China vs US Online Shopping Habits
I was in New Orleans a few months ago and street performer grabbed my attention, but it was not his act that got my attention (not that it was boring or anything), it was the fact that he told spectators they could tip him through Venmo. Now I typically do not carry cash on me, I am a child of the digital age if I could pay for everything I buy with my phone I absolutely would, however not everyone in the country is ready to make that leap. Because he had a Venmo i was able to tip him, he was the only street performer I tipped that entire trip.
When I first learned about Apple Pay my whole life changed, I no longer had to carry my wallet loaded with 4 credit cards plus cash, I could now just tap my phone to a machine and get on my way. Sure some places like Starbucks already did this, but now everyone had the potential to accept mobile payments.
Imagine my surprise when I learned that in China nearly everything is paid for through mobile and QR codes are used on a daily basis. Most Americans do not even know what a QR code is!
All of these things beg the question, why has the mobile payment and shopping taken off in China while America still lags behind?
The Chinese government has invested huge amounts of money on China’s digital infrastructure making it second to none. Currently, there are about 802 million internet users in China, about 57.7% of their population, which is about 2.5 times the population of the United States; for comparison in the US, 76% of the population has internet access, which translates to roughly 290 million people. This means that there are almost 3 times more people accessing the internet in China than in the US, the country that literally invented the internet.
While in the US we have ApplePay (basically just a digitized version of our credit cards), in China mobile payment is done through third-party apps like AliPay and WeChat Pay.
Since we are simply using digitized versions of credit cards banks can still charge processing fees to vendors who take these types of payments, big brands like Gap and Urban Outfitters can take these hits, but smaller retailers cannot afford it thus skipping mobile payments altogether. China does things differently, many times cash goes straight from a person’s wallet to the payment app thus skipping banks completely, this means AliPay and WeChat Pay (who control the market) can negotiate much lower rates in order to keep prices down for their users.
US SHOPPING HABITS
Now let’s look at some statistics of American consumers: 62% of US consumers with access to the internet shop online at least once a month, which means there are at least 179.9 million online sales a month in the United States. 49% of these shoppers will reach these retail sites through a computer while only 37% will reach them through a smartphone; comparatively 77% of Chinese online shoppers will reach these sites on their smartphones.
Mobile shopping, much like mobile payment, is just not as popular in America. American consumers actually prefer brick-and-mortar stores, they are just a part of our culture, we did invent the shopping mall after all.
A few more fun facts about online shopping in the US: 80% of consumers are more likely to buy a product online if it offers free shipping, 33% used coupons provided by online merchants, 84% refer at least one social media site for recommendations with Facebook receiving most views, the most purchased products online are electronics, books, and clothing and apparel.
WHAT IT ALL MEANS
Say you are a Chinese brand and you want to sell in America, how do you adapt to American shopping habits? Well, here are some of our recommendations:
Learn to adjust:
As we mentioned earlier Americans do a good bit of their shopping through their phones, however that is not the main medium they use to shop online; make sure your website looks as good on a computer as it does on a phone screen. Don’t forget that things like QR codes are foreign to Americans, keep this in mind while designing posters, flyers, etc. Ultimately remember that Americans are all about branding, you have to separate yourself from the crowd by selling an identity and not just a product.
Invest in a social media presence and advertising:
84% of shoppers will seek recommendations on social media before buying. A proper social media campaign is the key to success. Social media platforms do a great job at targeting your audience, but you have to find it first.
We recommend spending the first month of your campaign conducting A/B testing with targeted ads to find your audience after your audience has been determined we recommend a period of aggressive advertising. Following this, you should consistently put out fresh content to keep your followers engaged. We do not believe you are ever done finding your audience and recommend constantly analyzing return data and adjusting the campaign as needed.
Who is your brand:
Americans are very loyal to brands, ridiculously so, we walk around wearing shirts with the names of our favorite brands plastered all over. One’s social status is often tied to one’s clothes, retailers brand themselves to specific segments of the population in order to attract those buyers by selling them an idea of what owning their brand represents. In return, brands deliver the idea of a community through social media, blogs, etc. when you buy their products you are also buying into a lifestyle.
Your image can make or break your brand. We recommend ample market research and talking directly to consumers in order to define who your brand should be.
Americans are suckers for a good story. American consumers are very involved in their brand’s story, where is the brand from, who is the founder and why did they start it, what obstacles did it have to get through. Startups have a special place in American culture, the story of an underdog who beats the big conglomerate against all odds is the driving force behind half of our movies.
Giving your brand a face connects you with the consumer, you are no longer just a brand, you are now a person, someone they can relate to, a friend.