Retail Media’s influence on the Chinese market
For years, the United States has been the world leader in terms of traditional advertising spending. However, when it comes to e-commerce, the prize for the highest investment goes to China, ahead of its American competitor. In 2023, the Chinese market spent nearly $52 billion on Retail Media compared to $38 billion in the US.
The tendency to resort to this advertising system is becoming increasingly common in the digital environment. As a result, it is estimated that in the coming years it will account for around 18% of total digital advertising spending. On the other hand, the influence of Retail Media in the Chinese market stands out. Asian e-commerce giants such as Alibaba have seen in it a system that boosts their visibility and increases their range of action. Let’s discover this ecosystem where the primary objective is to get to know the consumers, attract them, retain them and build loyalty.
Note: includes digital advertising that appears on websites or applications, mainly dedicated to ecommerce retail; for example: Alibaba, Amazon or JD.com. Excludes search engine and social media advertising. Includes any advertising displayed on any electronic device. *Excludes Hong Kong.
Source: eMarketer, Marzo 2023
The impact of e-commerce in China
China’s presence in the e-commerce industry is nothing new. Asians are a world reference in this sector and their influence is increasing over the years. There are several factors that make China stand out as an exponent of global e-commerce.
Enhancing offers
China has always been known for making the most of its business strategies. One example is the so-called 11.11, Singles’ Day, where the country’s e-commerce giants bring exclusive offers to the limelight for their consumers.
This event has been a global trend-setter for years, becoming a digital phenomenon every November 11. This is just one example of how China is able to boost its product visibility with seasonal campaigns that bring high levels of profitability.
Hyper-connected environment
Another factor that makes China stand out from other countries is its hyper-connected environment. 99% of the Asian country’s Internet users connect through their mobile devices, making it the nation with the largest mobile Internet presence globally.
With this data, the Asian market has been spurred by the need to find new methods to promote its products within the digital environment. In this sense, Retail Media has been one of the allies in which it has found support.
Promoting sales on marketplaces
If there is one thing that makes Chinese e-commerce stand out, it is that, in addition to being great manufacturers, they are also expert sellers. Logistically, China represents 50% of Amazon’s sellers in Spain and its online presence is increasing all the time.
The application of Retail Media in these marketplaces means that the popularity of certain products increases and the Chinese market is boosted. These strategies have also been used in other Asian platforms such as Alibaba, Pinduoduo, JD or the incipient Temu.
Thanks to exclusive promotions and gamification policies, certain products are being better positioned and the market is being segmented according to the audience’s interest.
Advertising innovation and artificial intelligence
China is a country that is committed to innovation.. TikTok has been one of the areas where it has made the most of advertising thanks to influencers. In addition, more and more brands are turning to the high visibility of this social network to make advertising investments.
In addition to live advertising, the goal is to create new Retail Media ad campaigns on these platforms and promote products to increase conversions.
As for artificial intelligence, the Asian market knows that it is a good resource to exploit in the advertising field. These tools are becoming more and more sophisticated as they provide results and data is obtained.
The processing of information through AI will facilitate the creation of new Retail Media advertising models that can be applied to audiences. In addition, China can be expected to outperform its competitors due to its economic strength and its large domestic and international niche market.
Asian giants as benchmarks in Retail Media
As a consequence of the emergence and rise of Retail Media, the big players in the online sector have applied this system in their business models, obtaining interesting results and increasing their sales:
Shein, leader in online fashion
Shein has been the fashion giant from China for years. Proof of this are the results that place it as the leader in online fashion in Spain with an 11% market share.. As its impact has grown in Europe, its strategies have adapted to the European business model. It is not surprising that it has embarked on Retail Media as a method to incentivize product visibility in its sales system.
Through the audience segmentation that this system allows, Shein is able to show exclusive ads on social networks only to those who are interested in them. In this way, the consumer will only receive advertising impacts of products that match their interests. In addition, thanks to its system of promotions and coupons, the Asian fashion giant ensures its ability to maintain customer attraction.
Temu: gamification and rewards
In the case of Temu, this e-commerce giant is seeing an increase in the time its users spend on its platform compared to the other major Asian benchmark, Aliexpress. The way to achieve this is very easy: gamification and promotions.
On the one hand, Temu ensures that its users receive the necessary advertising impacts through a gamification system that keeps them connected.. In this way, every day they are encouraged to participate in exchange for exclusive offers. On the other hand, the coupon system that offers discounts on purchases also keeps them attracted to the product.
Finally, the two are combined with a Retail Media system that allows the consumer to view products based on previously visited items while playing. This combination is very stimulating for the customer and encourages a high number of conversions.
Alimama, marketing and advertising solutions from Alibaba
Another benchmark for innovation in e-commerce is Alibaba. This Asian giant has taken advantage of Retail Media to create a marketing and advertising platform that will help boost other business models. Alimama, as the platform is called, provides brands with large amounts of information about Alibaba users.
Thanks to this data compilation system, companies create relevant ads to their consumers and obtain a high profitability of the business. Another case of Retail Media devised with the intention of segmenting the audience and improving the user experience in a less intrusive way.
Conclusion
If one thing is clear, it is that the digital market is moving faster every day. E-commerce giants know that they must innovate in their advertising strategies if they want to reach an overcrowded market such as online sales. This is where the influence of Retail Media comes into play in the Chinese market, where advances are necessary to continue to stand out from the competition.
China is an example of how to adapt to the environment, applying the technological initiatives at its disposal to its business model. As a result, this country is the world’s largest e-commerce, not only because of how it manages online shopping, but also because of how it adapts to advertising surges, making the most of the business.
Just as China does to evolve, it is important to stay informed and innovate to remain competitive. The ability to mimic and adapt to this changing environment is vital for success in the online marketplace.
Retail Media provides new market opportunities that will drive sales for your business, as they are already doing in major global markets. A monitoring system for your own ads and those of your competitors can help you control in real time everything you need to know about your business.
Implementing a Retail Media Monitoring tool, such as flipflow, can help you see new opportunities and make decisions faster. Compiling data from this omnichannel BI suite and obtaining instant insights allows you to control the performance of your advertising campaigns.
Don’t miss the opportunity to ride the wave of evolution and discover how you can get the most out of your business.
