Understanding China is crucial to understanding the future of online and offline commerce. That’s one of the major take-aways of the Internet Trends 2018 report released May 30 by venture capitalist Mary Meeker of Kleiner Perkins.

The report is one of the most highly anticipated insights of the year, considered by journalists and analysts to be a comprehensive snapshot of digital trends affecting how we work and live. The 2018 report devotes an entire section on China, with data provided by Hillhouse Capital. Key takeaways include:

    • Mobile defines the Chinese consumer experience. The number of mobile internet users in China has reached 753 million, up from roughly 100 million in 2008. Long- and short-form video and team-based multiplayer mobile games are growing especially quickly. In March 2016, video accounted for 13 percent of mobile media/entertainment time consumed; by March 2018, that figure had jumped to 22 percent. Our take: tapping into the mobile behaviors of Chinese consumers requires a deep understanding of the major mobile apps that define their lives. As we noted in a recent blog post, “The Rise of the Super App in China,” in China, consumers live on super apps such as WeChat. Super apps act as all-in-one Swiss Army Knife managing a consumer’s needs in one place, ranging from communicating with friends to getting taxi service. Brands need to experiment with what lovable experiences mean for consumers living inside super apps.

  • China retail innovation is spreading from online to offline. Ecommerce continues to achieve strong growth as do brick-and-mortar locations such as Hema stores that are reimaging the grocery experience with a combination digital grocery store, restaurant, and real-time ecommerce. Our take: Chinese consumers are driving the rise of online/offline with their comfortable embrace of apps such as WeChat, QR codes, and self-service kiosks, as discussed in our post, “How Consumers in China Are Creating an Omnichannel Future.” Capitalizing on these behaviors means creating relationships with the companies that are driving the retail landscape: Baidu, Alibaba, and Tencent. For instance, Hema stores require Alibaba’s Alipay.

  • Alibaba is no longer “just” a Chinese company – it’s a global company. Alibaba continues to expand beyond China. The company, already known for its dominance of Chinese retail, is earning a larger share of its revenue from outside China. Alibaba is one of the Top 6 worldwide internet leaders in terms of market capitalization, behind only Apple, Amazon, Microsoft, Facebook, and Alphabet. Our take: yes, Alibaba continues to ascend as a global power, and its two major competitors, Baidu and Tencent, are as well. We urge any business that wishes to succeed in China to understand Alibaba in context of its relationship with Baidu and Tencent. Their self-contained ecosystems will define how they grow domestically and overseas.

At Moonshot, we suggest businesses view China through the lens of their own people, processes, and platforms. We call this lens the BAT Framework. China is, of course, a vast, complex retail market. It can be intimidating for any company to understand how to gain a foothold. The BAT Framework gives businesses a way to navigate the different ecosystems that Baidu, Alibaba, and Tencent have built to power the growth of a marketplace that has captured the imagination of one of the most powerful people in the digital world. For more insight into Mary Meeker’s report, download a copy here. Contact us for more insight into succeeding in China.

Mike Edmonds

Mike Edmonds

Managing Director, VP Product