• 08-JUL-2015

Xiaopu: set up and run a Taobao store with a smartphone

How Are Online Retailers Adapting to the Mobile-first Era?

By Stuart Whitmore

On Apr. 21, 2015, the Internet faced Mobilegeddon. Not the latest Michael Bay disaster flick, nor a newly unearthed Mayan prophecy, but a change in the way Google ranks search results on mobile devices.

The debut of a new, mobile-friendly algorithm threatens to bump websites not optimized for viewing on small screens off the front page of Google results on smartphones and tablets. This change triggered a lot of anxiety among Web retailers who found themselves confronted with an adapt-or-die scenario.

But rather than marking the end of the world as we know it, Google's algorithm update merely confirmed the dawn of a new, mobile-first era—one in which the smartphone is at least as important to consumers as the PC for online shopping.

This shift is being driven by the rapid adoption of smartphones and mobile broadband, which will only accelerate as the price of devices falls. Forrester Research forecasts that there will be 3.5 billion individual smartphone users by 2019, equivalent to 59% of the global population. "The mobile revolution is still in its early stages," says Forrester analyst Thomas Husson. "But mobile will clearly be the new battleground where you must win, serve, and retain your customers globally."

Major e-commerce players are quickly joining the revolution, particularly in emerging markets where lower penetration of PCs and fixed-line broadband has led many consumers to skip desktop shopping and leap straight to mobile commerce. In April, India's leading online retailer, Flipkart, signaled its intention to shut down its conventional desktop-oriented site and concentrate solely on mobile sales within a year, having seen mobile traffic increase tenfold in 18 months.

Meanwhle in China, the country's largest e-commerce company, Alibaba Group, is also moving quickly as shoppers shift to smartphones. Mobile purchases made up 42 percent of gross merchandise volume (GMV) on Alibaba's China shopping platforms in the company's fiscal third quarter ended Dec. 31—that's up from just 20 percent in the quarter ended Dec. 31, 2013.

Alibaba's online marketplaces host millions of large and small merchants, so its challenge is helping retailers serve the rapidly expanding ranks of mobile shoppers. The company recently launched an app that allows merchants on Taobao, China's largest online marketplace, to set up and run a store using only their smartphones, while connecting with mobile consumers through social media."Consumers are already prepared for the move to mobile," says Zhang Kuo, director of Alibaba's mobile businesses. "We're trying to also get the sellers ready for a mobile-first world."

Using the app, called Xiaopu (Chinese for "small booth"), merchants can list new products by simply scanning a bar code with a smartphone camera, significantly reducing the amount of time and effort involved. "On a PC, updating a product took merchants around 15 to 30 minutes. On Xiaopu the average is between two and 10 minutes," says Zhang. "Lowering the entry barrier has helped merchants become a lot more efficient."

Two million of Taobao.com's 9 million merchants activated Xiaopu within the first 15 days of launch. Zhang says the app will be a powerful tool to shepherd micro e-tailers in rural areas into the m-commerce era. "We have very small sellers that are fishermen. They can catch a fish, take a picture of it, and put it on Taobao to sell," says Zhang. "We're able to give that kind of seller a new market to operate in."

For sellers large and small, the shift to mobile provides an opportunity to rethink the online shopping experience. One cosmetics retailer on Taobao.com has created an app that turns the smartphone's camera and screen into a "magic" mirror so consumers can virtually try on make up before they buy and share the look with friends.

That's the kind of innovation Zhang believes could become common in the mobile-first era. Xiaopu is closely integrated with China's social networks, enabling merchants to post promotions on popular micro-blogging service Weibo and reach followers in specific locations. In China, where shoppers and mobile users are very active on social nets, socially native apps like Xiaopu promise to allow retailers to sell and build relationships with individual customers in a highly targeted way.

"Consumers behave differently on mobile, they buy and compare stuff in a different way," Zhang says. "It's up to us to give the sellers the proper tool kit to make sure they can leverage smartphone features and serve the consumer better."

In the U.S., companies like California-based cosmetics maker 100% Pure have already figured out they need a mobile strategy. Ric Kostick, 100% Pure co-founder and CEO, said they opted for a mobile-first approach a year ago. "Whether it's an e-mail blast or a page on our website, we see how it looks on mobile first," says Kostick. "That's the most important thing."

Taking an approach common among smaller merchants, 100% Pure decided not to build a separate, dedicated site just for mobile shoppers. "Managing a separate mobile and desktop site requires almost double the resources," Kostick says. "Even for a company like ours that has been around a while, that's just not practical." Instead, 100% Pure uses a "responsive" website design that is programmed to automatically configure to fit shoppers' devices, whether large or small screen.

The results have been visible on the bottom line and on Google: 100% Pure recently received a ranking boost along with Google's prized 'Mobile Friendly' tag when searched for on mobile devices. The site's bounce rate (a measure of how many customers leave the homepage rather than continue through the store) is now 20% lower among mobile users than desktop users—the exact opposite of the situation in 2013.

Merchants are finding that simplified menus and navigation, vertical-only scrolling, one-click payment solutions, and text and links that are appropriately sized and spaced are all best practices for m-commerce site design. Paring back the amount of content and removing the logistical information that often prefixes a desktop homepage is also essential.

"On a PC, the first 20 seconds is the prime time to seize buyers," says Zhang Benling, a vice president at e-commerce consultant Bestie Song Culture & Creativity Corporation based in China's Fujian province. On mobile, that's cut to 10-15 seconds, he says. "You need compact and eye-catching information of limited length to attract customers."Launching a dedicated smartphone app can offer similar marketing benefits for any online retailer, enabling them to push special offers and alerts straight to the consumer."If someone downloads an app to their phone, it's always at their fingertips," says Kostick, who plans to launch a 100% Pure app in the near future. "You're right in front of your consumer on a daily basis. That's the power of mobile."

CONTACTS

  • Julie Huang Tsang
    Director, International Corporate Affairs
    Hong Kong
    +852 2215 5206