Find here the China paradigm episode 17. Learn more about Eliza Mao’s story in China and find all the details and additional links below.
Full transcript below:
MATTHIEU DAVID: Hello, everyone. I am Matthieu David, the founder of Daxue Consulting and its China podcast China Paradigm. Today we are with Eliza Mao. So, you are business development or customer success director?
ELIZA MAO: I am the Customer success director.
MATTHIEU DAVID: The Customer Success Director of SPLIO. I mixed with your previous, I think, position you had at SPLIO initially. So this Customer Success topic within SPLIO; it is a customer platform in China, a company with 5 offices as I understand in the world, about 500 clients and a team of 130 people. A lot of funding I found online like 10 million yuan of funding and in China for a while, you got funding from DPI, Armundi, BNP Parisbas. For those who are French, they know about it. For those who are not French, it’s a bit less known, but they are pretty famous investors, actually in France. Splio has acquired recently a company called Gowento if my information is correct and what SPLIO is doing is about designing and managing a loyalty program in China if I am correct and this is something I would like to understand better? How much of the software you are, how much of the Saas you are, and how much of a service company you are.
To be totally honest, initially, my idea of SPLIO was a mailing list. For me, it was about managing emails, managing mail lists a bit like Mail Chimp and then one day I looked at your company more precisely, and I saw like it’s much bigger actually. It’s a technology program, and I want to understand the changes as well. I feel it has changed over time; your focus and I feel the topic is much larger than it was initially. So thanks Eliza for being with us today and feel free to correct anything I said which was not correct.
ELIZA MAO: Ok so SPLIO is a software company. We provide a Saas platform. We originally yes, we started from email marketing automation, and now it has extended. We have brands first to understand where they buy, how often they buy and we help brands to build and orchestrate omnichannel journey in China because mainly before we used to e-mail only to connect to consumers, but now with technology advancements and especially in China there are so many touch points. And we get direct access to customers, and we need to really work on their attention and on top of that we provide end to end expertise for helping brands to build their strategy for their CRM strategy, their data integration part and also the daily operation.
MATTHIEU DAVID: Ok, could you tell us about your business in China? How many clients are you working within China? I’d like to have an idea on the size of the sector; a better view of what you do in China currently.
ELIZA MAO: So in China, we are working mainly with B2C clients, retailers in fashion, cosmetics, skin care. We help them either to build their loyalty program in China from scratch, or they might already have a loyalty program in China that is set on a global or is set a long time ago with no change, and they might still use the e-mail as a key in their global system. So we help them to adapt their loyalty program in China using the right channel to talk to the Chinese audience in the way that they prefer.
MATTHIEU DAVID: I see. You say ‘’adapting’’, ‘’adapting from the West to China’’ what are the first initial steps to adapt, for foreign brands, for overseas brands; it could be whatever. If you think there is a differentiation between European and American then it could be interesting as well, but what are the first steps that a company has to understand when it has to adapt its loyalty program in China, retention program?
ELIZA MAO: Well first I think the main challenge is on the omnichannel journey in China, on the data part because compared to other markets, China has more touch points and people use different communication tools. Like for example in China, WeChat is the main engagement channel, and people rely heavily on WeChat, for both online and offline and they need to bind the customers including their purchase, including their actions and behaviors. They need to bind every purchase and action behaviors into one single customer view and make sure that their loyalty and user journey is at the same level wherever the customer goes. This is the first thing.
MATTHIEU DAVID: When you say there is more touch point, why do you say that? If you say that about China, I immediately think about the QR code. If you look in the West, you have apps in the West, websites in the West, retail in the West, but the thing which is big in China which is very small in the West is QR code. What do you mean when you say we are more touch point? Is it more than QR codes? What is it?
ELIZA MAO: I think well first of all in China you have WeChat and in WeChat you have many services. You have mini apps, and it’s not only a communication tool. It is a service portal that connects brands to a customer that you don’t have anything that’s out of China. Also, there are different social platforms, and they have different marketplaces in China. We have Tmall, JD.com and they have a strong traffic with KOLs their campaigns. People read a lot of recommendations, and people will go to those platforms to check for this, and they go to their online Chinese store to purchase as opposed to offline to experience.
MATTHIEU DAVID: I see before we dig deeper on the different touch points, I would like to focus on one specific thing. The one you worked on specifically at SPLIO as far as I understand mailings and when I arrived in China it was 10 years ago and I started my first business ages ago, and I realized that people were not receiving my e-mails. The segmentation about promotion e-mail, about an e-mail from friends and so on was already sophisticated by people like Gmail now, and that was already the case by 6 or 7 years ago when you were promoting some businesses people were not actually receiving it because I was going in a very specific mailbox. It would not open. What is your view on e-mailing currently? Is e-mailing necessarily bad in China or there is still something to do with e-mails?
ELIZA MAO: I wouldn’t say e-mailing is dead in China. I think in some industries people are still used to using e-mail, especially when you book tickets or when you go to travel. So for specific industries this is still needed, and people want to read it in terms of e-mail because it has no content and it has no display especially on the top, but in others; in ours the speakers of usage of WeChat or SMS and the change is going that in our link for some promotional retails is much lower than this and you now actually it is not in the dream of Chinese people. People don’t think of e-mail as their main communication channel.
MATTHIEU DAVID: Yeah I think that’s the thing. Before we… when referring to this talk or this situation I was thinking about what people were doing or what Chinese were doing initially when you had… you didn’t have WeChat, and you had e-mails so does it mean that the primary reach toward Chinese clients like 6 or 7 years ago was more SMS, direct calls as much as e-mails? Would you say that Chinese from the origin has not been used to actually interact that much with e-mails so what reached the clients initially 6 or 7 years ago?
ELIZA MAO: Honestly speaking the whole CI concept is new in China, and with the explosion of the mobile and the technology this kind of CI grows with the communication boost. So it’s not about, “Okay we used to have lots of… and it is gradually becoming using SMS or WeChat.” In between this, they grow at the same time, and people are jumping into this era.
MATTHIEU DAVID: I see.
ELIZA MAO: because the e-mail was mainly connected with their websites and not like the current ecosystem like it’s all connected.
MATTHIEU DAVID: Let’s now look at the trendy parts of engagement with clients and customers, which is mini-programs on WeChat and those who don’t know much about the industry in China. Mini programs are programs made within WeChat which can be responsive enough, which can be open with functionalities, mobile payment and so on from WeChat. So have you been able to integrate with your software mini-programs and all those different touch points you were talking about to our audience and so on; have you been able to bring this western tradition within the ecosystem with the API of WeChat and so on and how have you made it?
ELIZA MAO: Yeah so we are a global company with the global solutions compared to other big players yeah, we are more adapted to China because we have or are connected with the local ecosystems and including the native connected there on WeChat.
We are doing tuition with a multiple service count and multiple mini-apps so we can chat all the users and followers on the WeChat system and connect them to their online and offline purchases including their Tmall, JD.com including from their posts and basically every interaction that you can track. It can be consolidated into our customer platform in China to have a single customer view, and we can design the user journey using different touch points.
MATTHIEU DAVID: I feel that you are talking online or on video or YouTube, not yourself, but SPLIO about Spring. Spring is a software you are using? Is it?
ELIZA MAO: The toy that we used to call Spring, but now we want to have a single way to have the same name as the company name so
MATTHIEU DAVID: So it’s SPLIO now. I see. I looked at a video, and within the video, we can see that you can indeed track from every client, the profiling of every client and so on so individually you were showing the age, what this person bought and so on. What can you track in China which is different than what you can track in the west? We are talking about WeChat of course; we are talking about interaction with Weibo. How does it materialize into the platform? What additions?
ELIZA MAO: Well basically WeChat hasn’t really used it because as I said it’s not only a communication channel; a personal communication channel, but you have a brand service account and an annual service account you can link your main apps as a different service, you can have tour reservation system, you can have your e-commerce. You can have an e-commerce channel, and you can have our membership center embedded on your WeChat, and you can also have different pages.
Other than that you have the different type of messaging through your service account including your customer service, including your broadcast if your service account is once a week and including your tempted message; you can… meaning you can react on a 48-hour window once the follower interacts with your account. So this is already a lot of things to track. You can track a lot of their reaction to your campaigns. They are interested in your post, and they are interested in different services.
MATTHIEU DAVID: I find that what you are saying is that WeChat is actually a very easy platform to get information from the client, inputting itself. You are not leveraging WeChat with what we have put as comments and so on. This is what the client asked, put them into your customer platform in China through the mini-program because WeChat is actually very close to every Chinese because it is the app that they mainly use. Correct?
ELIZA MAO: Yeah, gathering information s, but also our one on one communication. This can be done through a segment of broadcast or messages, or most people are still doing the broadcast or followers with the same mail broadcast every week and then I think this trend should be because the older it is getting lower and lower because it is quite crowded n WeChat and we always recommend you use the segment groups for… we want to understand your customer’s personalized service and relevant information to keep them thinking that you are adding value to them.
MATTHIEU DAVID: A quick question: I remember that segmentation was limited to like 5 or 10 groups before in which it was limiting the segments. Is this the case?
ELIZA MAO: no. On our customer platform in China, you can leverage the function of target modules so you can segment into different or as many groups as you want. You can use all the information of the followers if you can get if they are already bound and you can use their purchase information for other channels; or if they have bought at a certain level offline. All this information can be used for segmentation and communication on WeChat.
MATTHIEU DAVID: Okay talking about your cases. I looked at two documents you have online; loyalty guide and logic tool kit, and I saw a lot of western cases, but they have not many Chinese cases. Could you tell us about some Chinese cases that you have worked on and you would like to emphasize on how to design the loyalty program in China and actually it has been implemented after?
ELIZA MAO: I think because this whole CI loyalty; if you are trying to buy online, on Chinese online stores, the loyalty is quite limited because it is quite new with all the known brands and local brands grow.
The most successful ones are big players with different types of logical for example, they pay their logic remote, the biggest online payer is Sahara doing great including JD+ all the video platforms and they have resources, and they have ways to play different games. They have to cooperate with different platforms, and they really provide really exceptional service, but brands can learn a lot from those players as well.
For example, JD+ have reached above 10 million numbers, and they have a very high renew rate above 80-%. That is quite close to Amazon Prime, and if you look at all the service they provide you can see they really understand their customers and you know they have already done a good job on their delivery on the logistics so they have to invest more to increase the gap between their member and their normal customers, so they have an option in the IT to do the online delivery, to pick up and return. So they really think about what their customers need and putting a competitive advantage in their service for their customers.
Also, there are some offline players like Nike, who is doing great with the community approach and which is really focusing on offline. They do a lot of tailor-made loyalty programs in China. They give real autonomy for their locals to add the differentiators so that they can follow people. This is something that a lot of brands can learn from. They can have a base loyalty program form global, but they need to give autonomy to the local to adapt to the local customers and cooperate with the other platforms that have the resource.
MATTHIEU DAVID: When you say cooperate I saw that more and more brands are afraid cooperating with the giants like Alibaba especially. What is your feedback on that because you say to collaborate, but how can you collaborate with someone who has all of that? How can you collaborate with someone actually has all the power, and if you don’t spend marketing on his platform, you are not going to drive traffic? What’s your feedback? What is your analogy on this?
ELIZA MAO: This would depend on the traffic. If they really have a focus on their Tmall data or not; because Tmall is still traffic; a traffic place for e-commerce and usually more than it can be 40-80 and for some brands on Tmall; more than 80% of their customers are new customers, and it’s not… you cannot say it is a loyal customer base and you need to really work a lot to engage with those Tmall customers.
How do you connect to them because usually people spend 1 purchase on Tmall and these are not loyal on that because they just try new things and they are not connected to your brands, and you need to make sure that you leverage the benefits from those giant ecosystems; with ALI, but you need to make sure that you really have your strategy and make sure you have the private link to your customers and give them an Omni-channel journey in China.
MATTHIEU DAVID: And to think it is difficult to get a direct link on Tmall.
ELIZA MAO: yeah that’s why you need to have a place where you can have like the interface with your end customers and not only Tmall to do… you can use Tmall to do your promotions, and you can work with them on different campaigns to get the traffic, but after those customers buy how do you connect with them? How do you want to communicate with them using your advanced strategy? That is the key point.
MATTHIEU DAVID: Okay. You talk about Nike as an example of a good case of loyalty program in China and retention programs; would you like to be a bit more specific about what they have done in specific cases you think have been successful or inspiring?
ELIZA MAO: So Nike; they don’t have what we call a typical consent here. They have a community approach. They have the Nike Plus app, and they want to put all their customers into communities into their own platform with all the courses, with all the training, and they don’t do that like promotion communication like you need to age this product or that. They just have the people with the same interest, and they want to grow this thickness and belonging to do a lot of community advancement, and it takes lots, and it’s not something that everyone can do. You are creating a community, and it takes a lot of resources, but we can show that because also like brands like the customer, they are also trying to do a similar thing. It’s quite a way to grow the younger generation, especially Nike.
MATTHIEU DAVID: So basically, you are analyzing that generating the retention program through the creation of the community and more specifically through apps; many, many mini-programs actually in China. Are you talking about the running app of Nike?
ELIZA MAO: Yes.
MATTHIEU DAVID: Okay I see
ELIZA MAO: Also they have different campaigns; different seasonal campaigns that are brought by mini apps and linked with their account so they have a different challenge that they gather people and they invite friends to participate.
MATTHIEU DAVID: I see and when you have this mix of offline and online, like an app running a Chinese online store and then you want to drive… you are going through your phone, and you want to sort of drive to your shop afterward. How can SPLIO help? How does your software help in connecting online and offline? You are talking a lot on your website about Omnichannel journey in China. If I can ask you to be more creative about offline and online, how does it work with very specific cases?
ELIZA MAO: So we help brands to bind their customer data. We can use loyalty programs in China as an entry, and to make sure that every customer goes to offline when they go online you have the delivery; you have a list of numbers. Usually in China we use mobile phone as a unique identifier, and you have your solar database once you are identified, we bind their phone numbers through a mini app or a service account, and you bind using the unique identifier to bind all their purchase and their actions and also if you the offline or online events you can tag them into the customer database.
MATTHIEU DAVID: Ok, so does it go through a QR code in China? How do you do?
ELIZA MAO: If it is offline you can have a QR code to easily access your service account or your mini app or the membership loyalty program in China to incentive your customer to join the membership program, and if you go to carry out campaigns you can also connect them to your membership. So you can identify all your new recommends through any channel you can to track the source of your follower base and membership scores and then you have all your purchase for offline and online; a one day purchase and you want them to uninvite themselves so you can accumulate all their purchase histories.
MATTHIEU DAVID: I see. In order to understand better the clients, B2C; are you still using what we call GSP, BMP? They are fitting platforms that are immerging platforms; is it mature enough in China? Is it something that you are using, and is it an industry that is actually effective? There are a lot of questions about GSP. I don’t know if you are using it for your clients?
ELIZA MAO: So, we work with a partner who is focusing on those areas that some customers; they want to build a DSP on themselves and our customer platform in China is connected to that, and we are very focused on customer data so we provide a reporting business the intelligence on the customer data, and they can extract those segments, and they can do their own analysis and integrate with their own systems.
MATTHIEU DAVID: I see and what about DSP (Demand Side Platforms)? Have you been reaching the data of your clients through DSP in China? Is it something you feel that is important?
ELIZA MAO: Not in recent cases. Usually, we work with Pandas on that, but we are not a director in charge of that area.
MATTHIEU DAVID: Okay. Recently, SPLIO was a speaker at Turner Connect, which is a conference about e-commerce, about consumers in China. Would you mind sharing some of the key findings you have been talking about?
ELIZA MAO: So it’s mainly about China and China ecosystems and how to do a loyalty program in China and what are the things to do and what are those things to avoid.
MATTHIEU DAVID: Okay, so what are they? Maybe we have already covered some of them.
ELIZA MAO: Yeah so, for example, we already talked about WeChat, we already talked about… and also China or Chinese consumers are a bit different from what we usually see in Europe and we need to understand that the Chinese customers are now in a phase that they are very enthusiastic to try new things, very enthusiastic in reading all the reviews and recommendations as well and that is why we always say when you enter China you need to make sure your QL strategy is right, you need to make sure you are talking to your customers with the right message and also personalization is very key. You need to have different strategies for your new customers and your existing ones. Essentially when you do loyalty, compared to out of China, Chinese people are relatively less sensitive on the data and especially with the easy registration process, it is not that hard especially when you have an offline presence.
The recruitment conversion rate can be high when you give them the immediate attractive benefit right away and with a simple process, but also Chinese; more than half of them don’t know the difference between the different loyalty programs, and you need to work on the retention part. How do you make your loyalty program in China standout? How do you make your end-user have a deeper experience to know that this is adding value, and they want to keep engaging with your loyalty program in China?
MATTHIEU DAVID: I see. You are talking about a member, and I would like to have an idea of how to compare with the west, and in your presentation you said that 5% of engagement in retaining clients could increase by 55% profit of the company which is basically maybe 25% of cost of acquisition in the client so you don’t have to pay it anymore so maybe you increase by 25%, actually; your profit. Would you be able to share some data about the opening rate, about basically engagement on the loyalty campaigns in China compared to the west?
ELIZA MAO: You mean for the marketing loyalty campaigns in China?
MATTHIEU DAVID: Yeah for the loyalty program in China and retention.
ELIZA MAO: So it really depends. It depends on your budget, on what channel and what kind of promotions and if this is… it can be really high. For example, if you have a client who is doing a WeChat campaign using the campaign, it can be a percentage of their progress, and it can amount two or three times more than the average. Also you…
MATTHIEU DAVID: 10% commission rate, or are you saying 1000 interactions? I mean precertification? You have 200 people buying.
ELIZA MAO: Yeah, but they can be a small audience.
MATTHIEU DAVID: I see with the communication on this push notification; I remember that some time ago a lot of discounts. Do you feel there is still a lot of discount or its unique products to buy, which makes it that there is some scarcity of the product? So your basis is buying it because your window opportunity is very narrow. Is it more about the price; the price is lower? Is it more about the novelty? The product is new or what is the best interaction in China you have seen so far in terms of the number of sales?
ELIZA MAO: Usually if you do the campaign on WeChat we suggest that you do the customized product or the seasonal ones or the co-branding in China because you need to have something different from other online channels, like online Chinese stores, and with the brand house campaigns and you can be a pop-up, it can be a pop-up store on WeChat that people think this really speaks to them with their QL’s and they cannot buy it anywhere, but also there have to be promotions related if it is more about the equipment.
MATTHIEU DAVID: Sorry, go ahead.
ELIZA MAO: New followers; they focus on more on recruitment because we want to sell some discounts or promotions, but for your new products or existing customers, customer boost is still a very good and attractive way to do some customization, do some highly exclusive events to some co-branding products.
MATTHIEU DAVID: So a pop-up store on WeChat; is it an H5 website? Is it a website dedicated to this event, this purpose? Is that what you call a pop-up store on WeChat?
ELIZA MAO: Yes this is a pop-up store on Wechat, and it also can be a mini app.
MATTHIEU DAVID: Okay, I can be a mini app; any program within WeChat. So this is basically again a platform or a format dedicated to specific events. That is what you call a pop-up store on Wechat?
ELIZA MAO: Yes.
MATTHIEU DAVID: And not the brand works of it, I see. When you say co-branding in China, since I was in China, I saw a company named Disney doing a lot of co-branding in China, teaching in Taiwan. I’ve seen some major companies doing co-branding, but which ones have been so far very successful for you? I am not sure all of them have been very successful. Which ones would you see are very successful in co-branding in China?
ELIZA MAO: When I say co-branding in China I mean all of them… for example, if you do some loyalty; the benefits and the award can be the co-branding in China for that and not only you need to have the really the big co-branding product. You can have the design part as a co-branding effort.
MATTHIEU DAVID: Sorry, what do you mean by design?
ELIZA MAO: I mean, we see a lot of brands doing their co-branding design.
MATTHIEU DAVID: Okay, I see so there is a designer that is working together on the product. I see. I understand; designing the logo, designing and putting together the product.
ELIZA MAO: Yes, it’s more of a marketing campaign like Unigrow is doing lots of work and many efforts with other brands and
MATTHIEU DAVID: Okay, I am taking some notes of what you say to go back on it. What would be a bad conversion rate in China? You said 20% commission rate for so many clients. On the other hand, would you have some numbers about the average conversion rate you should expect when you engage a loyalty campaign in China; an engagement campaign with your current database of clients? Do you have metrics?
ELIZA MAO: I think, and as I said it really depends on the different industry, your different strategies and if you have really a big focus on offline, I think offline conversion rate can be much higher because you have offline stores. You have the staff to promote, and for example, if you are in fast fashion that mainly has 80 or 90% from your offline you can have 80 or 90% of the normal rate, and with the 5-10% it’s already on the redemption rate, and it’s already very good and if you have a very strong focus on your online mainly your Tmall or your WeChat store, 5-10% normal rates is already good and then we require a much higher participation on redeemed rates to have efficient loyalty campaigns in China.
MATTHIEU DAVID: Okay and in terms of frequency, do you have some directions when you meet with a client on the frequency of campaign you should organize or how often should you be in contact with your client? I know that the campaign in terms of the industry I believe that if you are in a fast industry, it would be every day to offer them lunch or something, but maybe to pick one segment like frustration or I am not the one you are familiar with. What frequency would you advise?
ELIZA MAO: As you said it depends on the customer purchase frequency and firstly we usually suggest that clients that do their consolidated data because usually they don’t have a consolidated view of how often their customer buys and we help them first to have that because you might only get data that they go to your store, but they don’t know that they actually track your other channels very often and once you have that you understand that is your customer base; maybe you think your customer is buying from you one in three months, but actually they look at your products before they go to the second purchase they are already checking on the second ones.
So this is something that we help brands to improve for example, Skin Care once renounced and at which stage you should give them a communication to especially when you know what kind of product they buy and what kind of information they are looking for and what actions they already show interest in their WeChat service account and you can incentive them with the promotion, but also give them information and advice that they should be interested in the regular basis. That is the whole process of designing using touch points.
MATTHIEU DAVID: I see, going back on the methodology you have. I think it’s very interesting. You are looking at how many times a current customer is going on the website and are interacting with the app and every touch point you were mentioning and say, “Oh, the customer isn’t coming very often, but you do a campaign call every 6 months, so maybe we can consider a campaign every 2 months because they come 3 times every 6 months, on average.” So basically they interact with you 3 times, so they are looking for information 3 times. Is it a correct understanding of what you are saying?
ELIZA MAO: Yes, so including their purchase and including their actions. So if they buy on offline and then buy on Tmall and they buy n your JD before you don’t know they are the same person and now once they are bonded, you know that they buy in different channels, but they might go to one place to look for information soon the WeChat on the broadcast you also can track if one of your customers is really sharing and are kind of the ambassadors of your brand, and you can know that they are interested in which type of product also. You can react to that.
MATTHIEU DAVID: You are tracking the identity of people through the phone is what you are saying. When you say the phone as an identifier, is it the phone number or is it the device?
ELIZA MAO: It is the phone number as the identifier, and if they are not bound it will be their ID of the service account or the UNI ID of the mini-app usage because you can identify them as one follower between the service accounts and the mini apps.
MATTHIEU DAVID: Yes. Alibaba has been commercializing a new way of tracking the users, which is this unique identifier from Alibaba. Alibaba for being present so much over the web that they have been able to collect and actually align all the information and correlate all the information of one person all over the web. Have you been experiencing the information from Alibaba?
ELIZA MAO: It is mainly about your loyalty campaigns in China, and we work on the first candidate mainly and Alibaba currently; they don’t give you all the information. They are holding the data.
MATTHIEU DAVID: but they can target for you. They tell, “We will target those people very quickly because we have all this data, but we keep the data.”
ELIZA MAO: Yes, exactly.
MATTHIEU DAVID: Okay, I see. Do you have to retain clients; your clients to not to do too many loyalty campaigns in China? Do your clients tend to want to do too many campaigns, or are it the opposite? What is your feeling about usually brands and interaction with customers; do they want to do too much or too less interaction?
ELIZA MAO: I want to say too much. I will say they still want to do them… they still don’t put enough efforts on their personalized loyalty campaigns in China. They want to do broadcasted to all. They want to have their regular campaigns to all their audience to make sure that everyone gets the information, but I think this is also risky in some cases because you abuse the communication that customers might get annoyed.
MATTHIEU DAVID: In terms of personalization; it has been hard sometimes now that it’s not as hard as before. Re-targeting has been hard in the west, and I saw that you are using for your own use UpStaff in order to do some marketing information with your own clients. What are the tools that you can use in China? Is re-targeting big in China? Are tools existing to re-targeting and easy to use and much as a Facebook pixel, as much as LinkedIn pixel? From my own understanding so far, it is not as easy in China as it is in the west to re-target your clients by putting a pixel in your website. What is your view on that?
ELIZA MAO: Yeah, I think it is also growing in China. There is also the… it is kind of similar to Facebook that you can upload your data to do re-targeting, and there are some agencies who are trying to do the re-targeting with the customer base and the media data. The train is for sure going… that is key I think for the next phase of the big data.
MATTHIEU DAVID: So look at a campaign for… we don’t know what it is or it’s a word from Facebook where you upload the data from your current customers and you re-target them on Facebook because Facebook has all that data regarding everyone, so you are able to upload the e-mail and then find the person on Facebook re-targeting your message. Which platform is now offering that in China?
ELIZA MAO: Tencent.
MATTHIEU DAVID: Tencent is doing that now in China, and Alibaba is doing that also, or it’s mainly Tencent?
ELIZA MAO: Mainly Tencent who I know.
MATTHIEU DAVID: Mainly Tencent; interesting. So another topic in terms of engagement and retention with clients which has been big in the west, but I do not see it in China yet, so that is your topic. We talk about innovation in China a lot. Now it is innovation from the west which I do not see in China. It is all the subscription-based models like bit box where you receive a sample. You try it and then you can buy the product. Have you seen something happen in China; this new way of interacting and testing a product? So to remind people what they are saying to us.
The Box model Subscription based model is you receive a sample; like every month you will receive a sample; a lot of cosmetics to try them and then you are able to purchase them on the website actually of this box; this box website and offer discounts and offer a price. Have you seen something similar in China?
ELIZA MAO: To describe it; they were doing the play box out of China in the US, which is quite successful. In China, I have not seen successful cases like that that have to pay a vast fee on the box of samples, but a lot of brands who do the sampling like a gift or additional benefits for their status of the members and knowing that it’s not yet paid boxes. It is not yet the thing that the customer really wants to buy. I don’t see it as very high conversion in the beauty sector.
MATTHIEU DAVID: What about sampling samples?
ELIZA MAO: Chinese love them, especially there are a lot of skincare brands who use the sample to recruit members. It’s a very good trend because people can try and especially when you buy a certain type of product that the brand has, and they want to extend their product to a promotion that was sent with the sample of another product line for customers to try.
MATTHIEU DAVID: I discussed with a brand some time ago I thought 4 years ago; a very big brand and they were saying that when they arrived, online retail in China was not as developed as now; the retails were using the shop; the sellers in the shop were using the samples to be like a discount, so they were saying, “Oh, buy these products. I will put these samples in for you, and you get more, actually.” Have you seen the use of samples being more mature with a rich strategy on it and how do you use samples with online channels, like online Chinese stores, because you still have to send to someone the sample to try? Have you seen anything happening, or is it still mainly offline?
ELIZA MAO: Online is the same when you buy, and they will have different use on given what kind of samples and sometimes they use that as an incentive. If you buy this amount, they will give you a nice bag with different small samples. It is already a very common online tool, often used by online Chinese stores.
MATTHIEU DAVID: okay a little bit like a discount or get more for the same price and less about a trial, a test of the product?
ELIZA MAO: It is also about the trial because for some brands they want because on Tmall usually, we buy the hot product of the brand. We don’t know much about this brand, and this is very crucial when you can add your product sample of other product lines to promote your product and not only on the one product sales push.
MATTHIEU DAVID: I see okay. Thanks so much for all this sharing of all this information and if you would like to add to the audience who have listened to the interview about SPLIO, customer platform in China and about engagement and loyalty programs in China.
ELIZA MAO: I would say the key message is the successful loyalty program is not only to build your purchase behavior, but also to build a positive attraction along the journey that is willing to invest efforts in every touch point and to make sure that the level of service is the same in the Omnichannel journey in China.
MATTHIEU DAVID: Yeah which is not easy and we have seen a lot of brands that disconnect between offline and online and the same client can be in a shop and going online and not connecting; still a problem in 2019.
ELIZA MAO: Yeah.
MATTHIEU DAVID: Thank you very much, Eliza, for being with us today in this new episode of our China business podcast, China Paradigm, and I guess we will see the video very soon. Thank you very much.
ELIZA MAO: Thank you very much. Have a nice day.
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