Digitization in China and how it is impacting Customer Experience | Teleperformance
Digitization in China

This article was written by Bin Zheng, VP of FSI.

China has experienced a wave of digitization that is possibly more advanced than anything seen in any other market. The combination of messaging, online retail, and payment systems that are now commonly used by Chinese consumers is certainly more advanced than most consumers in the US or Europe are using, so how is this wave of digitization changing or affecting the customer experience (CX)?

Take the example cited in a recent edition of China Daily – a young mother living in Fuzhou and experiencing smart technologies all around in her city and home. The lamp posts in the street feature SOS buttons so she can feel safe when out alone at night. The elevator at her home will only operate when it recognizes the face of a resident. Her apartment has automated fire detection systems. This concept of a ‘smart’ lifestyle is becoming normalized in China far quicker than other global regions.

Electronic payments using a mobile device are a good example of a technological advancement that is directly changing the customer experience. According to data from McKinsey, China now processes 11 times the number of mobile transactions that are processed in the USA. That’s not just a small difference – it’s a game changer.

At a conference last April in Fuzhou, companies such as Tencent displayed the systems they intend to be promoting in 2019. Tencent displayed a retail store where each customer is recognized using a facial scan on entry. As they leave, the products are charged to the account of the customer once again by authorizing payment with a facial scan.

Other technologies such as the Internet of Things, 5G, and autonomous vehicles are also progressing far more quickly in China than in the US. The direction of travel can be clearly seen in the value of ecommerce in China. At present over 40% of all global eCommerce takes place in China – a decade ago that figure was just 1%.

China has more Internet users than the US and Europe combined and therefore this leads to more market experimentation and innovation because the market size is so large. Over a third of all the global startup unicorns (companies valued over $1bn) are from China.

The trio of Baidu, Alibaba, and Tencent (known as BAT) are stimulating the market beyond just encouraging customers to use their own products. In the US major technology companies such as Amazon, Google, Netflix and Facebook are responsible for around 5% of Venture Capital investment into new startups. In China BAT is responsible for 42% of investment meaning that these three companies are dramatically influencing how the customer ecosystem is evolving.

The Chinese government has also given these companies room to experiment and innovate. Although the government has a reputation for regulation and control, they see the value of leading the world in technology innovation and have been active supporters of this sector.

Digitization has created an environment where customers can browse, seek out information, purchase products, and pay all using their mobile device. Inside stores it is now rare for companies to accept cash and even credit cards are used far less often because the ecosystem allowing mobile payments is so advanced.

I believe that China is showing the way. Markets such as the US will grow quickly and brands need to visit China if they want to see how digitization is really changing the complete customer experience.

Let me know what you think about some of your own digitization experiences in China. Leave a comment here or get in touch via my LinkedIn.

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