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Comment: Chinese market presents huge opportunity for digital commerce

For mobile network operators in China, digital commerce is a huge opportunity. China is the largest eCommerce marketing in the world, and the country's rapidly growing economy, bourgeoning middle class and all-round swift technological advance have formed a firm bedrock for further growth. Moreover, throughout China, mobile is increasingly playing a central role in people's daily lives, and now more than ever, it is at the heart of many innovative commercial solutions.

Setting the scene

Multiple studies conclude that accompanying the rise of digital commerce is a clear trend towards mobile devices. According to a 2014 study by KPMG, in 2012, mobile payments in China stood at $12 billion, which is forecast to quintuple to $41 billion at some point in 2015. The same study also revealed that 55% of internet users in China have made a mobile payment, compared with only 19% in the US.

The growth of digital commerce can bring challenges for retailers with physical stores. As show-rooming continues to grow in popularity, retailers must adopt the technology that allows customers to buy the goods they see in store online, safely and securely. But these new technologies are also able to provide an enriched shopping experience that benefits the consumer and retailer. Many shops and restaurants in China provide free Wi-Fi services, which require consumers to follow the retailer on social media platform WeChat. Connecting with consumers on social media is an invaluable way for retailers to deliver promotional offers to those who are most interested in their products, and keep those consumers loyal. However retailers must be aware of how they use customer data and ensure this is transparent throughout the customer journey, to avoid tainting their relationship with the consumer.

Digital commerce tech in action

A key technology for retailers in China is NFC. Mobile network operators are the main driving force for NFC services in China, and are working to enhance the customer journey from start to finish. With a combined reach of 6.9 billion unique mobile internet subscribers (GSMAi), Chinese mobile operators are in a unique position to offer more consumers mobile wallets than any other market combined.

Other digital commerce services in China, such as Alipay, have further diversified the ways in which a mobile phone can be used to enrich the user experience. Mobile payment, barcode scanning, and the ability to share accounts with other family or close friends have all helped make Alipay so immensely popular. In the last quarter of 2014, Alipay had approximately three-quarters of the Chinese mobile payment market share. Other versatile mobile payment solutions also offer unique ways to enhance the commercial experience. WeChat has conveniently combined financial management with shopping, dining and transport information and services in the same app, and has quickly taken nearly 10% of the mobile payment market share within a year of its launch.

It's clear that Chinese operators and OTT players are leading the way in digital commerce innovation. Earlier this year Facebook announced its new wallet service, new and exciting for the West. But WeChat has already launched its own wallet – with more than 100 million users to date. China's three operators have also all launched NFC services, with more than 100 different service providers including banks and transport companies.


One of the key challenges for retailers looking to scale through technology is ensuring their customers' data and identity are safe. Identity is not only an issue for consumers, retailers also want to know about customers in order to minimise the risk of fraud and be in a position to better target customers with relevant offers and sell more goods and services. For example, by leveraging digital identity retailers can reduce coupon and loyalty fraud. Customers could use identity with serialised digital coupons to authenticate who they are before using the coupon, ensuring the coupon is used as intended and not copied. Additionally, retailers are also able to use information volunteered from consumers to send them relevant or contextual offers and information, foster engagement and encourage a two-way dialogue.

Finally, consumers using their mobile device while shopping, whether in-store or online, have an added layer of protection delivered from their mobile operator. Should a mobile device be lost or stolen all consumer needs to do to virtually shut down their device is to notify their service provider or mobile operator. The operator can close down the SIM using technology enabled through their secured network. This further ensures that customer data is protected and doesn’t become privy to fraudsters looking to access valuable personal and financial information.


In order for innovative digital commerce services like these to continue to thrive in China, collaboration is essential. The responsibility lies with operators, retailers, and service providers to work together and deliver the consistent and seamless service that customers demand. If all parties collaborate well, then customers and staff won't need to cope with multiple processes to make and receive payments, redeem vouchers, and accumulate loyalty points. For these services to thrive and become mainstream, collaboration from all parties is key.

The market for digital commerce in China is clearly ripe for opportunity. Consumers are and will respond to new, interesting and innovating ways in which they can enhance their commercial experience. With mobile at the heart of China's changing retail customer journey, retailers must adapt to stay competitive.

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