ONLINE SHOPPING NEIGHBORHOODS How young Chinese consumers navigate the online marketplace Jay Mark Caplan Helen Yu

CONTENTS Part 1: INTRODUCTION Part 2: ONLINE SHOPPING Part 3: ONLINE SHOPPING NEIGHBORHOODS Part 4: KEY FEATURES Part 4: SUMMARY

Part 1: INTRODUCTION

In China, the neighborhood where you go shopping says a lot about who you want to be.

Shanghai Grand Gateway

Beijing Xidan

Chongqing University City

For example…

Choosing districts to shop helps young consumers look, learn, and explore different classes and cultures, even if they don’t know exactly what they’re shopping for.

But what about shopping online?

This report is about how and why young Chinese women are using e! commerce and social media to make their shopping choices. We conducted ethnographic research with 10 young women who are avid online clothing shoppers in Beijing, Shanghai, and Chongqing. This report is all about young women and clothes, but the conditions and drivers behind the behavior have implications well beyond cheap and cheerful online fast fashion. Because what we see is that for young consumers in China, the starting point for shopping is shifting from advertising, brands, and retailers… to people.

Part 2: ONLINE SHOPPING

For young Chinese women, shopping online is not a channel choice. It’s a hobby.

“Although I seldom go shopping now, in fact, I am shopping everyday... “Every morning, the first thing for me is to open my browser and click the websites in my favorite shopping folders one by one, browsing blogs and favorite Taobao shops. I check if there is anything new, and find the things that I want to buy. “Online shopping is the happiest moment for me!”

! Guoguo, 26 Beijing

ECOMMERCE = NEW LIFE HOBBY Shopping any time, anywhere Avid online shoppers don’t just shop for the clothes, they shop because they love the experience. “I love shopping on Taobao. I use Taobao mobile app on the way to work, at lunch check the sales at all my favorite shops, and buys loads of gifts for family as an excuse to shop more. I love the moment of going to work and seeing my desk covered with parcels.”

-  Linda, 24, Shanghai

What is the advantage of online versus offline?

MORE CHOICES

ECOMMERCE = MANY NEW CHOICES Diversity of products unavailable offline Most young consumers shop online to save money, but increasingly they go online to find products they cannot get locally, especially cheap clothes in premium design styles, and branded goods imported from abroad. “Up to a quarter of e-commerce demand in China is, in fact, for products that consumers cannot find in physical stores—a circumstance rather unique to China, where… the country’s immensity limits the coverage of many physical retailers.”

-  Boston Consulting Group

Too many choices?

ECOMMERCE = HARD TO FILTER Long and unreliable search process Online shoppers have a serious pain point when it comes to navigating through the clutter of options, unable to find the right keywords for products, and overloaded with way too many vendors offering similar stuff. “Sometimes I try to search on Taobao, but it’s so hard to figure out the keywords. Even when I get it, there are so many vendors claiming to sell the same thing. Usually I just go back to big retailers like Vancl.”

-  Faye, 26, Beijing

Search ‘woman, coat’ on Tabao, there are over 800,000 results in 100 pages to view.

Even using brand name as keywords, still there are a lot of shops using the same product picture.

How can young consumers gain the advantage of the diversity and abundance of choice online, filtered in an orderly way so they can browse and explore just like at an offline shopping destination?

Part 3: ONLINE SHOPPING NEIGHBORHOODS

ONLINE SHOPPING NEIGHBORHOODS = Online destinations created by social media sharing where consumers can explore a curated selection of choices.

ONLINE SHOPPING NEIGHBORHOODS

TAOBAO WOW Retailer! based

HERS.COM BBS forum

RENREN J SNS! based

MEILISHUO Social

shopping network

ONLINE SHOPPING NEIGHBORHOODS ARE ALL ABOUT

PHOTOS Photo content from other consumers creates the tangible feel of wandering around a neighborhood. Photos present the place, the people, the lifestyle, and the choices in vivid context. Providing an ongoing stream of true- to- life photo content is the key feature of online neighborhoods.

TONS OF PHOTOS

“I spend several hours on Meilishuo browsing every day. They update all the time, so there is always new stuff.”

“The online shops never have enough photos. I want to see all the product details, and how they match with other products, and where the model wears it, and how I can use it in my life.”

REAL LIFE CONTEXT: Honest and relevant “I hate those Korean- looking fake models, I want to see the model in real situations!”

IDEAS FOR USAGE: Show the possibilities “I like when the models have their own personal style, you can get great ideas from their outfits.”

Social media on ecommerce sites

Ecommerce links on social media

Social shopping networks

Taobao WOW

Guang Taobao VANCL Star

Renren Douban

Hers.com 55BBS

Meilishuo Mogujie

Voguemate

ANY SOCIAL MEDIA CAN BECOME AN ONLINE NEIGHBORHOOD

From official sites to popular SNS, there is always potential

for young consumers to share their shopping choices.

Why do young Chinese consumers need Online Shopping Neighborhoods?

Part 4: KEY FEATURES

1. SOCIAL AUTHENTICITY THE RIGHT PEOPLE Exclusive group with clear relevance that provides true! to! life shopping guidance. Not anonymous crowdsourcing, establish the social status and lifestyle shoppers can associate with products and styles.

STANDING OUT

FITTING IN

TENSION

TENSION Young consumers want to express their personal style by purchasing unique things, but they also want to fit in with the right group and learn the ‘right’ way to dress. Social authenticity means showing users choices curated by a group of peers whose identity fits with their style agenda, to establish trust and relatable life context. LIKE OFFLINE: Learn from others in the context of real daily life occasions BETTER THAN OFFLINE: Easily close the aspiration distance and follow any group you like without feeling shy.

EXPERIENCE THE AUTHENTIC LIFESTYLE “I used to follow a Hongren called Tokyopanda. She isn’t like other Hongren who are only showing clothes and products. I think she writes her blog with her whole life and whole heart. I can see where she travels, what delicious foods she eats, what interesting small accessories she buys... I enjoy reading her like I am there too.”

Renren: “I use Renren to see what the normal girls wear, to choose outfits that are appropriate for the office.” 55BBS: “Those rich youth live abroad, they know lots of foreign brands and recommend them.” Douban: “Creative youth who love arts and life, we share the same interests and the same vintage style.” VANCL Star: “I check the fit on others who have the same body type as me to make sure the clothes will fit me too.”

Different networks establish different kinds of social authenticity:

The further users are from their aspired group, the more they rely on social media to establish social authenticity. Guoguo has been shopping online for six years, and considers herself an ecommerce expert. She follows online celebrities to find budget alternatives that represent premium style. “[She] wears a lot of luxury brands, she has decent taste. I trust her products reflect the trends and styles from big brands.”

KEY INSIGHT: Young Chinese women want to be special, but not too special! They want to explore new choices that express their individuality, and yet ultimately want to feel like they belong and the choices they are making are right.

KEY IMPLICATION: Community matters, and make it exclusive! Building customer community and helping them share lifestyle and product choices can create important social context for your brand. Just make sure sharing isn’t random: the point is not to help anybody and everybody get together, but to build the identity of an exclusive and attractive group that your customers want to join.

2. CULTURAL FILTERING FOR BETTER BROWSING Organize products by cultural categories instead of product categories, connecting selections of products around styles, outfits, occasions, celebrities, etc.

SOMETHING NEW

SOMETHING I KNOW

TENSION

TENSION Young consumers want to try tons of new things, but without strong category expertise, don’t know exactly what they are looking for, or how to put it all together. They want cultural inspiration and guidance that connects them with new visions of themselves, searchable by influences they are familiar with. Cultural filtering provides a relatable starting point for browsing and exploring for young consumers based on cultural outcomes. LIKE OFFLINE: Shop multiple retailers at one accessible destination. BETTER THAN OFFLINE: Browse by culture across many retailers at once.

CULTURAL FILTERING QUOTE: “The vintage style is quite hot recently, I heard everywhere. I log on to Meilishuo to check the vintage albums, and it’s like ‘oh I see, this is vintage’ and they even have different categories in vintage style. I can make my own vintage look from here.”�

MEILISHUO: •  By Theme: User! generated ‘magazines’ collected around a wide

variety of themes, such as occasion and popular styles

•  By Influencer: Choices searchable by online celebrity ‘hongren’

YOKA: •  By Style: Editors pick out the latest global trends and select

similar items from the mall with links.

•  By Outfit: Editors pick out some inspired looks from global snapshots website, and select similar items from the mall with links.

KEY INSIGHT: Young online shoppers want to browse outcomes, not products! They are still experimenting with their styles and want visions of potential selves with a ready! made package of products attached.

KEY IMPLICATION: Provide vast selection, but organize it around influences relevant and inspiring to your audience! Know the cultural influences that matter to your target, and present selection smartly around making inspiration a reality. Remember, it’s not about values and ideas: young consumers want tangible lifestyle results.

3. SHARABLE SHOPPING FOR INFLUENCE ACHIEVEMENT Enable online shoppers to share their choices and influence peers to add extra emotional benefits and experience incentives to shopping online.

MORE SHOPPING

LESS EMOTIONAL

TENSION

TENSION Young consumers love shopping online, and want an emotionally! satisfying social shopping experience. They want a more thrilling and involved life habit that provides a sense of accomplishment and belonging. Sharable shopping makes online shopping a more satisfying hobby by adding group engagement and influence power to the process. LIKE OFFLINE: Makes shopping a sharable leisure activity BETTER THAN OFFLINE: More involvement, more accomplishment, more influence!

GROUP BUY FOR STATUS, NOT JUST SAVINGS “I organize group buys, and buy stuff for my friends... They consider me an online expert, and I love that! They know I recommend the right styles and always have the best deals.”

DIYIDATUAN: •  Exclusive buyer membership: Enforces strict filtering of new

entries, including a test! Once admitted, participants have first access to great deals and limited editions.

MOGUJIE: •  Group Buy Voting: Users can ‘like’ potential group buys, and if

enough users vote, the sale goes on and they get exclusive first access to the limited item.

KEY INSIGHT: Shopping sharing is about influence, not intimacy! Most online shoppers don’t care about making close friends in these networks. What they want is group participation, the opportunity to influence an audience of peers, and a feeling of exclusivity from being part of a shopping! savvy group.

KEY IMPLICATION: Purchase is a new touch point for social engagement! Consumers don’t need you to help them post pictures of themselves, and this is just one form of social sharing, mostly for aspiring web celebrities. Add value and social status based on the group buy model with exclusive sales and limited items that reward participation, and allow participants to pass great choices on to their peers.

Part 5: SUMMARY

ONLINE SHOPPING NEIGHBORHOODS are online destinations created by social media sharing where consumers can explore a curated selection of choices. ONLINE SHOPPING NEIGHBORHOODS meet the emerging needs of high! involvement online shoppers in 2 ways: 1.  Filtering the right choices that meet their needs and expectations 2.  Creating a deluge of photo content and purchase choices to browse and get

steady daily doses of new ideas.

WHY DO YOUNG CONSUMERS NEED ONLINE NEIGHBORHOODS? 1.  SOCIAL AUTHENTICITY – ESTABLISH THE STATUS ATTACHED TO PRODUCTS Young Chinese women want to be special, but not too special, and exclusive groups of content creators establish social context and lifestyle associations for clothes. 2. CULTURAL FILTERING! BROWSE PRODUCTS BY CULTURAL INFLUENCES Young Chinese women want to shop for desired results, not specific products. Provide vast selection organized around influences that inspire your audience. 3. SHARABLE SHOPPING – INFLUENCE PEERS FOR ACCOMPLISHMENT SENSE Young consumers want to influence others, so provide plenty of ways to share purchase choices among peers.

Thanks!

China Youthology ���  Brand!Youth Connection Consultancy email: jay.caplan@chinayouthology.com www.chinayouthology.com www.openyouthology.com