How brands are using VR to improve customer experience in ChinaSeptember 7, 2020
Tech-enhanced customer experiences have always had a very receptive audience in China, and as a result, VR technologies are being widely embraced by both brands and platforms.
China has the world’s biggest ecommerce market and by 2020, it will dominate the retail sector also, according to PwC. The sheer size of the country’s retail consumer market is one reason why the rest of the world sits up and takes notice when China adopts new technologies in this sector.
And while the rest of us have been dipping our toes in the VR pool, trying out Oculus Rift headsets at trade shows and testing the low-tech, low-cost Google Cardboard on the relatively limited VR apps available via smartphone, China has been forging ahead with this new technology, putting it to practical use and building a market for virtual retail experiences.
It’s no coincidence that China’s big three Internet platforms (Alibaba, Tencent and Baidu) have all invested significantly in VR, in what is expected to become a market worth $8.5 billion by 2020. these figures suggest that VR is no mere novelty to the businesses that shape the country’s economy.
Alibaba’s Buy+, launched last month, is a virtual reality shopping programme, which allows users to choose clothes and accessories via the headset, assisted by a virtual shopping assistant. It will give Alibaba’s 400 million users access to a VR shopping experience with 3D renderings for hundreds of products, and will eventually allow retailers to create their own VR stores.
While it’s still in concept mode, Alibaba anticipates that the technology will become as central to the shopping experience as smartphones are today, picking up on and exploiting consumers’ appetite for ever-evolving and exciting experiences.
Tencent has taken a different approach in its quest to dominate the VR market by launching its own operating system (Tencent OS) and VR console project – the miniStation. Tencent is focused on China’s gaming community to kick start user interest, and plans to integrate all of its services and apps into the platform, including WeChat and QQ. This will undoubtedly open up all kinds of opportunities for retailers to engage with customers in entirely new ways.
As these ecommerce giants lay the foundations for a vibrant and viable VR market, physical retailers also have their sights set on the growing interest in this technology and how it can work for them.
Suning + Gome
For example, Chinese electronic retailers Suning Commerce Group and Gome Electrical Appliances Holding Ltd have done a deal with HTC to set up around 10,000 VR experience sites across China by the end of this year, including virtual rollercoasters and other adventurous in-store experiences.
Another example is smartphone manufacturer OnePlus. It developed a VR space station to launch its latest handset. As part of the campaign, 60,000 people were ‘beamed up’ to the space station where they learnt about the phone and its features. Within six hours, the conversion rate was an impressive 30%, giving a very promising return on investment.
What these pioneering retailers and retail platforms have learned is that VR has a number of advantages as an experience mechanism:
• It allows them to showcase multiple products in a very cost-effective way – around 80% of the cost of building a traditional, brick-and-mortar showroom
• There’s no physical limit to what VR can do – it’s possible to develop truly innovative and extraordinary experiences which would usually be out of reach. Going into space, on a rollercoaster, under the sea or any one of an almost endless list of scenarios can be developed and delivered to customers
• There’s a huge appetite for VR experiences in China – according to industry analysts Canalys, the country will account for 40% of all VR headset shipments this year, and people are queuing up to try out local offerings from DeePoon, Pico, Pimax, Idealens and, most recently, Xiaomi.
As the market continues to develop, industry insiders say VR in China is reaching a game-changing tipping point. Yang Tao, general manager of Beijing-based VR startup SweetTech, told the China Daily in March: “The market feels like it did on the eve of the first iPhone when it was unveiled in 2007”. Given what happened to the smartphone market in the years since then, this is something retailers can’t afford to ignore.
*Featured image courtesy OnePlus
Elisa Harca is the regional director of Red Ant Asia.