One thing Western brands have learned from expansion into the East is that Chinese shoppers are a discerning consumer group. They want genuine quality – fake items are no longer acceptable, value (demonstrated by Single’s Days’ record-shattering sales levels), and VIP treatment.

They also spend a lot of money, with around 250 million of them parting with approximately $275 billion each year for Internet purchases alone. That’s a massive 60 percent of all online purchases in Asia.

It’s a hugely significant retail market, and key to leveraging its potential is the intelligent use of the wealth of data gathered each time a shopper researches a product, visits a store, or makes a purchase.

“Big data” is often a loaded term – it can mean different things to different people, depending on the industry. But retailers have gone some way toward pinning it down and making it useful.

Targeting With Precision 

Perhaps the most important – and profitable – use of consumer data is extracting preferences and patterns of purchase and using the information to offer highly targeted value-added services and products.

For example, Alibaba’s Open Data Processing Service (ODPS), has allowed it to analyze millions of transactions and set up a highly effective loan service for small online businesses. Data from Alipay and Alibaba’s shopping sites, including purchases, reviews, and credit ratings, assesses a borrower’s ability to repay a loan.

The use of more than 100 computing models and around 80 billion data entries has allowed Alibaba to reduce the cost of lending to a fraction of the cost of a traditional bank loan.

Of course, this kind of accuracy in consumer targeting opens the door to clienteling and the personalized service customers in China are looking for – the ability to identify with precision the needs and wants of people looking for a superior service.

For a small fee, retailers can use the might of the ODPS’ processing power to identify trends, pinpoint key demographics, and plan future ranges and campaigns aimed to meet the exact requirements of their customers.

Tracking Rogue Traders

Concern over counterfeit products means that consumers are prepared to pay a premium for genuine Western items, and will choose online stores such as TMall, which have a reputation for trading in authentic brands. However, the proliferation of fake goods is still a problem, and businesses are turning to big data to help tackle the issue. Following a report by the Chinese government, an e-commerce union comprising key online firms has been established, designed to pool vendor data in an attempt to identify rogue traders through their online shops, transactions, and other sales activity.

The amount of detailed information available to sales platforms should, in theory, mean that there is simply nowhere left to hide for sellers with less than scrupulous product standards.

Transfer of Intelligence

According to the Chinese University of Hong Kong, the three biggest players in China’s online industry, known as “BAT” (Baidu, Alibaba, Tencent) are “sitting on a goldmine of big data.”

The potential for cross-industry application is huge – data integration and mining between retail and financial institutions, for example, will drive the future of both online and physical commerce.

Tapping into the skills and experience of BAT – Baidu alone has thousands of analysts assessing data every day – will give retailers and other industries unprecedented accuracy in profiling the people buying their products and using their services, rich in both detail and opportunity.

The bottom line is that, especially for retailers, big data is a big deal. Expect to see even more sophisticated targeting models and customer-centric business operations coming from China over the next year, thanks to the intelligent use of information.