eCommerce on steroids: China’s ‘Internet Gene’ brands
Nicky Szmala and Rachel Guoon 21 May, 2014 at 09:05
While Dell’s business model has changed and evolved over the years, its brand has become known as one of the first eCommerce-only powered companies. China’s rising stars of ‘Internet Gene’ brands take the online sales model to a completely new level.
The Middle Kingdom has given birth to a number of brands that provide a full customer experience and unique mechanics entirely through eCommerce and social channels. Here you will find a brief overview of some of these brands, and their underlying mechanics for customer growth and engagement.
Perhaps the best known of these in the western world is Xiaomi, a low cost handset manufacturer with year-on-year growth of 160% and a CEO who has been called “China’s Steve Jobs.” Xiaomi combines flashy sales tactics with crowd-sourced ideas from a geeky fan base for its Android-powered operating system. Prospective buyers first need to register before they can purchase the latest model online – reflected in the brand’s “Just For Fans” claim. Recently Xiaomi expanded to smart TVs, and also distributes through third party eCommerce sites while keeping the latest release momentum on its owned channels.
Another great example is SanShiZhu, which translates to “Three Squirrels” and sells high-quality nuts for moderate prices via Tmall (China’s leading eCommerce hub for brands). While the company partners with white-label manufacturers, it owns the marketing, distribution and quality control, enabling the provision of a first class, consistent experience.
The Three Squirrels are placed at the front and centre of the brand story; they appear as comics on packaging, recipes and any communication channel. Each package comes with tools to open the package and a little bag to store the remains of the nut varieties. While such touches seem small, few other brands pay this much attention to detail, and the combination of comics, eCommerce and an interesting unpacking experience seems to be a winner when looking at how much online buzz and sales numbers the brand has generated.
A third excellent example of a Chinese ‘Internet Gene’ brand is Roseonly, a company which started out selling roses from Ecuador. As part of a new trend around light luxury, Roseonly has recently expanded its offering to include exclusive chocolates made in partnership with a first class New York restaurant. The price tag reflects this exclusivity; a rose sells for about 120 USD, with the chocolates in about the same range. The secret to Roseonly’s appeal is that purchases are restricted to gifting, and limited to one recipient for the lifetime of each user account. The brand builds upon the insight that Chinese woman are reassured by a man’s willingness to buy the best, and signal his fidelity to one special woman.
When looking at these three companies, we identified seven characteristics that most ‘Internet Gene Brands’ carry to some extent, depending on their business model:
1. Emotional Story: A narrative that helps the brand to forge a connection with their target consumers.
2. Functional Story: The rational benefit that a user will get from the brand. For instance, Xiaomi builds the most user-friendly smartphone.
3. Experience: Extraordinary service that links emotional and functional stories together; Roseonly gifts are delivered by handsome, smartly dressed young men.
4. Niche Target Audience: A focused group consisting of early adopters and Key Opinion Leaders. This helps to keep initial marketing costs low while simultaneously building an early following.
5. Communication is 100% Social: It is important to create topics that are aligned with the brand story as well as entertaining and worth sharing. Content is dynamic and is often updated on a daily basis across social channels. The brand directly interacts with their followers. It’s less about a message, and more about starting a conversation.
6. Partnership: Build relationships that help the brand secure additional resources (media) and to establish brand image (co-branding).
7. Sales Mechanics: Unique sales mechanics that support the brand experience. For example; gifting only, flash sales, etc.
Of course, this is just the tip of the iceberg. China is the fastest growing eCommerce nation in the world, and we are sure to see many more eCommerce-powered brands and trends emerge in the future.