
16. 6. Digital enabled retail marketing can target increasing
consumption and ecommerce in lower tier cities
In July 2014, the ministries of finance and commerce
chose 55 poor counties to receive 20 million yuan
each to develop their ecommerce industry in a bid
to reduce poverty. One of these counties was
Tongshan, in the central province of Hubei, which
had per capita GDP of 4,000 yuan in 2014,
compared to the national average about 46,000
yuan.
Tongshan has opened a Taobao shop to sell tickets
for its main tourist attraction, the Jiulong Mountain
scenic area. In the past, the area sold about 1,000
tickets a month, Hu said, but the online store has
pushed that figure up to 10,000.Then local hotels
got into the act, launching promotions on tourism
websites such as Ctrip.com and Lvmama.com.
However，rural retail sales in China were increasing faster than those in urban areas, at 11.6% compared to 10.4%,
reflecting disparities in income growth: per capita disposable income for rural people was up 10% in this period, while
that for urban residents rose 8.3%. - National Bureau of Statistics (NBS)
18. 8. 89% of the Chinese people uses smartphones as their key gateway!
to social media and ecommerce.!
!
19. 9. In China, social media is also mobile media - WeChat dominates
open rates on mobile. !
A branded app strategy is redundant in China. Raising brand and retail offer
visibility on WeChat and other mobile channels is the way forward!
especially in the sharing of discount and ecommerce offers.!
20. 10. Ecommerce is becoming mobile commerce!
Kantar Worldpanel: “…research found that 80 percent of
Chinese consumers who bought online in 2013 made at
least one purchase from a smartphone.”!
21. 11. WeChat is driving online-to-offline social commerce
through sharing, giveaways and loyalty card services
24. GPJ Experience Marketing proprietary and strictly confidential. Copyright reserved 2014.
Challenge:
GPJ/JUXT China identified an area in customer relationship
management for Porsche to address. How best can the brand engage
its existing drivers who have bought a Porsche already? Given the stiff
car market competition in China, every brand needs to
continually engage its current clientele to build brand loyalty during and
beyond the car purchase.
Insight:
GPJ/JUXT China identified a need-desire gap in that Porsche drivers
rely mostly on their car to get to where they need to go. So when
they send their cars for servicing with Porsche, their mobility and even
their lifestyle for the day is greatly disrupted .
Solution:
To create buzz and to thank existing Porsche customers, GPJ/JUXT
China created and launched Porsche China’s “VIP Customer Day”
integrated campaign.This was to create awareness of Porsche’s social
CRM outreach program onWeChat that allowed existing Porsche
drivers in China to book a day to send their Porsche for servicing
while they pick a specific “away-from-the-car” package from
Porsche partners such as spa, fishing, yoga promotions for that
very same day. Besides providing a service, Porsche drivers will
not waste a day with their car being serviced while enjoying the
type of lifestyle that Porsche believe they should experience.
Loyalty ecommerce program based on after-sales
Your PorscheVIP day campaign starts on the very day
you make an appointment on our customized WeChat platform
to send your Porsche for servicing and you to a day of relaxation based
on theVIP package you choose or buy on the platform:
http://youtu.be/mlE0VGKQn5c
WeChat case study: online-to-offline full year customer
service program by GPJ/JUXT Shanghai for Porsche China
25. GPJ Experience Marketing proprietary and strictly confidential. Copyright reserved 2014.
WeChat case study: Online to offline shopping marketing
and loyalty program for 55 Parkson Malls in China
“We are pleased with GPJ/
JUXT Shanghai’s efforts to
launch our online to
offline shopper marketing
campaigns using social media
and in-store event activation
for our 50+ departmental
stores in China. They did a
great job in this new area of
marketing.” – Lim Shea Lee,
Senior Manager, Marketing,
Parkson Department Stores,
China.
Christmas promotion WeChat
case study:
http://v.youku.com/v_show/
id_XOTQwOTM3NjE2.html
26. China: how digital
disruption is driven by
millennials
As the new middle class in China,
they can either make or break a brand
27.
28. GPJ Experience Marketing proprietary and strictly confidential. Copyright reserved 2015.
Millennials are the engines of emerging economies in the world!
Be it BRIC or MINT (newly coined growth markets), these economies are driven by growing middle class
driven by growing numbers of young workers who are using technology to learn, live and work. !
29. GPJ Experience Marketing proprietary and strictly confidential. Copyright reserved 2015.
Millennials are the engines of emerging economies in the world!
Millennials are the key consumer segment driving business success in new
economies, as well as old ones. Just ask Burberry. !
http://www.theguardian.com/business/2013/jun/16/angela-ahrendts-Burberry-chav-
image!
A five-year study begun in 2011 to monitor a group of
youngsters' attitudes towards and use of technology
reveals the inevitable future of the British high street
stores as collection of showrooms.
Stores in the UK have had to close down through
recession and, says Amaze, "due to massive changes
in how people use technology". !
http://www.amaze.com/news/news-items/Amaze_generation_newest_release.aspx !
30. Millennials are a group of Chinese consumers currently
missing in Western marketing planning
GPJ Experience Marketing proprietary and strictly confidential. Copyright reserved 2014.
http://www.warc.com/LatestNews/News/Western_brands_err_on_China_positioning.news?ID=33612
31. McKinsey reports that China's emerging consumer
class is more emotional than previous generations of
shoppers and firms must shift their marketing
strategies to keep pace with them i.e. 51 per cent of
city-dwellers by 2020, up from 6 per cent in 2010
http://in.reuters.com/article/2012/09/25/china-
economy-consumers-survey-
idINL5E8KP0OQ20120925
Group M China’s Dec 2013 Study also
stressed the importance of building emotional
connections with their consumers. Emotions
impact consumers differently with market
maturity. Respondents aged 15 to 64 in Tier
four cities are the most bonded with brands,
citing feel good factors such as 'make me feel
more confident and attractive'.!
McKinsey: China’s Emerging Millennial Consumer Class Are
More Emotional Than Past Generation of Consumers
GPJ Experience Marketing proprietary and strictly confidential. Copyright reserved 2014.
32. Their Millennial Social & Spending Habits are
Driving Social e-Commerce
Source: Tong Ji universityGPJ Experience Marketing proprietary and strictly confidential. Copyright reserved 2014.
33. Source: Tong Ji university
Social Content and Emotional impulse Drives Brand
Preference And Buying Decisions for Chinese Millennials
GPJ Experience Marketing proprietary and strictly confidential. Copyright reserved 2014.
34. • Adidas gained 11% of the sportswear market compared to Nike’s 12.1%
• 12% rise in fourth-quarter China sales for a 15% climb during the full year
• Nike is setting up 1000 discount stores to get rid of its inventory
• Nike + did not take off in China
Nike China did not understand how to market to millennials
GPJ Experience Marketing proprietary and strictly confidential. Copyright reserved 2014.
35. • Adidas responded to an increasingly sedentary millennial population, which happened
to be the new Middle Class in China
• It positioned sports to women with a strong social purpose i.e. a peer to peer social activity.
Retail store counters report that they
see more women walking into shop.
Anecdotally, tracking of online buzz
show "fairly positive" comments written
about the campaign, like "This is exactly
how I feel", "This encourages me to do
sport", "Sports doesn't have to be
hard", "This isn't like the brand that I
had in mind before"
Adidas China did it by creating social relevance...
GPJ Experience Marketing proprietary and strictly confidential. Copyright reserved 2014.
36. GPJ Experience Marketing proprietary and strictly confidential. Copyright reserved 2015.
1. Millennials include your new MACs from the Western
and Southern part of China i.e. lower tiers city!
Ecommerce is a better a way to target
increasing consumption in lower tier cities,
not Tier 1.!
!
NOTE: Xi Jin Ping’s ambitious 2013 to boost
consumption and personal credit access
focuses on Western Tier 3 cities with regards
to culture and entertainment.
!
37. GPJ Experience Marketing proprietary and strictly confidential. Copyright reserved 2015.
2. HENRYS and the LGBTs are the new black.!
These HENRYs — “high earners, not rich yet”
— are young Chinese professionals who
pride themselves on their individuality,
shunning flashy labels and the “secretary”
look, according to Reuters. These buyers
take their fashion cues from social media and
prefer to buy from multi-brand e-retailers,
such as Shangpin.com and Italy’s Yoox,
trendy boutiques, and high-end department
stores, including Lane Crawford and Galleries
Lafayette.!
38. GPJ Experience Marketing proprietary and strictly confidential. Copyright reserved 2014.
3. New millennial mothers drives household consumption at 3 levels.
39. GPJ Experience Marketing proprietary and strictly confidential. Copyright reserved 2014.
Digital-led retail marketing can help
brands target millennials who grew up
with technology and social media
especially millennial mothers
2. New millennial mothers drives household consumption at 3 levels.
40. Gifting helps to make your product or services more
premium in the social commerce space.!
!
Spending on gift-giving by Chinese luxury consumers
was down a further 5% in 2014, totaling 30% over two
years according to Hurun Research Institute.!
!
Consumer electronics was the gift of choice in China,
lead by Apple overtaking LV and last year’s top choice
Hermes, which dropped down to seventh. Red wine
dropped to third place in the preferred gift. Watches rose
to second place. Overall spending crept back up to the
levels of two years ago. Travel gift vouchers continued to
show a strong rise for the third year running. There is a
gifting opportunity here.!
1. Focusing on women travellers through gifting strategies
as China is the largest gifting economy in the world.
41. Travel and study overseas is the ultimate Luxury in the new borderless Chinese economy
GPJ Experience Marketing proprietary and strictly confidential. Copyright reserved 2014.
2. Appeal to rich and affluent families and youths through
education tourism packages
42. May 2015: In WeChat’s latest update this
week, a new feature allows users to
collect payment in easier way by simply
clicking on the plus icon in the main
interface.
Users who initiate the “collect payment”
feature will see a QR code which he or
she can use to show the other party to
scan and make the payment.
3. Leverage on mobile commerce to promote or test trial
offers such as what is happening on WeChat in China
43. • Wechat users scan the QR code displayed on the website on desktop computers to finish payment.
• Use Wechat payment on mobile apps.
3. Leverage on mobile commerce to promote or test trial
offers such as what is happening on WeChat in China
Current QR code driven cross border templates
in the fashion industry In the food industry
AGENCY SEE POTENTIAL UNTAPPED COMMERCE AND BRANDING OPPORTUNITIES FROM REDESIGNING
QR CODE AND BAR CODES.!
!
44. Branding and commerce opportunities!
Barcode redesign campaign:
http://v.youku.com/v_show/
id_XMTI4NTczNjkyNA==.html!
!
QR code building
http://v.youku.com/v_show/
id_XMTI4NTc0NzcwNA==.html!
!
RICE CODE REFERENCE:
http://v.youku.com/v_show/id_XNzQwMTIxNTA4.html
!
3. Leverage on mobile commerce to promote or test trial
offers such as what is happening on WeChat in China
45. GPJ Experience Marketing proprietary and strictly confidential. Copyright reserved 2014.
4. DOUBLE SCREENING: In-store /event experiences via augmented on
smartphones & wearable technology!
Burberry: https://www.youtube.com/watch?v=G9zvkbKaY-4
Sight systems: https://www.youtube.com/watch?v=lK_cdkpazjI
46. Thank you !!
!
Please consider this document proprietary and strictly confidential. The concepts, methodology and information produced by George P. Johnson (A Project:
Worldwide Agency) and contained in this document shall not be used or adapted in any form, either in part or as a whole without the written permission of
George P. Johnson (A Project: Worldwide Agency). Copyright Reserved 2014.
