The friendly folks at Meltwater have just released a new report titled ‘E-commerce in SEA: Supercharging Holiday Sales Through Social Media’ analysing consumer sentiment across South East Asia during the year-end shopping period last year to help e-commerce companies better reach their audiences.
The report found that Christmas shopping pulled in 56% of chatter, while Black Friday represented 22% of buzz. Fast-growing Singles’ Day – a shopping holiday started by internet company Alibaba in 2009 – is credited with kicking off the nearly two-month shopping period, and accounted for 20% of social media conversations.
Within the region, Indonesia drove the highest volume of conversations (57%), which isn’t surprising considering the country’s increased internet penetration and smartphone usage in recent years. Philippines and Malaysia represented 30% and 12% respectively, while Singapore brought in 1% of the buzz.
While the top brands varied from country to country, it’s clear that the marketplace model emerged the real winner. In Singapore, Amazon dominated social media with 51% of online conversations; Shopee led the buzz in Indonesia; Qoo10 was the most talked about in the Philippines; and Lazada emerged triumphant in Malaysia.
There’s more at the full report below.
E-commerce in SEA: Supercharging Holiday Sales Through Social Media [PDF]
Digital in Asia asked Jason Fairchild, Co-Founder of OpenX, one of the largest global sell-side platforms, to tell us about the state of programmatic advertising in Japan.
Digital in Asia: How is the Japanese market approaching programmatic advertising? Is Japan ahead, behind, or just different compared to other global programmatic markets?
Jason Fairchild: Programmatic is taking off in Japan, however, the market is still in its nascent stages, and spend is lower than other markets, such as the US and China. Despite this, more marketers than ever are using the technology to boost reach, relevance and impact, and a recent study from PwC predicts that the increasing demand for programmatic technology is set to push Japan’s media market to US$170 billion by 2020.
It’s not surprising that programmatic is growing as the technology streamlines the buying and selling of online ad space, allowing publishers to efficiently monetize their online content and brands to execute audience-based buying at scale – that is, putting the right message in front of the right user at the right time at massive scale. With investment in online ads expected to increase by more than US$3 billion, marketers will benefit from leveraging this technology to make their advertising more efficient.
DIA: How is OpenX addressing the issue of quality in digital advertising?
JF: As programmatic grows in Japan, it’s important to ensure the advertising ecosystem remains a clean and safe place in which to do business. In 2018 alone, OpenX is investing US$25 million in different quality-assurance measures, and we’re making sure we comply with industry recognised quality standards and have received independent certification for our efforts.
It’s important to note, however, that there are steps that everybody can take to take to stamp out bad practices and tackle fraud. Technology companies, marketers, publishers and every other part of the supply chain all play a role in solving for the quality issues across the industry.
With the recent emergence of new industry standards and initiatives, marketers are now at a point where they can make informed decisions about their technology partners, based on the partners’ commitment to quality.
One example is the IAB’s ads.txt initiative, which has nearly stamped out the threat of domain spoofing, also known as misrepresented domains, and dramatically increased clarity in the supply chain by public record of who is authorized to sell a publisher’s inventory. Another is third-party certification with Trustworthy Accountability Group (TAG), a cross-industry accountability program to create transparency in the business relationships and transactions in digital advertising. Technology companies who meet the stringent standards for certification outlined by TAG earn a seal of approval, and because these demonstrate good practice among vendors, these standards can help buyers and sellers make better decisions on technology partnerships. But it’s important to note that these quality controls are not automatic – they require proactive choice by buyers.
DIA: Mobile now accounts for half of all digital ad spend in Japan. What does this mean for advertisers?
JF: More Japanese consumers own smartphones than ever before, so it’s not surprising to see users spend more time on mobile devices, which in turn drives a marked shift in content consumption towards mobile. Advertisers and publishers have picked up on this trend and now understand that mobile has become the place where consumers spend a majority of their time, and they must adjust their digital strategies accordingly.
To effectively take advantage of this growing channel, advertisers will need to incorporate a range of mobile-specific ad formats and move aggressively away from the desktop-first mentality that most of them have been using. This includes building creative that considers the smaller screen sizes and leveraging rich location data to add more context to their campaigns. On the other hand, publishers must also think about screen size and the user experience to ensure that users aren’t bombarded with too many ads or ones that impede a users’ ability to see or read the content they want.
DIA: Speaking about mobile, what is the future of in-app advertising in Japan and globally?
JF: Quite simply, in-app advertising is the future of mobile advertising. Japanese adults spend three hours and three minutes every day consuming digital media, and in 2017, mobile accounted for more than half of all time spent on digital, so the opportunity is huge.
Studies reveal that the most lucrative in-app ad opportunity is a new innovation called opt-in video, where the consumer is given something of value in exchange for engaging with a video ad. This type of video advertising has proven to be the most consumer-friendly ad format in mobile, and in fact, consumers like it three times more than a non-skippable pre-roll. Completion, viewability and engagement rates are significantly better with opt-in video than other types of mobile video, and the consumer-friendly nature of the ad format makes it a great option for publishers and app developers trying to monetize their content as well.
DIA: What are OpenX’s plans for the wider Asia Pacific region?
JF: Both our Japan and APAC business are continuing to grow. In fact, early this year we announced record new revenue growth in Japan of 52% year-on-year and have signed more than 40 new clients in 2018 alone. The growth derives from us being the largest independent advertising exchange in the country (second only to Google) at a time when programmatic is gaining traction in Japan.
As a result, last quarter we announced that we will be opening our Singapore hub, and plan to move into Australia by the end of Q1 2019. To complement our expansion, we’re committed to growing our team in the Asia Pacific region. We appointed Satoru Yauchi as the director of partner services in the region, who has already played a key leadership role on the team since joining late 2017 and will continue to support us in delivering on our ambitious plans for growth across the region.
There’s been a lot of scepticism recently about where advertising is headed. Online advertising has seen massive growth over the past decade thanks to its flexibility, transparency and measurability—not to mention the ROI. But with this growth comes a new challenge: more than before, marketers must fight to break through the clutter and connect with their target audiences. The rise of obtrusive and irrelevant ads on the web has led to a concurrent surge in ad-blocking software as consumers become frustrated with or indifferent to the content bombarding them. In response, some of advertising’s biggest spenders have started to shift their focus back to real-world tactics such as experiential marketing. This leaves advertising at a tricky crossroads, and got me thinking: Will digital advertising always remain an important instrument in a company’s marketing toolbox? And as an advertising company, how can and should we push advertising to adapt if we believe it to be the way forward?
Xaxis wholeheartedly believes that digital advertising needs to deliver tangible results to continue to be relevant, and as such has repositioned to focus its entire offering on client outcomes. The best way to do this was to understand the client’s advertising goal that ties as closely as possible to the true business outcomes they are trying to drive. So what do marketers need to think about and do differently to truly engage consumers and drive measurable business results?
Artificial intelligence (AI) has completely changed what we can achieve in advertising, from media buying and planning, how to achieve set targets, and the metrics used to understand success. As my colleague Sara Robertson, VP of Product Engineering for Xaxis once said: “AI is like a spreadsheet on steroids”. The potential of AI lies in its ability to see the bigger picture. We’ve made AI and machine learning an integral part of our offerings, used to find and define audiences, refine our creative messaging, generate audience personas, and develop bidding strategies, all of which can transform a digital advertising strategy to drive remarkably improved results for clients.
And while it is true that consumers hate interruption, it’s never a bad thing when advertisers are forced to adapt by creating content that consumers enjoy. One example is a creative new type of ad that has emerged in China to play in breaks of TV dramas online. These ads utilize the TV shows’ original content and narrative arcs, and feature the same actors in their on-screen costumes, making the ad almost indistinguishable from the original content to hold the audience’s attention and pique their interest. This type of advertising is expected to surpass 2 billion yuan (US$311 million) in sales revenue this year, up from 800 million yuan in 2016.
Advertising with influencers also holds increasing importance in the marketing mix as a way for brands to create trust and credibility with consumers. Over the last few years, influencer marketing has skyrocketed to the point that it has become a category of its own. The premise for this is that consumers trust people they already follow rather than an obvious advertiser. Brands are therefore working to get attention from consumers by channelling their message through people with extensive and trusting networks, commissioning influencers to co-create ‘native’ content that advertisers can then amplify. All of this shows that content needs to mimic what consumers already enjoy in order to engage, but advertising itself won’t disappear.
At the end of the day, approaches such as experiential marketing can be a highly valuable way for many companies to increase brand exposure and customer loyalty. But they shouldn’t necessarily replace advertising altogether. Marketers need to look at the bigger picture and focus on reaching business objectives by quantifying success with real metrics and conversions—regardless of the marketing tactics they choose to convey their messages. That means connecting with your customers authentically and holistically, wherever they happen to be – though as we know, people are spending more time online now than ever.
For Xaxis, repositioning our offering to focus on client outcomes was the most logical move. To align with a client’s true marketing and business objectives—and deliver results to hit those objectives and maximize ROI—should be the goal of any marketing tactic. What really sets digital advertising apart is its ability to do exactly that, with more transparency, efficiency and measurability than any other approach. For this reason, we don’t see it dying out anytime soon.
In 2017, China became Singapore’s top market for both tourism receipts and visitor arrivals, contributing 3.2 million tourists. As one in a series of parallel moves seen worldwide, mobile payment provider Alipay also launched it’s payment platform to allow Chinese tourists to pay in the way they know best.
Alipay is China’s largest mobile and online payment platform, with over 520 million active users. Alipay has evolved from a digital wallet to a lifestyle enabler where users can hail a taxi, book a hotel, buy movie tickets, pay utility bills, make appointments with doctors, or purchase wealth management products directly from within the app.
Nielsen Outbound Chinese Tourism and Consumption Trends
China is just back from the two-month-long 2018 summer holiday, during which millions of Chinese travelled abroad for pleasure. With Alipay’s growing presence outside of the Chinese mainland, Alipay overseas spending skyrocketed, with the platform processing 2.6 times as many in-store overseas transactions this summer as compared to 2017.
Asia continued to dominate the list of Top 10 countries and regions in terms of summertime overseas Alipay transactions. Hong Kong topped the list, followed by Thailand and South Korea.
In Singapore, the average spending per Alipay user was 1759.13 RMB (approx. 352.35 SGD) in the summer of 2018. This was a 32% average increase in spending per Alipay user and a 320% total increase in spending for the same period in 2017. The number of Alipay transactions in Russia also increased by over 5000%, as Chinese travellers flocked there in July for the FIFA World Cup.
Of the 80+ airports that support instant tax refunds via Alipay, airports in South Korea recorded the highest amount of tax refunded, followed by airports in Europe.
Mobile growth continues to hit record highs in 2018, built on a foundation of programmatic delivery. And that makes it more important than ever to get mobile innovation right, says Itamar Benedy, CEO, Glispa. In this Q&A with Digital in Asia, he talks about GDPR, Mobile Network Operators (MNOs), playables and performance marketing on mobile.
How important are Mobile Network Operators and their data in the mobile first era?
Mobile Network Operators (MNOs) are the sleeping giants of ad tech, but as proven by the recent AT&T AppNexus deal, these titans are waking from their slumber. MNOs will be incredibly powerful in the mobile advertising industry due largely to the vast scale of user data they hold which, if utilised correctly, places them in an extremely strong position to challenge the Facebook and Google duopoly.
What puts MNOs at an advantage is the opportunity for value-added services, delivering engaging content to users and creating additional revenue. They provide an exciting alternative to the limited in-app inventory currently available for mobile advertising. The most important part of mobile advertising is having a direct line of communication with the audience, and MNOs can provide the channels necessary to interact with users through multiple touch points, consequently maximising their potential.
To date, MNOs have done little to harness the power of the data they hold, but we expect to see others follow AT&T’s lead through commercial acquisitions. Hong Kong conglomerate CK Hutchison is one company that has noticed the potential of MNOs and, despite the European competition commissioner blocking its acquisition of the UK’s O2 network, it recently bought a 50% stake in Italy’s Wind Tre in a $2.45bn deal.
How is GDPR impacting Glispa and the wider industry around data?
In spite of the confusion that still surrounds the GDPR, its introduction is largely positive. GDPR is forcing the industry to be transparent and deal with data responsibly, and will ultimately minimise the number of unethical vendors. This will enhance the user experience and pave the way for more open and honest relationships between brands and consumers.
GDPR has also compelled advertisers to think more creatively about campaigns to encourage users to opt-in. We’ve seen an increase in the creation of playable ads because they include an opt-in element that incentivises users to consent to data collection so they can play the game, without forcing them to do so.
As a German-founded company, Glispa has followed strict data usage regulations from the outset, so the introduction of GDPR is having minimal impact on our business operations. We view the GDPR regulations as an exciting means of expanding our creative potential by finding new, fun ways of encouraging user opt-in.
Tell us about playables – how do they work, what are advertisers doing with them?
Playables are entertaining and rewarding mini games that provide a more meaningful and interactive experience than traditional ads. They are most commonly used in the gaming sector where the concept is much the same as test driving a car; allowing the consumer to ‘try before they buy.’ Playables are highly successful in this sector as users who go on to install the full app already know what the game is like and are highly likely to play it regularly.
But playables aren’t just limited to the gaming sector, any brand can create a fun and interactive game ad that will entertain and engage its target audience. Giving users the ability to interact with content leads to better brand recall and enjoyment, thus reaping positive conversion rates and ROI. Interactive ad formats also have map tracking so even if a user does not take the required action, advertisers can see where interactions are happening and derive insights to improve future consumer communications.
Playables are the most effective way to increase creativity within mobile advertising and, as demonstrated in a study by AdColony, are consistently voted as a favourite ad unit, but so far adoption remains relatively slow.
Why are more advertisers not using the playables format?
There are a number of explanations for the slow adoption of playables, all of which will be made redundant in the future. Firstly, brands outside the gaming market don’t always understand the relevance of playables, after all, why make a mini-game when they don’t have a full game to sell? But it is becoming increasingly clear this is an outdated viewpoint and many non-gaming brands, such as Burger King, are making good use of playable ads to boost user engagement.
Complexity is another hindrance to playable adoption. As a new format, there are no proven templates advertisers can use to design and build ads, making playables time consuming and expensive to create. With limited playable case studies in most verticals, advertisers are understandably reluctant to take the risk of investing in the format but this will change as a defined playbook emerges and the complexity and cost of production decreases.
What are your thoughts on the Facebook and Google duopoly?
A noticeable theme of Cannes Lions this year was that companies are ready and willing to challenge the duopoly. The AT&T Appnexus deal and OATH’s acquisition of Yahoo demonstrate the huge leaps telcos are taking and how they are gearing up for battle. These telcos now have the data, user-base and scale, as well as the funds to really pose a threat. Moreover, with Facebook’s well-publicised lack of transparency, it may not take much for companies to start asserting their dominance over the giant.
How do you see the evolution of performance marketing and the role of mobile as a channel?
Performance marketing has evolved from its affiliate roots to play an ever-increasing role in marketing strategies. The main reason for the growth of performance marketing is its unique measurability, which is vital at a time when the pressure on marketers to justify digital spend is increasing and transparency is highly valued.
Mobile is a particular driver of performance marketing. Consumers spend huge amounts of time on mobile devices and we see exceptionally high levels of engagement but mobile advertising is difficult to measure so marketers are turning to performance marketing, which can achieve specific KPIs such as app downloads and re-engagement.
As it becomes a more trusted and widely used tactic, performance marketing is moving beyond traditional monetisation metrics such as clicks and downloads toward more meaningful goals such as user engagement and lifetime value. In fact, performance marketing is proving so effective at driving these outcomes, marketers are beginning to take best practices from this technique to use in brand campaigns.
The report surveyed 129 professionals working in programmatic media at marketing agencies across APAC, EMEA, and North America (NA). It explores the challenges and opportunities the shift to programmatic media trading is creating for agencies, the impact this has on their relationships with clients and publishers, and how they are leveraging technology to create differentiation and provide new value to partners.
Despite programmatic’s ability to drive greater ROI for brands, APAC agencies have yet to take the plunge into owning and operating their own programmatic stack; 66% use either third-party technology exclusively or a combination of third and first party technologies, considerably higher than their EMEA (42%) and NA (44%) counterparts. But building their own ad tech stack is a top priority in the next 12 months for 46% of APAC agencies. So what is driving this change?
Building Bridges to Publishers
Surprisingly, agency respondents from APAC claimed that increased use in programmatic buying technology has resulted in improved relationships with both publishers (75%) and brand clients (85%). In fact, 33% of APAC agencies cited a more direct relationship with publishers as one of the major benefits of programmatic, along with access to a greater total number of publishers (45%). Building strong partnerships with relevant publishers is seen as critical to ensuring that clients get a disproportionate advantage in the marketplace, beyond pricing. Interestingly, and probably helping cement better relations between publishers and agencies, only 12% of respondents cite lower CPMs as an expectation from brands for moving more spend to programmatic channels.
Whereas programmatic has been blamed for the rapid rise of ads appearing in brand unsafe environments in NA and Europe, the story in APAC is different. 39% of agency respondents in APAC cited brand safety as one of the major benefits of programmatic technology, and 35% touted strong fraud and brand safety rates as one of their core differentiators, more than any other region.
This could be due to fraud being directly proportionate to media CPMs. With the exception of Australia and Japan, some of APAC’s largest media markets have a significant supply skew, leading to reduced CPMs and from there lower fraud rates than in other parts of the world where it is harder to balance scale, quality and value.
Despite the increased use of automated technology for media buying and reporting, there remains a transparency disconnect for APAC agencies; 67% of respondents say transparency around programmatic ROI is a major benefit to their clients, but 64% still cite a lack of transparency around media execution as their biggest challenge. To compound the issue, 58% of respondents say the growth in programmatic is causing brand clients to demand still greater transparency from them.
What’s on the Horizon?
The shift to digital, and more recently to programmatic, has enabled brands and their agency partners to pull off ever more impressive marketing feats and tactics. However, perceived shortcomings in data activation and audience segmentation are compelling many agencies to turn inward to assess how they can fill gaps through proprietary technology solutions and capabilities. According to the research, priorities for APAC agencies over the next year focus on driving even stronger ROI and delivering real business outcomes through furthering omnichannel capabilities, securing and ring-fencing client data, and building out data science teams and custom buying algorithms. But understanding cost implications and having the build vs buy conversation is critical, as 62% of APAC agencies cite cost of maintenance as the number one criteria for evaluating tech ownership decisions.
In an industry and region where things shift rapidly, one thing feels certain: growth in digital will continue unhindered. And what goes digital eventually goes programmatic. The agency that adopts tools, strategies, and mindsets today that maximize programmatic’s strengths and solve its challenges will be well positioned to deliver greater value to brands and create strategic moats for their own businesses for the foreseeable the future.
The scale and scope of influencer marketing is growing at pace and holds increasing importance in the marketing mix as a way for brands to reach consumers. In this column, Charles Tidswell from Socialbakers provides his top tips for executing social media and influencer marketing campaigns in Asia, including measuring ROI, finding the right influencers and avoiding fakes, artificial intelligence, macro and micro influencers and the specifics of influencer marketing in the Asia Pacific region.
1. Find the right social media influencers
Finding the right influencer is crucial.
A good starting point is to define the brand’s audience personas. This allows the brand to truly understand their target audience, and thus identify an influencer who has values and audiences that line up with that of the brand’s. It is important to look at how aligned an influencer’s content is with your messaging. This can be determined by understanding key traits such as their likes, dislikes and the content they have previously posted.
Brands should ensure that the influencer they select has good engagement and reach.
Engagement is an indicator of how interactive an influencer’s audience is with the content they are posting. How much, and how often audiences engage with the influencer are indications of how meaningful those relationships are. This includes how many readers like, comment or share the influencer’s content.
While not the most important, ‘reach’ is a valid metric for consideration. However, brands should resist the urge to only look at unique visitors as a measure of reach. Traffic and followers are only meaningful to the extent that the influencer is reaching the brand’s target audience.
With the rise of influencer marketing platforms, finding the right influencer can be easy and efficient, eliminating the need to manually sift through influencer profiles. Brands can easily search for influencers based on their audience size, interests, location, age, and gender. It is also possible to see an easy-to-understand score estimating the performance of the influencers, in order to determine the most effective influencer to work with.
2. Measure the ROI of influencer marketing
There are a multitude of ways brands can measure ROI.
The two most common ways are to measure engagement rates, as well as frequency of mentions and hashtags.
Engagement rate is possibly the most common form of measurement. This metric will differ according to the platforms you are evaluating, so brands must be sure to measure the engagement of each individual post in order to better understand what’s working. To put the effectiveness of influencer posts in-context, brands can also analyse their non-sponsored content along with sponsored posts from previous partnerships to benchmark content performance. Since there is no magic number for what a “good engagement” rate should look like, this analysis can be a way to put the engagement rate into context. Brands can even consider looking into the Cost per Engagement (CPE). CPE breaks down how much you are paying for engagement: likes, comments, clicks etc. To get to this number simply divide your total influencer budget by the number of engagements.
Brands looking to see if their influencer marketing campaigns are sparking conversations can tap on social media listening tools. These tools dive into the conversations taking place across social media to find out if the brand is appearing more frequently. Aside from brand mentions, setting up a unique hashtag is also a great way to measure success. If you are creating a campaign with an influencer you can assign a specific hashtag to that campaign and monitor if it’s gaining any traction.
3. Detect and manage fake influencers
Fake influencers are notorious for buying fake followers, hoping to trick brands into a paid collaboration. To make sure the influencer of your choice isn’t ‘fake’, look at their volume of interactions per 1,000 followers. A fake influencer will have a low share of engaged fans, which is a red flag showing you shouldn’t work with that person.
With Socialbakers Influencer Management, marketers can are able to search by location, age, and interests. Influencer posts’ data can be pulled up for inspiration and likes, sentiment of comments, brands they’ve worked with before, and how they performed in the past for marketers to make an informed decision. By doing so, fake social media influencer profiles can be sieved out more effectively.
4. Make use of emerging technologies such as artificial intelligence
AI can help take the guesswork out of Influencer Marketing; from recruitment of influencers based on the brand’s objectives, provide the ability to forecast influencer performance, predict optimal incentives that would encourage influencers to take a certain action etc.
We will continue to see advancements in AI-powered Influencer Marketing that will help brands understand what content is most likely to resonate and influencer the purchase or adoption decisions of the end consumer.
5. Remember the difference between macro and micro influencers
Micro influencers are those who have between 1,000 and 100,000 followers. This category of influencers have a tight-knit relationship with their audience and tend to have higher engagement and conversation rates. While micro influencers often cover a wide range of niches, they are often more affordable than macro or celebrity influencers.
Macro influencers, on the other hand, have a significantly higher follower base – this ranges from 100,000 up to 1 million followers. Given their wider reach, macro influencers tend to have a more diverse audience as well as an established position within a given community.
Deciding which category of influencers to work with largely depends on the scale of the campaign and its objectives. Brands looking to create product awareness or to reach a wide audience may choose to use a macro influencer, while brands keen to encourage customer conversion or retention may prefer to work with micro influencers. They can convert customers cheaper and more efficiently than any of the other options, making them a powerful option to boost ROI.
6. Choose the right social media platforms for your market
Asia has become one of the most important emerging regions for social media marketing. The hunt for social media influencers requires extensive knowledge on metrics that brands find most important, aspects they value in an influencer the most and more.
Regardless of the industry or region, brands are increasingly interested in incorporating influencer marketing as an inherent part of their digital strategy. We have seen it for some time in industries like fashion and beauty, but today influencer marketing is ubiquitous and is one of the fastest growing categories in advertising, projected to be a $5-10 billion market by 2020, according to Mediakix.
Platforms that are the most used for influencer marketing in Asia include Facebook, WeChat and Instagram which have a high volume of monthly active users in the millions. One significant platform to take note of is China’s WeChat, with about 963M monthly active users. The functionality of WhatsApp, Snapchat, Messenger, and Facebook are integrated into this application.
The app also takes it up a notch by allowing Chinese users to order meals, book taxis and doctor’s appointments. WeChat even offers an assistant chatbot called WeSecretary to manage administrative tasks such as paying bills, booking airline tickets and much more. With such a wide array of integrated functions on a single platform, WeChat paves the way – and provides opportunities for influencers to build closer relationships with fans as well as potential fans.
In 2018, China is an almost entirely cashless consumer economy, where popular mobile payment apps such as WeChat Pay and Alipay have enabled consumers to go straight from cash, to smartphone payments, leapfrogging the use of credit cards and cheques.
One of the world’s leading players in mobile or e-payment, China saw $15.4 trillion worth of mobile payments handled by third-party platforms in 2017 – more than 40 times the amount processed in the US.
Chinese consumers can buy a pancake at a roadside breakfast stall, order food online, pay credit card bills, or manage stock accounts, all with just their smartphone. In fact, mobile payments are so prevalent that use of cash fell from 63% of transactions in 2011 to just 33% by 2016.
When Alibaba founder Jack Ma carved out his payments business from the ecommerce giant in 2010, he pulled off a coup with multibillion dollar implications. But it was a move by WeChat a few years later that really set the category alight.
The sending and receiving of red packets containing cash (also called lai see in Cantonese, and hongbao in Mandarin) at Lunar New Year is an important tradition across China. But historically red packets were always tangible items, real cash in a paper envelope. Then, in 2014, WeChat introduced digital red packets. The ability to send festive cash to family and friends using just the WeChat Pay mobile payment platform. It was a revolution, and 4 years later in 2018, the idea of digital red packets had caught on to such an extent, that 80% of Chinese consumers sent a red packet via WeChat. This year only 69% sent a physical red packet.
WeChat’s success with digital red packets introduced and popularised the mobile payments category with Chinese consumers, and built a platform for the adoption of wider mobile payments functionality across money transfer, taxi ordering, online shopping, bill settlement, wealth management, for both WeChat – and it’s competitors.
Alipay and WeChat Pay have also made their presence felt abroad. Both companies extended their payments services to hundreds of thousands of merchants in regions like Southeast Asia and Europe, targeting outbound Chinese travellers and encouraging them to settle their overseas shopping bills with the apps. Adoption is still low, but merchants are keen to facilitate easier transactions for high volume and wealthy Chinese tourists.
Within China however, the game is up. The dominance of mobile payment means not only that companies like Alibaba and Tencent manage consumer financial transactions, but as a by product they also control huge lakes of valuable personal data. Already this data is being used to close the loop on the consumer purchase cycle, and up-sell other financial products such as loans, or retail experiences. Alipay has also built Sesame Credit, a personal credit rating platform and Chinese government social rating system, linked to it’s mobile payments footprint. While English language media tends to describe Sesame Credit as an authoritarian system straight out of Black Mirror, Chinese social media users seem to focus more on the advantages than the burdens.
Ay, there’s the rub! As the West agonises over Cambridge Analytica and GDPR, WeChat and Alipay have already built the future of mobile payments. Convenience trumps all, if you let it.
Below we’ve collected key takeaway resources covering WeChat, Alipay and the mobile payments ecosystem in China.
Mobile Payment Usage in China 2017
Tencent: The Growth of the Digital Payment Ecosystem in China
Social Networks & Digital Payment in China
Alipay and WeChat Pay: Reaching Rural Users in China
Digital transformation in China – Take aways from the Alibaba Global Dreamer Program
While the 2014 World Cup in Brazil was marked by social media, the upcoming tournament in Russia is set to be the World Cup of Mobile. Internet penetration has grown from 42% to 55% since the last tournament, and mobile now makes up 73% of total internet consumption.
Tentpole sporting events are particularly suited to mobile app targeting, as sports fans are typically never far from their mobile devices, and a large portion of content related to the tournament will be consumed on a mobile device.
Live streaming has grown massively over recent years, to the extent that the 2018 Winter Olympics was live streamed by twice the people compared to 2014. In addition, 30% of fans stream sporting events on their mobile devices because it allows them to watch games and events “on their own terms”. Second screening in live sports is also huge – 80% of viewers use their mobile devices to search for player stats and to replay videos of key plays.
Beyond live streaming, several other mobile app categories see uplifts during major sporting events:
Sport – fans use mobile sports apps to find out more about their favourite teams and players throughout the tournament, both during and between games
Fashion is the biggest ecommerce category, while payment methods and delivery issues are the biggest concerns for online retailers and marketers in Southeast Asia and Taiwan, according to a new report from Econsultancy and Shopee exploring challenges and opportunities in ecommerce across the region.
The results revealed that 51% of online retailers and 41% of marketers saw their online sales rise, but for 28% of online retailers and 29% of marketers, online sales remained the same relative to the past year.
Fashion and accessories was the most popular category on online marketplaces, with 23% of online retailers and 16% of marketers active in it. Health and beauty was the second most popular category, with 17% of online retailers and 15% of marketers offering choices in it.
The survey also revealed that marketers in Vietnam (11%) were the most active in the computers, camera and mobile phones category, edging out Singapore (10%) and Taiwan (10%).
While around a third of online retailers (32%) and marketers (33%) indicated that they did not sell internationally and had no plans to, the ecommerce market in the region is poised to grow with 54% of online retailers and 39% of marketers planning to offer their wares and services to other countries.