Tag Archives: Mobile devices

TED Talk: China and the Future of Shopping

We all know that technology has changed the shopping experience. Instead of going into brick-and-mortar stores, or in addition to going into brick-and-mortar stores, shoppers now turn to PCs and mobile devices. Not only that, technology has changed our shopping behavior even when we are IN a store. This is true world-wide, but the future of shopping is here today in China.

In this TED Talks video, Angela Wang, a retail expert with firm BCG, explores the broad range of shopping services available online in China. In China, everything takes place on smart phones; 500 million Chinese consumers regularly use their mobile devices for purchasing goods and services. Think about that number – 500 million people. As Wang states, that is the combined population of the U.S., U.K, and Germany! And, all this has happened in only the last five years.

China’s technology firms are also powerhouses. Alibaba and Tencent own 90% of China’s e-commerce market, 85% of its social media, 85% of its Internet payments, along with diverse digital content, video, movies, literature, gaming and more.

Key trends that Wang sees in China shopping patterns are a growth in spontaneity, co-creation of products, ultra-convenience, and social shopping. Using WeChat, the mobile shopping journey in China far surpasses the U.S.

Marketers can learn a lot of lessons from this informative talk.

Group Activities and Discussion Questions:

  1. Discuss with students that while the buying process may vary slightly for different products and target markets, the basic 5-step process is problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior. Is this still the correct model?
  2. Discuss the changes that the students have made in their own shopping behavior. How do they use mobile devices to shop? Map the journey on the board.
  3. Show the TED Talk video. Make sure students pay attention to the end of the talk when the shopping journey is explained (9:00 minute mark): https://www.ted.com/talks/angela_wang_how_china_is_changing_the_future_of_shopping/transcript
  4. How does the Chinese shopping journey compare to the traditional U.S. consumer model?
  5. For a product, have students work on the actions taken in each of the five steps in the traditional model. Then have them work out the steps of the Chinese model.
  6. Debrief the exercise.

Source: TED Talks

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World’s Largest Online Retail Shopping Event: 11/11 Singles Day

Once again the world’s biggest shopping event has occurred. And, no, it’s not Black Friday and Cyber Monday in the U.S. By far, the biggest shopping day of the year was on November 11, Singles’ Day, in China. (The holiday originally began in 1993 as a celebration for people who are single, chosen because of the connection between singles and the number ‘1’. November 11 now serves as an occasion for single people to party – and shop!)

This year, sales reached more than $8.6 billion in the first hour and passed 2016’s total sales by noon! By the end of the day the gross merchandise value tally was more than $25.3 billion, an increase of 39% from 2016 sales! Even more impressive though is that a whopping 90% of sales were completed from mobile devices (compared to 82% in 2016). At its peak, Alipay processed 256,000 transactions per second.

Singles’ Day is by far the largest shopping and entertainment festival in the world. Consider that it is 18 times bigger than Amazon Prime Day, and 2.5 times bigger than Black Friday and Cyber Monday combined. This year there were more than 15 million products from 140,000 top brands and companies. Top countries selling to China included Japan, U.S., Australia, Germany, and South Korea.

Singles’ Day has become an event on its own, including celebrities, fashion shows, TV galas, virtual reality, and augmented reality shopping. Companies engaged in a “Catch the Cat” augmented-reality game that engaged customers and offered discounts. There were other games as well, including an interactive trivia game on Tmall and Taobao apps. In addition, Alibaba offered viewers a televised gala that featured international stars including Pharrell Williams, Nicole Kidman, Jessie J, Maria Sharapova, LeBron James, and Zhang Ziyi.

Why is it so important for global brands to enter this shopping day? Consider that there are roughly 300 million middle-class shoppers in China, rising to an estimated 500 million in the next 10-15 years. While Singles Day may have originally started for lonely Chinese consumers, the shopping day now is seen as critical to driving China’s – and the world – economy.

If you are not familiar with Singles Day, there are a number of Web sources with information about the event and Alibaba, including the following:

Group Activities and Discussion Questions:

  1. Most students will not have previously heard of China’s Single Day. Discuss the shopping holiday and its importance in China.
  2. This is likely the first time students have heard about Singles Day. There are a number of videos that can help explain the event:
    1. What is 11/11?  https://youtu.be/bRv9qG75x2c
    2. Singles Day: https://youtu.be/uDDy50RP67A
    3. An American at Alibaba: https://youtu.be/7ZxM_HaEWBI
    4. News reports: https://youtu.be/gwGGrLpUkdg
    5. What is Alibaba: https://youtu.be/gk69hV6LEgI
  1. Discuss how this holiday compares to Black Friday and Cyber Monday in the U.S.
  2. How should U.S.-based companies participate in Singles Day?

Source: Brandchannel.com (2017, Nov. 13). Alibaba’s 2017 11.11 global shopping festival passes $25B.

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iPhone X – Premium Pricing

Apple introduced not just one, but two new models of the iPhone this fall: iPhone 8 and iPhone X (ten). Sure, companies often introduce multiple new products at the same time, but rarely do they introduce products that are so similar in scope and use. Why did Apple introduce two models at the same time? Easy – two different models are for two different market segments.

At a price of $999 (64 GB) and $1,149 (256 GB), the iPhone X is Apple’s first premium level iPhone model. And, since it has leading-edge features unavailable on any other smartphone, it seems to be targeting the early adopters and tech enthusiasts who are not price sensitive.

What does the iPhone X have?

  • 8 inch screen takes up the entire face of the device
  • OLED display for thinner, brighter, viewing
  • Face ID infrared facial scanning

The strategy seems to be working. After only a few days of pre-ordering iPhone X online, delivery times are easily two months away.

Are you planning on buying one?

Group Activities and Discussion Questions:

  1. Pricing is usually a complex topic. Discuss the six steps for pricing (determining objectives, estimating demand, determining cost/profit relationships, select price level, set list price, and make adjustments).
  2. Discuss the various pricing models in class: demand-oriented, cost-oriented, profit-oriented, and competition-oriented.
  3. Show iPhone X: https://www.apple.com/iphone-x/
  4. Show CBS Video: https://youtu.be/haj5nV6Muhw
  5. For iPhone X product, divide students into groups and have each group work on any/all of the six steps.
  6. When setting the price level, assign each team a different model to use (demand-oriented, cost- oriented, etc.).
  7. Debrief the exercise. Compare the various pricing models and discuss advantages/disadvantages of each.

Source:  New York Times, CBS, other news sources

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