Creating a quality digital experience for the customer: China leads the way

Yu Miyasaka
Executive Manager, Evangelist / beBit, Inc.

Yu Miyasaka

Yu Miyasaka
Executive Manager, Evangelist / beBit, Inc.

China is far ahead of Japan when it comes to providing the customer with a quality digital experience. I would like to take this opportunity to talk about what is happening in China right now, how people’s lives are changing, and how China’s industrial structure is changing as a result. What lessons can Japan learn from China?

Out of a total population of 1.4 billion, 730 million Chinese are internet users. Ninety-five percent of those people use mobile devices to access the internet. While many see China’s policy of blocking of Facebook and Google as a handicap, the government has devised a national strategy to foster its own domestic internet industry. Services provided outside China are purposely excluded.

This policy has created three powerful entities that go by the acronym BAT: Baidu, a search engine, Alibaba, which specializes in electronic commerce, and Tencent, a purveyor of games and communications services.

Tencent’s market capitalization has doubled or tripled this year, and it is now worth more than Facebook. Alibaba ranks eighth in the world in terms of e-commerce. These fast-growing Chinese companies and others, such as Ping An Insurance, now the largest insurer the world, owe much of their success to creating an outstanding digital experience for the customer.

Let’s look at how lifestyles have changed in China. First, there are the leading mobile wallets, Alibaba’s Alipay and Tencent’s WeChat Pay. Already these are the main payment systems in Shanghai, where cash accounts for less than 5 percent of all payments. Electronic payments are the norm not only in convenience stores and supermarkets but with small retailers as well.

You may be surprised to hear that beBit employees in Shanghai do not carry wallets. The city is on the verge of becoming a cashless society. Using an app not only simplifies the payment process at stores, it also provides seamless access to a range of other services, such as Alipay’s Sesame Credit, a social credit system.

Alibaba assigns credit scores to all its users. There are many benefits to having a high credit score, such as having the application process waived for a Visa credit card, and being exempted from various deposit fees. Companies can lower their risk by checking an individual’s credit score before making a loan or hiring a new employee.

The Chinese business model of using big data to strengthen trust between companies and customers is not limited to payment systems. Digitization with data acquisition and utilization is widely applied in daily life, such as when people use a bicycle-sharing or a ride-hailing service, or when they purchase groceries or insurance. China doesn’t use terms like B2B or B2C. Rather, they talk about OMO, Online Merges Offline, a term that describes how offline activities are being superseded by online systems.

It is not so much the data as the customer experience derived from the data that matters. A company will not gain customers if it cannot offer them a good experience. And if it cannot win customers, it cannot gather data. Customer loyalty comes from satisfaction, and satisfied customers happily provide their data. The company can then use that data to enhance their services and offer an even better customer experience. This is at the heart of the virtuous circle that is the Chinese business model.

Japan will eventually enter the OMO world. Creating a good customer experience goes beyond data analysis. The data must be used in surveys and the like to learn as much as possible about individual needs. At beBit, we offer a behavior observation tool called Usergram that helps companies to see their customers’ patterns of behavior. We also advise clients on how to enhance the user experience. China has succeeded in demonstrating that data can be used to paint an accurate picture of every customer. Japanese companies should do the same.

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