Viveca Chan: what marketers can learn from digital China
Forget China being a country of copycats. It's now leading the way on digitally-integrated living, and Viveca Chan explains what we must learn from it.
Viveca Chan is founder of WE Marketing Group. She spoke during the morning session of NEXT19 on 19th September 2019. These are our liveblogged notes taken on the day.
Chan started her career just as China started opening up its doors to the rest of the world. And much of her work was bringing the best of Western brand management to China. In the last decade, that’s changing. China is becoming advanced in using digital in marketing - and pulling ahead of the West.
There’s a hotel in China, built in a mine, that is completely voice-activated. Well, it is if you speak Mandarin. It doesn’t work in English. Food delivery is becoming the norm for people in Chinese cities. Everything is social, and you need WeChat Pay to pay for anything. As a result, it is the number 1 company for eCommerce. TenCent and Alibaba provide everything for retailers. TenCent can touch every aspect of your life — and collect data about it. The Chinese seem very happy to trade their data for convenience. Alibaba provides the whole ecosystem, including logistics, that allows Mom and Pop stores to join into the digital markets.
This is why the “copycat” direction has been reversed. US social networks are cloning ideas and technology from Chinese ones, for example.
In Hema stores, you can go in, choose whatever you want, and your WeChat account pays for it. You can eat in the shops - or have it delivered to home within 30 minutes. That’s way beyond Amazon Go - and one of the key selling points is the freshness of the food. Robotic kitchens allow rapid food service - and the large ordering screens become game surfaces so you can play games with your friends while you wait.
A campaign like #lifechangingplaces for Lufthansa needs to be delivered into the digital spaces that you actually find Chinese people in. The biggest problem in advertising is fragmentation: different agencies targeting different mediums and platforms. As an agency, you need to start closing that loop now. You need the creative, project and, vitally, the data skills to manage this. This is the new agency:
- understands the latest tech
- can still be creative
- drives actual business growth
Conversions matter more than likes.
Case Study: Luckin Coffee
How can you launch a Chinese coffee brands? The Chinese don’t drink coffee. National consumption is only at about 20 cups per person per year. However, there's an opportunity in the living patterns urban Chinese are using. They have developed a decentralised approach: going to the most convenient places within 2km, and having everything else delivered.
How do you beat Starbucks?
- Better quality - 20% more expensive
- Affordable - Starbucks is around €4 in China, which is expensive. Undercut that
- Accessibility - this is not "the third place", that idea’s outdated. Coffee needs to be available at any moment
Luckin Coffee doesn’t have a lot of big stores - just a lot of counters everywhere. And you can’t pay cash. You have to use the app - and that means the company knows exactly who you are and what you consume - and thus can market to you better. The coffee machines are internet of things devices, allowing efficient supply chain management.
The coffee is delivered to you in 30 minutes, or it’s free.
Branding still matters. Starbucks is green. Luckin is blue. The name? One that wasn’t registered already, suggested by the lawyers… They use a lot of social - of ads on mobile. They go straight to the customers' WeChat. Coupons are spread to friends - if you friend gets a free coffee, you get one, too. Viral friend recommendation.
In 12 months, they have sold 90 million cups of coffee.
You cannot fight the leader by copying them. Luckin’s background is in travel and logistics, like Uber. So they used that core competence smartly, coupled with innovative thinking, and rich data about consumers.