Why Is It So Important For Us To Understand The Evolution From China's Farming Landscape To The Digital Landscape?

With 5,000 years of continuous history, it is remarkable to think that one of the world's oldest civilisations is changing as quickly and dramatically as it is. The digital takeover in China means it’s out with the old stereotypical image of China; the Chinese farmer in a quaint paddy field. Swap the shovel for a smartphone, and you’re on the right track… Not since Adam was courting Eve has any place changed at the scale and pace that China has over the past few decades. There's the urbanisation, internationalisation, consumerism and the mass altering of family dynamics through the one-child policy. Each of these transformations is contributing to another area of significant change - digitalisation.

The way things are heading, eCommerce coupled with mobiles and social media is increasingly going to impose on the consumer market in China. We are already seeing consolidation of the big firms here with Baidu’s acquisition of PPS video platform, Alibaba buying an 18% share of Sina Weibo and Tencent’s purchase of Sogou search engine shares. We’re soon to see more integration of the big players which will bring in more intelligent data in marketing. With eCommerce increasingly playing a much bigger part in the retail scene in China, we can expect much more integration between eCommerce and social media with the more traditional bricks and mortar of retail.

China's dramatic digital evolution touches almost every aspect of Chinese lives; from the way they communicate, how they get information, to the purchasing decisions they make. The three areas that are particularly reshaping Chinese lives are social media, mobiles and eCommerce.

Social Media

It wasn't long ago when the only news source available to Chinese was through the state-run media channels such as television, radio and newspapers. Then social media came along and everything changed. The average Zhou finally has a voice, and they're taking advantage of it. 

Social media usage in China now far exceeds that of other countries. 90% of online Chinese have used social media in the past 6 months, compared to around 50-60% in Western countries. A worldwide survey of social media users by Forrester in 2012 found that 76% of Chinese uploaded posts, pictures and videos online, versus 24% in the USA and 23% in Europe. Social media campaigns in China have created celebrities overnight, given young couples an excuse not to talk during dinners out and even changed Government policy.

Mobiles

With feature-packed phones such as the Xiaomi Hongmi selling for RMB 799, smartphones have become accessible to a large portion of China's population.  More than 80% of China's 591 million online now access the Internet with their smartphones and with 450 million smartphones expected to sell in China next year, smartphones will make even more of an impact.

Smartphone apps like WeChat, with its 236 million active monthly users, are changing the way Chinese communicate, but a slew of new features coming out all the time, such as the bar code scanner, are likely to change more than that.   Two-thirds of Chinese with smartphones now use them to browse or buy products. For wealthy Chinese, it's nearly three quarters. Mobile shopping in the first half of this year was up 81% to 37.5 billion RMB.

eCommerce

China's eCommerce leader Alibaba accounts for almost three quarters of parcels delivered in China each day. With eCommerce having grown at an average of 70% a year for the past four years in China, 271 million shoppers have become a force to be reckoned with. Chinese consumers can now pre-order fresh American cherries online, and have them delivered to Shanghai just two days after they were on a tree in Montana. That’s faster than a shopper in Alabama would get them. Pre-ordered cars are selling out in minutes on social media, and smart phone launches are oversubscribed by millions.

One of the big drivers of eCommerce is coming from China's hundreds of 'smaller' cities. Although cities like Shanghai and Beijing are spoilt with countless retail options, the vast majority of Chinese consumers live in cities you've probably never heard of, that don't have the same choice for high street shoppers. That's reflected by the fact that consumers in smaller cities spend more on average than in China's bigger cities, and a much higher proportion of their income. In the far-flung landlocked Western province of Xinjiang, a predominantly Muslim land dominated by desert and home to the farthest point from the sea on the planet, there are more bikinis sold per capita on Taobao than any other province in China.

The rate of change in China's digital sphere is only getting faster. It is having more of an impact on everyday life, especially with the increasingly influential youth. To understand modern China means increasing research is needed into their digital world.

Mark Tanner is the Founder and Managing Director of China Skinny, one of China's fastest growing research, strategy and marketing agencies. Mark and his company are considered a leading authority on Chinese consumers, publishing the most-read English language newsletter about marketing to Chinese, and regularly commentating on media such as Bloomberg and The Washington Post. The agency's expertise and service has attracted clients as diverse as Swedish furniture brands, San Francisco tech companies, South East Asian tourist bureaus and Australian food and beverage companies. Sign up for the free weekly newsletter at www.chinaskinny.com