For the Future of Mobile Tech, Look to China: 4 Trends to Watch

Team Braze By Team Braze Jul 19, 2016

Since the 1970s, China has ascended from a closed economy to a global, economic powerhouse. Based on annual GDP, China’s $10.983 trillion economy is currently ranked second in the world, behind the United States’ $17.943 trillion. However, the gap between the two countries is projected to decrease to under two trillion dollars by 2030.

While much of China’s economic growth can be attributed to its thriving low-tech manufacturing industry, China’s high tech sector has surged in recent years. In 2015 China surpassed Japan as the leading exporter of high tech goods from Asia, accounting for 43.7% of all high tech exports.

China’s plan to increase its innovation and technology output to drive economic growth has been a success thus far, with no signs of slowing.

A large part of China’s growing high tech economy is its smartphone use. China currently boasts more than 600 million mobile internet users. Of China’s total internet users, 88.9% access the mobile web.

Considering there are more mobile internet users in China than the entire population in the United States, it’s no secret there are some trends US marketers can learn from their Chinese counterparts. What mobile and tech trends are we currently seeing in China that might make their way to the US? How can US marketers prepare themselves to take advantage of these future trends?

Let’s take a look.

1 . Personalized chat

Chat as a marketing channel is not something that western companies often use. Aside from the fact there is no clear winner in the US mobile chat market, there are a lot of limitations to chat for marketing purposes.

Chat for marketing is permission based, which limits its overall reach, and offers poor viral factors. You can’t just push your message to millions of WeChat users simultaneously via different ad platforms. Instead, chat is a much more personal experience.

Nike on WeChat in China, via Marketing China

Nike on WeChat in China, via Marketing China

However, this personal experience is why chat is a successful marketing channel in China. By connecting with users one on one or with a small group chat of up 100 people, company/customer interactions become a more personal experience. This higher level of personalized attention and relevance leads to more happy customers, more word of mouth, and can easily be used for customer loyalty or referral programs.

The take away for U.S. marketers

In the US, we are starting to see a surge in chatbots and companies and brands are experimenting with them. We’re not far from personalized chat as a more reliable marketing channel in the US.

To prepare, marketers must really understand their customer data. Chat for marketing doesn’t work if it’s not personalized. Irrelevant messages will quickly kill any value proposition chat offers and users will start to ignore messaging, just like they do with poor push notifications.

2. Mobile payments

China has a tech savvy population that loves mobile consumption. This is evident in the fact that in 2015, mobile transactions in China surged past the US with triple digit growth, reaching $235 billion in transactions. The US market grew 42% to $231 billion in this same time period.

China is currently living in a world that US early adopters dream of… a world with no wallets, cards, or cash. All of your financial needs are taken care of with your phone.

For example, in an interview with The Wall Street Journal, a Beijing hair salon owner named Piao Jianfeng estimated that 70% of his customers pay with WeChat, not a traditional credit card.

WeChat is one of two companies dominating the mobile payments space in China, along with Alipay: Alipay has 73% of the market while WeChat has 13%.

While Apple Pay has struggled to convert users into mobile wallet loyalists, Chinese citizens are using Alipay and WeChat to pay for everything. A key reason for this is the easy onboarding for new users.

In the case of WeChat, it’s “wallet” isn’t like the digital wallets that are familiar to Americans. Rather, they’re a list of pre-selected partners that users can make transactions with after inputting their payment information.

According to Connie Chan, a partner at venture capital firm Andreessen Horowitz, “I cannot emphasize the importance of this [WeChat’s] Wallet enough. It’s the Trojan horse that allows WeChat to quickly onboard user payment credentials that then unlock new monetization opportunities for the entire ecosystem.”

The take away for U.S. marketers

We are increasingly living in a world of the “always on” shopper. When everything is available through the push of a button or a scan from your phone, impulse buys will become more frequent.

As mobile payment technology adoption in the US improves, marketers will need to work with technology teams to make sure they’re ready to take advantage of this new breed of shopper. When new payment and technology opportunities arrive, it’ll be important to develop useful integrations quickly.

In addition, you can work with offline locations to champion different payment acceptance options. Not only can your brand enjoy the first mover advantage with new technology and develop a reputation as being on the cutting edge, but you’ll ultimately find ways to reduce friction points in the purchasing process, which can lead to more sales in the long-term.

3. Independent shoppings apps outpacing web purchasing

The data shows Chinese shoppers prefer to make their mobile purchases through a mobile app, rather than a mobile website. A Cisco survey revealed that 89% of Chinese respondents use a stand alone shopping app at least once per week. That’s 49% higher than the global average!

A reason for this disparity can be attributed to mobile web design. Poor mobile web design has turned many Chinese off to shopping on the mobile web. Instead, they turn their attention to specific shopping apps. The reason here is key; a stand alone shopping app for the sake of having one won’t necessarily increase sales. It has be be well designed.

The take away for U.S. marketers

It’s clear that mobile commerce is taking off. In China, nearly half of its $500 billion in ecommerce purchases are done via mobile. It’s estimated that by 2019, 71% of China’s ecommerce sales will come from mobile.

Mobile apps and mobile commerce are not new to the US, but a look at China’s growth indicates how important it will become in the coming years. This leads us back to why stand alone apps are so popular in China.

Mobile design must be a top priority for companies. Friction points in mobile design will turn off shoppers, so investing in top notch mobile design now is key.

4. All-in-one apps

There is a distinct pattern with many of these trends in China and that’s the role of WeChat. WeChat is an all-in-one app that extends beyond messaging and payments, and has an API that allows other apps to build within WeChat. This creates an ecosystem with WeChat, which makes its presence stronger in China.

Right now, the US doesn’t have a single app that dominates the market like WeChat. Instead, we have different apps for different functions. WeChat combines the functionality of popular US apps like Facebook, Twitter, Instagram, Venmo, and WhatsApp. That landscape could change.

Facebook appears to be positioning themselves as an all-in-one option for Americans. But they have a long (perhaps nearly impossible) road ahead of them.

Currently Facebook owns Instagram, WhatsApp, and Oculus. They’ve spun out their chat feature into its own stand alone app, one that has mobile payment functionality (it should be noted that former PayPal CEO David Marcus was hired to run Facebook Messanger). Facebook has opened up its chatbot API in an effort to get more companies to build on top of their technology. While it’s not entirely a single app experience, Facebook has the pieces in place to recreate WeChat’s dominance in the US.

Facebook Messenger pay screenshot by Rick Broida/CNET

Facebook Messenger pay screenshot by Rick Broida/CNET

The take away for U.S. marketers

It’s pretty obvious, but keep an eye on Facebook’s every move. Even if some of the moves Facebook has been making don’t always make perfect sense to me ($2 billion for Oculus?), I have to admit it’s got me thinking about how the pieces of the puzzle will play out down the line.

If Facebook’s app consolidation works out over the next years anything like WeChat’s in China, then many brands will find it worthwhile to partner with Facebook owned properties for the cohesive marketing opportunities.

Looking ahead

China and the United States are very similar; we’re both largely populous countries with high GDPs, and a tech savvy population. It’s hard to predict the future, but if we can see how our world power counterpart is using mobile technology differently than us, we can more accurately prepare for the future. Keep your eye on these popular Chinese trends as they progress to the United States and you’ll be well positioned to take advantage of these opportunities when the timing is right in the US.

Team Braze

Team Braze

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