O2O Marketing: The Rise of New Retail in China 🧨

Photo by Lauza Loistl on Unsplash

In the China retail market, only 12% of purchasing decisions happen entirely online. This is according to data from McKinsey’s China Digital Consumer Tends 2019 report. It implies that over 88% of consumers — especially Gen Z and Millennial consumers — make their purchasing decisions through an omnichannel process — both offline and online.

Furthermore, these figures highlight why Chinese retailers are quickly adopting O2O marketing. Online and offline purchasing cycles are no longer separate.

Instead, they have merged to form a customer experience-focused “ new retail “.

What is O2O Marketing?

Online to offline (O2O) marketing allows brands to connect with and reach their consumers and to activate an offline retail experience. Therefore, it encourages consumers to connect with retailers and take their online connection off-line.

Brands can also use O2O Marketing in the reverse. However, because the retail journey begins online for most Chinese consumers, the purpose of O2O Marketing in China is to encourage consumers to interact with retailers off-line as well.

The Advantage of Using This Strategy

The success of online to offline marketing — which is estimated to reach over 150 billion USD in consumer spending by 2022 — depends on the digital ecosystem. Over 99.1% of consumers have access to mobile Internet and spend an average of five hours and 50 minutes online. Therefore, the easiest, most effective way to target this digital consumer is online.

However, the advantages of O2O marketing far exceed increasing sales and profits and extend to other valuable aspects of business, including:

An Increase in Brand Appreciation and Loyalty

Three core factors encourage consumer spending, especially in Millennials and Gen Z consumers:

1. Convenience;
2. Inclusion; and
3. Validation or approval from peers.

An O2O marketing strategy enables you to answers these customer pain points during the consumer purchasing cycle.