China’s Ecommerce Driven by Great Service

The more than 16 billion ecommerce purchases sent in China last year took an average of 2.6 days to be delivered.  It was even faster for online shoppers living in densely populated areas, such as the 1.7 days in Shanghai.   Almost nine out of ten times, consumers didn’t pay a mao for the delivery.

Platforms such as JD promote their speedy and reliable company-run delivery infrastructure as a point of difference.  Yet even on Taobao and Tmall, shipping times and service are good too, given that delivery is one of the three main categories rated by shoppers.  If delivery isn’t outstanding, it will be punished with poor feedback – that’s not a good look for potential customers who religiously check other shoppers’ ratings.  A low ranking also worsens a product’s placement in search results.

Waiting times for cross border packages are also improving, falling by a third last year.  International delivery infrastructure to China is improving all the time, making initiatives possible such as the cherry promotions from America’s Northwest, which can arrive in Chinese consumers’ homes as quickly as 72 hours after they are picked – faster than many Americans get them.  While many Chinese are expecting quicker turnaround times, it can be a balancing act for cross border sellers.  If it is too quick, some shoppers may actually question the product’s authenticity and whether it came from the promised country of origin.

Great customer service for ecommerce begins long before a product is bought and shipped.  With more than 8 million vendors just on Taobao all vying for mind-share, customers will simply switch to the next store if they get anything but great service.  More than 80% of shoppers ask a question before buying, and they expect a helpful and immediate response.

It’s little wonder why Chinese consumers are more loyal to the ecommerce platforms such as Alibaba and JD than any other brand in China, online or offline. That loyalty is contributing to the continued popularity of online commerce, which will see China account for more than half of the global retail e-commerce market by 2018, and 83% of online shopping in Asia.  It’s also a big factor why ecommerce continues to grow more than three times faster than traditional retail in China.

Compare customer service online to physical retail stores in China – the average mall or high street store isn’t exactly renowned for providing great service.  There are a lack of measurable incentives to make customers feel loved, few avenues for recourse if you have a bad experience, and limited training due to high staff churn rates in the retail sector.  The service gap online couldn’t be more pronounced.  However, it should highlight the pressing need for physical retailers to look at ways to provide better service to stay relevant.  They have the natural advantage of face-to-face interaction and most could be doing a lot more to capitalise on it.  China Skinny can assist you to develop a strategy for this.

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