Wednesday, June 15, 2016

Gervasi, East-Commerce

Marco Gervasi, a management consultant (founder of The Red Synergy) and technology blogger who lives in Shanghai, believes that China will develop advanced models in both e-commerce and the internet of things that will inspire the world. He is also convinced that the growth of its super-connected world will happen faster than anywhere else in the world.

East-Commerce: A Journey through China E-Commerce and the Internet of Things (Wiley, 2016) is interesting, however, not so much for its predictions but for its description of the ways in which the typical Chinese online experience differs from its western counterpart. “In the West, people use the Internet to search for information and learn about things. In China, however, people use it primarily to entertain themselves. … Boredom was, and still is, what drives most people to the Internet in China.”

Toine Rooijmans, a market researcher, would ask his subjects how they discovered his website. “He learned that the users were finding the site through word of mouth or blogs. He would then ask if users were searching online for things they did not know. The answer was always the same: ‘When we do not know something, we ask our friends.’” And if their friends didn’t know? “’Then nobody knows,’ they would answer.”

Gervasi claims that the Chinese also shop differently from westerners. They prefer bazaars over individual brand sites. “The digital bazaar—the online souk—has many of the same advantages of the ancient bazaar: it creates competition among vendors, thus driving down prices. It also allows people to engage merchants in conversation, providing them with feedback on pricing and quality. … Bazaars are perceived as highly social entities whereas individual brand websites in China seem ‘antisocial’ and therefore untrustworthy.” I’m not sure that the difference between East and West is so stark in this regard, Amazon being a case in point.

Chinese consumers use social networks to interact with brands, even if they don’t buy from brand websites. They “want to know what the brands are doing, whether they are creating new products etc.” And their purchasing behavior is very social. “Chinese like to share and tell people what they have bought.”

Gervasi’s book is anecdotal, not the product of serious sociological research. But it goes a long way toward explaining why so many western businesses have failed to engage the Chinese consumer.

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