Zarina Kanji has been leading business development for Tmall Global at Alibaba UK & Nordics since September 2018. She specializes in health and wellness, beauty tech, and food and beverage brands. Zarina is responsible for helping brands to enter the Chinese market and grow their business by connecting them to the over 1.31 billion global annual active consumers across the Alibaba ecosystem, which includes over 1 billion annual active consumers in China. She is based in London. Prior to joining Alibaba, Zarina was VP of Fashion & Sport Brand Partnerships at Lazada Group, Southeast Asia’s leading e-commerce company acquired by Alibaba Group in 2016. She spent the first 10 years of her career as a Buyer for House of Fraser, Ralph Lauren, and Jaeger specializing in Luxury womenswear and childrenswear in Europe and the Middle East. Zarina has a bachelor’s degree in Fashion Marketing and Communications from Nottingham Trent University and has lived in London, Dubai, and Singapore.
China has over 1 billion internet users, a digital-first nation widely regarded as the place to find the future of commerce, to see the latest tech innovations, and how brands are embracing tech tools to drive increased consumer engagement.
To understand how the pace of digital commerce has been able to evolve it is helpful to understand the consumer environment using insights from the demographic of users at Alibaba Group’s Tmall and Tmall Global, the home of brands in China:
- Mobile first: over 90% of them shop on mobile apps versus around 65% in the West
- Young: over 85% of shoppers are millennials aged under 40, and 59% are Gen Z aged under 30
- Ready and willing to spend: typically, from Tier 1 and 2 cities such as Shanghai, Beijing, Guangzhou, and Shenzhen they are well educated with disposable income and more likely to have a pet than a child
- Highly engaged: consumers in China spend a tremendous amount of time researching and interacting with brands and products before making a purchase, for example, users typically launch Alibaba’s apps up to 9 times daily.
Overall, the mindset of consumers in China is completely digitally native making the perfect scenario for digital innovation to thrive.
Here are 4 innovative tech tools from China that all brand leaders need to know about:
1. Livestreaming: In 2016 livestreaming was born through Alibaba’s Taobao Live. Livestreaming is where brands and influencers, or KOLs – key opinion leaders as they are known in China- sell products to consumers in real time through the platform.
Livestream formats are typically demonstrative yet very informal – from styling sessions to make-up tutorials, to tea-tasting parties- and sit at the core of what we call ‘shoppertainment’ – entertainment shopping – which is less about convenience and more about entertainment based on discovery, gamification, and social interaction. Consumers can watch, play games, leave emojis, ask questions, and purchase from the live stream. It can benefit the brand NPD too with consumers willing to give feedback on what else they want to buy e.g. a different color or flavour. Livestream saw a huge uptick through the pandemic and brands used this format to drive deeper engagement and sales because another advantage is that anything can be sold through livestream commerce from apples to iPhones.
2. Augmented Reality: Augmented Reality (AR) is a tool that uses computer-generated imaging to enable viewers to see the virtual integrated with the real world. AR is incredibly useful in conversion and moreover in bringing products and experiences to life.
Alibaba supported to evolve AR technology to offer personalized and invite-only small group live-streaming sessions which recreated the experience of in-store personal shopping for luxury brands such as Cartier, Burberry, and Gucci who were some of the first to adopt AR to closer connect with consumers who could try on watches or jewellery virtually, leveraging the technology to ensure the product fits well on the customer.
In 2022 Vogue China pioneered an augmented reality fashion show, the audience wore extended reality glasses, and the show featured brands, artists, and mascots walking the runway, consumers were able to interact with the mascots, wear the outfits, and take virtual selfies.
One of the advantages that AR 3D virtual try-on offers is a seamless digital experience, making brands and products more accessible for a greater number of consumers whether it be during lockdowns, physical distance from a store, or because they want to shop while at home on Friday night, AR technologies add a layer of tangibility for consumers to brands.
3. Virtual Influencers: Trend research agency WGSN predicts that by 2030, China’s Virtual Influencer (VI) market will be worth in excess of $42 billion USD, representing a significant share of the broader $530 billion global market.
Alibaba created its own hyper-realistic computer-generated influencers who are taking up positions as brand ambassadors to help retailers build brand profiles and amass followers among China’s Gen Z digitally-native consumers. Each is created using insights from Alibaba’s platforms to fit the profiles of the target demographic so idols can resonate with consumers. Ayayi for example has partnered with over 30 high-end brands, including Louis Vuitton, Burberry, and Prada, for marketing campaigns in China. She has over 1 million followers.
Brands have created their own virtual influencers, L’Oréal has Mr Ou, a Chinese-French entrepreneur who works in the beauty space and cares about the environment, he can offer product and ingredient expertise on its collections plus talk about L’Oréal’s sustainability credentials. And in the health and wellness world Holland and Barrett have April, its virtual avatar expert to whom consumers can ask product-specific questions and receive technical answers during livestreams. April decreases the risk of misinformation by human error, and therefore increases consumer confidence pre-purchase and increases conversion.
For the broader spectrum of brands outside the luxury space, it should also be considered that the cost of investing in a virtual influencer can be far lower and less risky than investing in human ambassadors, therefore the potential to increase ROI.
4. Metaverse: The metaverse is a huge opportunity. McKinsey forecasts the global metaverse market will be worth $5 trillion USD in value by 2030, and Gartner predicts that by 2026 a quarter of consumers will spend at least one hour a day in the digital metaverse for work, shopping, education, social, or entertainment.
The metaverse is an emerging 3D-enabled digital space that uses virtual reality, augmented reality, and other advanced technologies to enable people to have lifelike experiences online and is where brands are already launching stores, games, and digital events opening up a new reality for consumers that blends the sensations of physical shopping with the range of choice offered by e-commerce – something we call phygital – a blend of the physical and digital world bringing the best of those two worlds to the end consumer.
Taobao Life is Alibaba’s immersive virtual world where you can create your own avatar and explore inside the metaverse. During a 2022 Valentine’ day campaign Tmall’s Luxury Pavilion channel engaged 8 brands including Ralph Lauren, Valentino, and Versace to create 3D models of garments and accessories for consumers to try on in a gamified version of a shopping trip. You could shop with friends, find new friends, make purchases with virtual coins, and even snap a selfie in the virtual world. Users tried on these virtual fashion pieces 6 million times and took 2 million virtual selfies, on average each of the 8 participating brands reached over 5 million new users on Alibaba’s e-commerce platforms.
Conclusion
Consumer demands are constantly evolving and becoming ever more diverse. The key for brands is understanding that consumers live both offline and online and leveraging the appropriate innovative technologies of the phygital world to reach consumers at multiple touchpoints to develop deep connections with consumers through exploration, education, and entertainment that go beyond a transactional experience. The future of retail commerce is browsing, gaming, and shopping all in one place. Finally, as always early adopters will have the advantage of key learnings to optimize seamless consumer experiences for the future.