Were you ever stopped dead in your tracks by any of the millions of facts that “everybody knows?”
The sky is blue.
Water freezes at 32 degrees Fahrenheit.
Men must have the T.V. remote control in their hands at all times.
Yes, everybody knows that. But upon hearing one of the world’s many unshakable facts, were you ever seized by the question, “But why?”
I had my blue sky moment a couple of days ago when I ran across research distributed by eMarketer that laid out the rise of mobile commerce in China. Now, everybody knows that mobile is huge in China. Chinese consumers shop and buy on smartphones much more than U.S. consumers do.
And maybe I would have just let it go, because, well, everybody knows that. But what really grabbed me about the eMarketer research report was the statistic that mobile sales, as in mobile conversions, increased 85 percent in China in 2015. Why, in the world of journalistic hyperbole, that’s almost double.
Moreover, citing work by Analysys International Enfodesk, the eMarketer report said that mobile commerce, including consumer-to-consumer sales on marketplaces like Taobao, made up nearly two-thirds of e-commerce in China during the last quarter of 2015. That’s up from 9 percent two years earlier. Furthermore, the report said, mobile commerce in China would grow by at least 40 percent a year through 2018 and that by 2019, mobile commerce in China would account for nearly three-quarters of e-commerce and nearly 25 percent of all retail sales.
It all had me wondering whether there might be something in the research for U.S. retailers to latch onto as they struggle with the on-going frustration over seeing rapidly growing mobile traffic accompanied by slow-growing mobile conversion.
It’s not that I thought mobile purchases would account for two-thirds of e-commerce sales in the United States any time soon. But was it possible that the United States could see a period of China-like, dramatic growth in mobile conversions?
After all, mobile traffic is clearly growing in the United States and its smartphone-toting citizens have turned to their devices as a key shopping enabler.
A look at the past few U.S. holiday shopping periods shows that mobile traffic has increased from just over 5 percent of e-commerce traffic in 2010 to more than 52 percent in 2015. Conversions meantime, lagged behind, increasing from about 5 percent to 31 percent.
So, does the wild growth in mobile conversion in China provide a reason for optimism that given time, the United States might also reach a similar mobile-conversion tipping point?
In a word, no, says Eldar Sadikov, CEO of Jetlore, a Silicon Valley company that personalizes marketing messages and consumer experiences on digital sites. Sadikov, the firm’s founder, has spent some time going beyond, “everybody knows mobile is huge in China,” while thinking about “why is that.”
“You can’t simply say that the U.S. is just behind, and the U.S. will gravitate towards that,” Sadikov says. “I think the U.S. will have its own path.”
He points out that China is a mobile-first country. Many in the sprawling country of nearly 1.4 billion skipped right past the desktop stage and embraced the smartphone as their first and only digital shopping device.
In fact, in another piece of eMarketer research, “China E-commerce: 2015 Market Update” Alex Missei, head of e-commerce practice for Razorfish explained:
“The main difference between China and elsewhere is that the first device used for e-commerce purchases in mainland China, especially inland China, is mobile, while in the rest of the world it is either a desktop or PC. Mobile usage is much higher because 3G/4G is growing fast, and because people are just moving directly from a feature phone to a smartphone, completely skipping desktops, just like they are jumping from cash to digital payments and completely bypassing credit cards.”
Dan Buckstaff, Jetlore’s marketing vice president and a guy who recently conducted an extensive analysis of the Chinese market, says it’s also important to remember that Chinese e-commerce is dominated by two retailers — Alibaba’s Tmall and JD.com.
“Think Amazon in the U.S., but they are way more dominant in China. These companies together account for something like 90 percent of all mobile transactions, e-commerce transactions, too,” Buckstaff says, offering a best-guess estimate. “It’s concentrated in a way that we can’t imagine.”
That concentration, along with established payment systems, gets China’s mobile commerce past the frustration, inconvenience and anxiety of U.S. mobile, where consumers have to deal with a host of different digital sites — some familiar, some not so familiar — with different payment systems and logins in order to buy on mobile.
And there is more to the difference in mobile enthusiasm in China and the U.S., Sadikov says. E-commerce in China is tightly woven into messaging apps, which are wildly popular and widely used in China. Think of the messaging app in China, he say, the way you think of the role of the Web browser in the United States. It’s the tool or platform that people use to get things done.
“The smartphone was the first computing device that a lot of consumers got their hands on and consequently it’s the reason why message and apps and commerce merged together — because messaging was the first app that consumers used,” Sadikov says of China.
And no, integrating e-commerce into messaging apps isn’t the answer for U.S. retailers.
“I think the only way that mobile commerce is going to grow in its importance is if retail companies figure out unique use cases for mobile apps,” Sadikov says. “They basically replicate e-commerce sites and people don’t want to install the app just to do the same thing they do on the Web site.”
Among other things, mobile apps need to appeal to consumers at what Sadikov calls the “upper funnel” — consumers who aren’t necessarily in buying mode.
Retailers might create high-quality, magazine caliber content for their apps or set up ways for customers to rate, review and curate products, he says. Some retailers are experimenting with going beyond shopping on their apps by, for instance, adding radio stations that give users a reason to open the app. Features that bring together the mobile app and in-store experiences might also be a way to go, Sadikov adds.
And it all needs to be dynamic, ever-changing, and directed at individual consumers. Mobile’s small screens mean the top five or so products better be incredibly relevant to the specific shopper scrolling through those products, Sadikov says.
“Machines will dominate this process,” he says. “It cannot be done in a human-driven way, not at the scale that mobile requires.”
But everybody knows that.
Mike Cassidy is BloomReach’s storyteller. Contact him at email@example.com; follow him on Twitter at @mikecassidy.