China: the most valuable social commerce market in the world?


A new report by Boston Consulting Group (BCG) claims that China could become the world’s most valuable e-commerce market within four years.

BCG claim that for the foreseeable future another 30 million Chinese people will go online to shop for the first time and by 2015 they will each be spending $1,000 a year—about what Americans spend online now.

BCG has also calculated that e-commerce could rise from 3.3% of China’s retail sales today to 7.4% by 2015. This is not just because the government subsidised high speed internet aids online shopping, but also because China’s has an expensive, inefficient ‘bricks-and-mortar‘ retail ecosystem and so a quarter of Chinese shoppers seek products online because they are not physically available in-store.

The rise in value of  e-commerce in China could also impact the social commerce market as Chinese e-shoppers are big users of social media.

As Chinese shoppers are somewhat reticent to trust sellers or advertising messages they turn to online customer reviews to form their opinions and according to BCG, over 40% of Chinese online shoppers read and post product reviews online. This is twice as likely as American online shoppers and four times as likely as Indians.

So what should retailers do to take advantage of the growing social and e-commerce market space in China?

Aside from considering the value of an e-commerce presence in Chinese, brands would do well to secure their presence on sites like Sina Weibo - a Chinese social networking site with over 200 million registered users - or other Chinese social networking sites like Tencent WeiBo or Ren Ren.

Retailers may also want to think about how to start engaging Chinese audiences online, not just in terms of where to engage them, but how to engage them in the context of a wider brand and social media strategy.

And as China is accountable for a large share of  share of mobile social media revenue at the moment, it seems that China could lead to some interesting new online revenue streams in terms of both e-commere and social commerce, as well as mobile shopping.

You can read the full BCG report here.

How multi-channel search marketing has become more social


Guest blog post written by Andrew Rayner, founder of internet marketing agency e-mphasis.Welcome to Google Places_1282572526342

The phrase “Multi-channel” has been a buzz word for some time now in the retail sector and this has led to 3 main changes in the market:

  1. With e-commerce capabilities accessible to even the tiniest of single-store independent retailers, the ability to shop across different channels has become almost universal.
  2. The consumer has became more confident shopping across channels (e.g. researching online and then purchasing in store,  or reserving online and then collecting in store) and is becoming increasingly demanding about their online  shopping experience.
  3. The use of social media means that consumers are no longer relying on the brand’s own marketing messages to make key purchasing decisions - they are looking to “people like them” (ie, other customers) to help make decisions.

Typically retailers have been working on a multi-channel strategy that ensures customers who already shop with them get the expected brand experience at every touch point. There has been little regard for those who have not yet committed to any one specific retailer or store. So what is the best way to capture these prospective customers?

The answer is to apply  multi-channel retail thinking to search and social media marketing. This means providing access to all channels from the moment when consumers start searching for products and services online, enabling the retailer to present a comprehensive search result to consumers that satisfies their exact requirements.

And with the consumer leading the purchasing decisions of their peers and influencing purchases through social media channels like Twitter, Facebook and product ratings and reviews, retailers need to ensure they also tap into the social media as part of their multichannel strategy.

One approach to this could be to use Google Places Optimisation (GPO). GPO works for retailers because it returns results for location based searches. In excess of 43% of all Google searches return a local result and so the opportunity for businesses with multiple locations is phenomenal.

GPO also provides a great opportunity for multi-channel retailers as it can link to a retailers transactional website, and if that website allows it, the complete customer journey, from search to basket, can be tracked. It can also provide all other relevant information to the customer, including contact details, opening hours and even information like parking facilities or food outlets. Google Places will also contain that all-important consumer review and feedback information – a vital feature of the consumer decision making process in the age of social shopping.

Effective GPO will not only save SEO and PPC costs, but will also deliver more relevant impressions and enable retailers to leverage social media more effectively. And as most consumers searching the web for a product or service are often not brand loyal (yet), they do not have a destination store in mind. But by using GPO as part of your multichannel search strategy you will put all routes to market in front of shoppers who are actively looking to buy.

The top FreshNetworks Blog posts in 2009


hbw | happy (custom) bokeh wednesday
Image by Adam Foster | Codefor via Flickr

Each month we look at the most popular posts on the FreshNetworks blog. We aim to bring you the best posts in social media, online communities and customer engagement online. Here are the most popular posts from 2009.

1. Google Wave vs Twitter at conferences

There has been a lot of talk and discussion of Google Wave throughout the year as it has spread though invites. For many people the immediate response is: “I’m here; what now?”. In our most popular post in 2009, Charlie looked at one example of how Google Wave can be used to add real value: as a conference back-channel. We show how at the Ecomm conference delegates were provided with Google Wave accounts. What resulted was a fantastic showcase of collaboration and crowd-sourcing.

2. Dannii, Danyl and instant X-Factor feedback

Dannii Minogue, a judge on UK reality TV show X-Factor, lost her mind for a minute live on air. She brought up a contestant’s sexuality when she was meant to be commenting on his performance. Twitter and the social web went wild. The speed of discussion and debate on Twitter, in forums and online communities was striking. This can be beneficial for brands when they are dealing with a potential reputation management issue. Good buzz tracking allows them to monitor social media, identify issues when they arise, understand the sentiment and where people are discussing it. Information is power, it helps brands make decisions about what to do and to do it quickly.

3. Gordon Brown’s YouTube trauma

It seems like a long time ago now, but at the end of April Gordon Brown made a major announcement on expenses for MPs in the UK. And he made it on YouTube first. Here Charlie Osmond looks at why this wasn’t the best idea and why social media isn’t always the right medium for your message.

4. Russian social network plans global roll-out

Russian social network VKontakte (В контакте) serves 1.4 billion page views each day to its 42 million users, and attracts 14 million unique visitors each month. In one of the most engaged and fastest-growing social networking markets in the world, it is a force to be reckoned with. At the start of September, Vedomosti (Ведомости), the Russian business newspaper, reported that VKontakte had registered the domain and plans to begin marketing the social network in twelve new markets globally before the end of 2010. One to watch.

5. Examples of online communities in the retail industry

As part of our series of online community examples,  we looked at examples from the retail industry. Case studies from Wal-Mart, Sainsbury’s and Starbucks.

How online retailers can benefit from social shopping


Sale sign
Image by net_efekt via Flickr

Online retailers are doing relatively well in the current economic climate. Whilst spending is down across the board, online retailers are doing either significantly less badly than their traditional competitors, or they are actually performing strongly. Both ASOS and Vente-Privee are seeing relatively strong performances in a weak retail market. There are many reasons for this - online-only business models have lower overheads and are potentially easier to scale (up or down) depending on demand). They also allow the retailers to stock smaller amounts of more products, allowing them to have a larger portfolio and to cater for a wider range of goods.

But these structural reasons only tell part of the story. The real reason why online retailers should be, and in many cases are, performing better than their traditional counterparts is because of what online lets you do. It’s not just taking an offline concept online, it’s about doing completely new things in completely new ways.

One of the real benefits of online retail is the ability to personalise the shopping experience and to recommend additional items that an individual shopper is likely to want. In the offline world, this is possible with a well-trained and experienced assistant who will identify what a shopper is likely to want and what suits them. They can then help to guide and recommend items that they think might appeal to them. Online we can use something a lot more powerful: people like me.

We know that people trust people like them, will make purchase decisions on what they say and recommend. It’s why online ratings and reviews are a significant influence on purchases. In online retail there are a number of ways in which you can use ‘people like us’ to recommend other products to shoppers.

  1. Use aggregate data from the shopping experience and from previous baskets to predict what people might want to buy. You can then present related items and other popular items based on previous purchase patterns.
  2. Use ratings and reviews from other shoppers to advise people on what products they might like and what people think about them.

Both of these can be quite successful when offered as standalone elements in the e-commerce system. But they take on a significantly more powerful role when integrated with an online community. Rather than just recommending products based on previous shopping habits, you can show people who have bought that product before, the other things they buy, the discussions they take part in, the things we know about them or that they are willing to tell us. And rather than a set of isolated reviews from other shoppers, we can show these reviews as just part of the content that somebody has added to the community, alongside the questions they may have asked or answered in the forums and photos of them in the galleries.

We know that people trust ‘people like me’, and that they are influenced heavily by people with whom they feel a connection, shared interest or other similarity. Online retail benefits most when it lets you see such people. You can find out not what people who may have bought one particular product have also bought, but, perhaps more importantly, what people who you feel an affinity with have bought. This doesn’t mean you will buy the product too, but it does increase your likelihood to do so. When you start to relate with people and identify with them you trust them and their choices more. You are influenced by them.

Online retail can do things that are just not possible offline. Whilst you might go to a store with a friend and get their advice, online you can tap into the thoughts, reviews and decisions of many thousands of people that you might identify as being people like you. Even if you don’t know them.

This is true social shopping. And online retailers can benefit from this in a way that is just not possible offline.

Social media in retail – monetising and building value


337/365: The Big MoneyImage by DavidDMuir via Flickr

Last week we ran the first event as part of our Social Media Training series - focused on the retail industry and attracting speakers including James from ASOS, Joanne Jacobs and our own Helen. The session was focused particularly on what those in retail could and should be doing in the current economic climate to use social media to help them build advocacy, innovate, gain insights from consumers and involve them in the business.

There are some great case studies of social media being used well in retail (and we’ve given some examples of online communities in the retail industry before) but, as with other industries, also cases of social media and online communities not living up to their promise. The session showed what works when you engage people online, a case study of how ASOS have built and launched their new community ASOS Life and a great presentation from Joanne Jacobs on how to build and monetise online communities.

FreshNetworks presentation: Case studies in social networks monetisation
View more presentations from joannejacobs.

The presentations provoked plenty of discussion and reaction. We’re running more events in our Social Media Training seminar series, if you’re interested in finding out more, coming along or even speaking then do let us know.