Like consumers in the West, China’s consumers go online to be entertained, to educate themselves, and to share with friends on social media. The important difference is that in China, buying opportunities are woven seamlessly into these activities. Merchants partner with content providers and key opinion leaders, such as celebrities and experts, to create innovative, engaging online experiences that generate buzz, draw in consumers, and lead to sales through embedded purchase links. Although some companies in the West have experimented with content-driven discovery, it is not yet commonplace. In contrast, as the following examples show, China’s digital environment is rife with experimentation:

• P&G and Memebox offer video tutorials using well-known makeup artists. For a generation of only children who don’t have a big sister to go to for advice, tutorials such as these fill an important need.
• Baby Tree embeds purchase links to featured products in its content that focuses on baby advice and motherhood. An educational portal and growing ecommerce site that has an online community of 30 million users, Baby Tree enables brand and merchant partners to leverage its user base.
• Tmall offers buyers a “digital mirror” app for their smartphones. The mirror lets online shoppers virtually apply as many as 2,000 makeup shades from well-known brands, such as L’Oréal and Bobbi Brown. Users can take selfies, share the photos with friends, and buy products directly from the app.
• On WeChat, China’s most popular social media app, cybercelebrities with big followings promote their brands by posting messages to their network—messages that include not only their products but also a payment button so consumers can buy on the spot. Similarly, celebrities on Taobao who have more than 1 million followers can monetize their fame by selling directly. On both platforms, celebrities have become online entrepreneurs, building large internet businesses. Although revenues from these ventures account for only 7% of the total e-retail market, the social media channel is growing in importance as a driver of brand awareness and sales.
• On Taobao, Tmall, and JD.com, China’s leading online marketplaces, merchants can promote their products by live streaming events, not unlike the TV shopping channel QVC in the US. For instance, rural farmers used Taobao’s live-streaming feature to market their kumquats for the Chinese New Year. But China’s live streams tend to engage more consumers, since they often feature well-known experts or popular internet celebrities—and a direct purchase link, of course. According to China Tech Insights, an industry research project, live-streaming revenues reached $246 million during the summer months of 2016 alone. On Taobao, every 1 million views results in 320,000 items added to customers’ shopping baskets. Some industry observers believe that live streaming will become a standard feature on China’s ecommerce platforms in the not-so-distant future.

In China, market influence is an ongoing, two-way street, driven by merchants and consumers alike. New concepts created by brands and merchants attract consumers’ attention and curiosity, which then inspire another cycle of innovation and discovery.

As the examples above make clear, merchants and brands in China are moving toward an integrated omnichannel retail model that capitalizes on the strengths of online and offline commerce, delivering a seamless, compelling customer experience. In this new world, discovery is ongoing, all the time—online, offline, and across all channels. We already see some examples of this in the West with the AmazonFresh click-and-collect model and the Starbucks loyalty app. Ultimately the distinction between online and offline commerce will disappear.

This future is coming faster to China than to the West. In the West, the prepurchase, purchase, and postpurchase phases of the consumer journey are segmented across channels and online platforms. This lack of integration drives the transactional nature of ecommerce activity. In China, the phases of the purchase journey are much more integrated, so the online and offline experiences are more seamless.

This online-offline integration is blurring the distinction among channels. It’s happening more quickly in China for two reasons: ecommerce technology is more advanced, and physical retail is less developed, so there’s a smaller base of legacy stores to protect. There are several signs of this new future:

• Alibaba is experimenting with virtual reality through its Buy+ events, which were introduced last fall. The events use virtual reality to make online customers feel as if they’re at a physical mall that has global merchants, such as Costco, Target, and Macy’s. More than 8 million shoppers have tried out the experience, using embedded purchase links to quickly buy items that caught their eye.
• China’s Wumart, a leading grocery retailer with more than 1,000 stores, recently launched a mobile wallet that customers can use to simplify payment during checkout in physical stores. The offline customer transaction data collected by the app is then integrated with the customer’s online account, giving the retailer a full omnichannel view of the customer. Drawing on this rich data set, Wumart can recommend products and promotions to customers and increase the appeal of its merchandise.
• Last year during 11/11 (China’s version of Black Friday), Alibaba worked with more than 1 million stores across various product categories to present shoppers with an integrated online-offline experience. For instance, customers who bought items at the Gap’s online store could have them shipped to the nearest brick-and-mortar Gap store—in hours instead of days. At the physical stores, shoppers could scan a QR code to buy an item and have it shipped to their home.

In this integrated future, merchants and brands will make business and merchandising decisions in response to how consumers react to and behave across all channels. (See “Understanding Chinese Consumers.”)