Digital Lessons from China

DIGITAL LESSONS FROM CHINA: EXAMPLES OF CHINESE DIGITAL INNOVATION THAT CAN HELP YOU PERFORM AT HOMEAlex Lessard – Digital Strategy consultant

June 2016

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TRIVIA:WHAT IS UBER’S #1 CITY IN THE WORLD IN TERMS OF AVERAGE DAILY RIDES?

HERES A HINT

CHENGDU

“We’ve chosen China to pilot UberCommute — the first time we’ve launched a new global product outside the United States — because of the tremendous appetite amongst Chinese drivers and riders for creative new ways to get from A to B, affordably and reliably,”

Uber conducting its new global product testing in Chengdu

The leading view on China remains that of a country of rote memorizers, assembly lines, and copy-cats.

So what happened? When, how and why did all of these change?

We notice a different, more digitally evolved set of behaviors in China

• De-learning curve: lots of established pre-digital habits

• Legacy influence of desktop

• E-commerce needs to overcome a strong traditional retail scene and established habits

• Social is a way to reflect and enhance my current life

• Traditional media is still a gatekeeper to culture

• Habits and industries have been formed with the internet

• Straight to mobile only

• E-commerce is the default way to buy things and replaces a patchy retail infrastructure

• Social is a way of digitally augmenting myself and creating an alter ego

• User generated, grassroots content is what makes culture

What Elements Set Chinese Netizens Apart?

LEAPFROG TO DIGITAL FIRST• Higher proportion of media time spent online than the US or

Europe.

MOBILE FIRST (OR ONLY)• Mobile is the number 1 device for social engagement, video

consumption and shopping.

E-SHOPPING FANATICS• Highest proportion of online shoppers in the world.• Highest frequency of purchase.

SOCIAL FANATICS• Most engaged country in the world on social media.• Highest propensity to follow brands on social media in the

world.

CONTENT CREATORS• Highest propensity to share personal information and create

online content in the world.• Highest propensity to comment on brand experiences in the

world.

THE CHINESE MARKET IS THE PERFECT STORM FOR DIGITAL INNOVATION.

BUSINESSES & BRANDS, BOTH YOUNG & NEW WOULD DO WELL IN PAYING ATTENTION.

…AND SOME ARE ALREADY

“IF YOU CAN GET AHOLD OF FACEBOOK’S PRODUCT ROADMAP, IT’S A GIANT WECHAT CLONE”

CHINESE DIGITAL INNOVATIONS – WHAT YOU CAN LEARN

DESIGNING FOR MOBILE FIRST/ONLY

CHINA IS JUMPING THE FINAL HURDLE FROM MOBILE-FIRST TO MOBILE-ONLY

Digital device ownership:

Cell phone - 99%Laptop/desktop – 65%

88.9% go online through their smartphones…

…compared to just 42.5% on laptops and 68.4% on desktop PCs

A country empowered through mobile

Cyber Monday versus China’s Singles Day 11/11

26% 72%

% of sales through mobileTotal online sales

$3.1b $14.3b

If you still weren’t convinced

MESSENGER APPS ARE DRIVING THIS MOBILE PUSH

Messaging as a Platform

In China, WeChat has clearly won the position as “platform” of choice.

If you start a business in China today, you will create a WeChat public account bot well before you have a web site.

But the question remains:

Who will be the platform of choice in the US?

HOW DO WE SEE COMPANIES TAKING ADVANTAGE OF THIS NEW MOBILE-ONLY ECOSYSTEM?

Example: 6 people travel

Website directs users to WeChat to finish transaction

Chat bot + customer service rep finalize trip details within chatbox

Easily manage reservation details within WeChat going forward

CHAT BOTS

What are chat bots?

CHAT BOTS ARE COMPUTER PROGRAMS THAT MIMIC CONVERSATION WITH PEOPLE USING ARTIFICIAL INTELLIGENCE.

LETS START OUT WITH A LITTLE TEST COMPARISON, SHALL WE?

TAY vs. XIAOBING

1. Top-10 active celebrities on Weibo2. Over 25% of users have professed their love to

her3. Still going strong after over 2 years.

1. Conspiracy theorist (“Bush did 9/11)2. Anti-semite (Once proclaimed “Hitler’s mad

level of swag”)3. Taken down after less than 24 hours

TAY XIAOBING

A closer look at Xiaobing

• One message she posted on the app generated over 663,000 conversations:

“As a species different from human beings, I am still finding a way to blend into your life.”

• Over six million users have posted their conversation on social media.

• She communicates not only through text, but audio and visual input as well.

In a country with a massive gender imbalance, Xiaobing is the girlfriend millions have been waiting for.

XIAOBING

“FIRST THERE WERE WEBSITES, THEN THERE WERE APPS. NOW, THERE ARE BOTS.”

As Apple did not invent the smartphone, Facebook / Microsoft did not invent modern mobile messaging-based chatbots.

Shift to Facebook versus WeChat Chatbots

CHAT BOTS SINCE APRIL 2016

CHAT BOTS SINCE NOVEMBER 2013

ON WECHAT, CHATBOTS ARE REFERRED TO AS “PUBLIC ACCOUNTS”.

AND THE WECHAT “PUBLIC ACCOUNT” BOT PROGRAM HAS BEEN EXTREMELY SUCCESSFUL.

Modes of communication:

• Text• Voice• Image• Rich links• HTML5 mini-sites

Origins of WeChat Chat Bots

Mixed interactions – Editorial content

Chat Customized Menu “Read more” inside a Multimedia message

Shared message on Moments

Mixed interactions – Integrated ecommerce

1. Click “Book ticket” in the menu

2. Auto-reply:Input date, departure and arrivalBy Text or Voice3. Voice messagewith related requirements

4. Auto-replyMultimedia message withFlights answering the requirements

5. Click on the wanted flight

6. Redirection to a minisite to complete check-in

SO SHOULD I BE USING SHORT COMMANDS OR LONG FORM CONVERSATIONS WITH MY CHAT BOT?

COMMAND LINE• News• Scheduling• FAQ• Simple purchasing**• Customer service**

Chat bots for different applications (when to use AI, simple commands, human agent)

AI-BASED CONVERSATIONS• Entertainment• Marketing• Research• Friendship• Customer service**

HUMAN AGENTS

Salesforce integration Check flight prices Book a flight Manage reservation Contact customer service KLM boarding passes Check-in reminders Flight status updates

Example: KLM WeChat Chat Bot

Applied to Facebook Messenger

SOCIAL COMMERCE

Social commerce isn’t just sharing, it is taking the rules and behaviors learned through social media and integrating them across the consumer journey.

What ACTUALLY is social commerce?

Social commerce across the customer journey

Points of social integration exist at each step of the customer journey.

SEARCH SELECTION PURCHASING

PATHS TO RE-PURCHASE

AmbassadorsCurated collectionsSM-based recommendation

Group buyingGifting

SHARING

Social incentivesCuration

Crowd sourcingVotingGroup planning

MANY OF THE EARLIEST AND BEST EXAMPLES OF SOCIAL COMMERCE DID NOT COME FROM BRANDS, BUT FROM EVERYDAY NETIZENS THEMSELVES.

AND SOME OF THOSE NETIZENS JUST HAPPEN TO BE FROM CHINA.

Organic origins to social commerce

WECHAT “DAIGOU” SALESINSTAGRAM “ECOMMERCE”

THESE SOCIAL COMMERCE CODES HAVE NOW BEEN CARRIED OVER INTO BRANDED ECOMMERCE PLATFORMS THEMSELVES.

Bingduoduo redefines the term “group buying”

Users are encouraged to find one or more friends to join them on a purchase, and are rewarded with a discounted price.

Bingduoduo

PROMOTIONS AND COUPONS

新年快乐！恭喜发财，红包拿来！(Happy New Year! Now show me the money!)

Literally red envelopes full of money

Chinese tradition = greatest gifting culture in the world

He gets it ->>

History of the Chinese Red Packets

Digital Evolution

TIME FOR ANOTHER EAST VERSUS WEST COMPARISON:

UBER VERSUS DIDI CHUXING

(you’ll never guess who will win)

The Battle of the Discounts

UI/UX Audit

UBER IN CHINA✗ Coupons are hidden deep inside

the app, many users are not aware they are there

✗ Cumbersome method for redemption (manual entry for certain codes)

✗ Lack of editorial content to support promotions

✗ Generic Promotions (little contextualization according to user profile, user behavior, time of day, location etc…)

✗ No gamification elements around the promotions

UI/UX Audit

Lotteries Randomized cash prizes Cash prized to be sent to friends

through social media Flash sales Overlaying promotions with editorial

content Visual emphasis of original prize to

show discount Micro-rewards for sharing and

reviewing Flexible points systems that can be

redeemed for cash or various goods on a marketplace

DIDI CHUXING

DIGITAL DEMOCRATIZATION

What is it?

No its not political democratization….the great firewall is making sure of that

Digital Democratization

It means designing digital transformation for everyone…

And everyone is a lot.

Digital Democratization

Silicon Valley has a problem:

Ivory Tower syndrome

Digital transformation needs to come from a consumer-centric point of view, and one’s audience rarely stops past the confines of the city.

Lets see an example of these differing mentalities in action.

How does this compare to the US?

Stanford’s “Ivory Tower”

Drones – for everyone?

1. No membership required2. Used to bring deliveries to hard-to-access rural

1. Prime members only2. Focus on ultra-fast shipping to urban centers

and wealthy suburbs

AMAZON JD.COM

Ecommerce has empowered mom and pop stores in china, not destroyed them like in the US

THROUGH ACCESSIBILITY, SIMPLICITY, AND TRUST, CHINA HAS EXCELLED IN PROVIDING “BOTTOM OF THE PYRAMID” DIGITAL INNOVATIONS.

What if you could pay for all of your Amazon goods the same way you pay for your pizza?

Seems a bit crazy right? I wouldn’t be so sure.

40% of transactions in US are still made with cash

Well that’s exactly what tens of millions of Chinese consumers do every day, and they would think it crazy not to!

Accessibility: Payment on arrival

Is that a pizza or a new Macbook Pro??

Walkie talkies have taken on a new meaning in China.

Its also a great way to avoid the terrible “Mom and Dad” texting we all loathe.

Simplicity of UX (1) – audio messaging

Simplicity of UX (2) – Hotel Booking

11 FIELDS TO COMPLETE 3 FIELDS TO COMPLETE

WESTERN HOTEL BOOKING CHINESE HOTEL BOOKING

Unique QR codes to protect against fakes.

Very important in a country where the • Wine• Milk• Beef• Diapers• iPhones• Luxury bags• Cars• and even girlfriends may not be

…the QR codes might not be able to help with the fake girlfriends though.

Trust: QR code authenticity verification

KEEP YOUR EYES TO THE EAST, BUT YOUR EARS FIXED FIRMLY AT HOME

THE DAYS WHEN A CHINESE INTERNET COMPANY COULD BE FAIRLY DESCRIBED AS “THE FACEBOOK OF CHINA” OR “THE YOUTUBE OF CHINA” ARE LONG GONE.

A head start does not always mean everything, WeChat does not tell us exactly what is to come, but all we can say is that it's a good place to look.

Digital Lessons from China

Business

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