The Chinese e-commerce market to exceed US and Europe combined

Great insight into the Chinese e-commerce market from McKinsey recently has got us excited here at Chatterbox Labs. Having surpassed the US e-commerce market in 2013 China is predicted to exceed both the US and Europe combined by 2018!

On closer examination China is not only exceeding these markets in size but the major technology players in China are doing things very differently to Western giants. Whereas there is a broad comparison between China and the West in terms of type of service the fact is major Chinese social networks are ahead of the game.

Social is massive in China, where consumers look to friends and contacts for advice and recommendations as they tend not to trust ‘official’ sources such as government or major corporation sources. The number of social media users is huge; it stood at 335.9m in 2015 and is expected to increase to 480.4m by 2018; which is 35% of the Chinese population.

The dominant social-media player is Tencent; they operate a platform called WeChat with 500 million active monthly users globally. This platform has multiple functions, is available on all mobile platforms and mobile web. WeChat provides:

  • Text messaging
  • Hold to talk voice messaging
  • Broadcast messaging
  • Sharing of photographs and video
  • Machine Translation service

Critically though in addition to providing all this functionality WeChat has for some time provided the ability to shop and pay via mobile payments. They have an innovative and open approach to mobile payments and their users embrace this; in-app payments, paying for taxis, retail payments; even for betting. The platform is not a Facebook, Twitter or Google service; its all pervasive, a one stop shop with greater functionality being built in all the time. The fragmentation of service and provider in the West has seen all of us accept a more inferior service and we are only starting to catch up now. For sure it helps when the market is consolidated within one country but Tencent attributes 70m of its active population to outside of China.

Major brands are starting to drive new promotions and sales via WeChat; adding commerce functionality into their WeChat accounts to allow consumers to make purchases. In the McKinsey iConsumer survey 15% of users had made a purchase via WeChat and 40% are interested in doing so in the future. Perhaps these predictions of growth are too conservative?!

When we developed our Path 2 Purchase product for real time classification of pre-purchase intent and post purchase chatter we saw the potential of the Chinese e-commerce market. We aligned quickly to this and our product is market ready with the ability to use machine learning methods to decipher pre-purchase intent in Mandarin Chinese. Beyond the ability to just understand the language we have ensured our clever algorithms can handle how users speak in China. They do reference or use English words alongside both simplified and traditional mandarin; and they are heavy users of emoticons; we handle all of this via our classifiers to find purchase intent from Chinese consumers. As the market leader Tencent drives its purchase capability and aligns with large brands they are the ideal global leader to be working with us in China. With the scale and number of users only a machine learning solution that works in real time and at scale is going to make the grade.

For more information on Path to Purchase or the Chatterbox Labs NLP Framework please contact Andrew Watson, VP Strategic Alliances –

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