THOUGHT LEADERSHIP

 

From DOS to Free People – Catch up with the Digital Generation in China

May 16, 2014 Jasmine Sun


Some say China e-commerce is a cheap and discount market place, and any premium brands should not be there. Those who say so fail to see the truth that market re-shapes every time new demand emerges, and the key new demand generators online in China are the post 85’s - the first generation that grew up with digital being a nature piece of their life. Let’s take a time machine to go back and see how things changed in a post 85’s growing story with internet, and you’ll comprehend why they are the compass of where digital China is going.



Please click here to watch the video clip on YouTube if you locate outside of China.


I was born in 1985 in Chengdu, a provincial capital city in the mid-west China. Right before I was born, Deng Xiaoping had his famous saying “computer education should start with kids” published in Shanghai, and it took some time to make things happen from the most international city to inner land. In 1998 I had my first experience with computers – we had DOS classes in middle school, on a dumb-looking machine with black-white screen, and I felt this computer thing was a little tedious. The feeling changed in 2000 when I tried to chat faster with strangers online during the homework-free summer after middle school, and I got familiar with the keyboard whose design made no sense to me, thanks to QQ. 


The computer education continued in high school, and we had brand new machines with colorful screens, and more importantly, connection to internet. I still remember the tearing soundless laughter shared with friends watching funny flash on 163.com behind the screen, while the teacher was teaching how to use Microsoft office in front of the classroom. It was part of my beautiful teenager memory.



I got my first laptop in 2004 after I moved to Shanghai. I had to make my dad understand that it would be quite troublesome to go around without a computer in college – homework was requested to send to tutors’ email box, school activities are posted on BBS (I wouldn’t expect him to understand the importance of games, movies, QQ, MSN and blogs for entertaining and socializing so I kind of skipped that part).


It wasn’t long before Taobao got my attention, I split delivery fee with roommates and bought cheap accessories, groceries, and books from there. Girls of age 20 away from home, we were learning to build a new life on our free will without parents and teachers’ command, we had too little money to make big lose and we bet on the security of a brand new way of shopping, we had tons of spare time and we browsed, tested, and learned to dive in the internet world under guide of our strong curiosity. 


We witnessed the evolvement of e-commerce market in later years – there was a time that per transaction size was limited to 500 RMB per day due to bank limitation; there was a time that Tmall was called Taobao Mall and nobody could tell its difference from Taobao; there was a time that Newegg was as popular as Jingdong; I went to a small event by pre-management at Dell and heard about Yihaodian – a great idea that happened just when I thought there should be an online supermarket, and 3 years later it was acquired by Walmart as its online platform.


In 2010, an US apparel brand called Free People came to my employer SmithStreet, wondering how sales from China suddenly grew 10 times than it had always been within 2 weeks. They targeted very niche youth market, they are not a cheap brand, they didn’t have any physical presence in China, and they never tried to make any marketing efforts on this land - China was merely one of the 50+ countries they ship to from US through their English e-commerce site. It turned out all the sales were driven by twin sisters from Chongqing – a Tier 2 city of inland China. These 2 girls were born in a rich family, young and pretty, love fashion and luxury, travel a lot. They shoot each other wearing different brands they discovered across the world and upload the pictures to their blog, and that’s how Free People got its exposure to Chinese – the twins had 350,000 followers online! Free people knocked out the China gate from the digital side, and that eventually lead to its first brick-and-mortar store opening in Hong Kong on April 1st, 2014. 



Back in 1998, my dad bought his first desktop home, the same year when I was learning DOS. It had Window 97 system, connected to internet through telephone line, and was only used for stock trade. Everyone else was forbidden to touch it because it looked fragile and my dad had no idea how to fix a dedicated machine like that. After 15 years, he still use it for stock-trade and always need my help to download computer games or find information. He once was touched by the idea of shopping online, but eventually gave up due to security concern and the complication of learning – he can’t even type with more than 2 fingers.


It’s not fair to say that Chines only shop online for cheap and discounted stuff, it’s the people who felt comfortable to shop online were young and poor - they bought cheap stuff everywhere! This group are reaching the age of 30 and becoming management in the office and parents at home - the decision makers! No matter it’s a laptop, a dress, or a bottle of baby milk powder, e-commerce is just as nature as any other traditional channels you can think of, if not preferred. In today’s China, there are so many choices available, and if one doesn’t play in the digital generation’s friend zone, one would be out of their sight soon.





About the Author

Jasmine Sun is a manager at SmithStreet, a growth consultancy based in Shanghai. She is experienced in leading project work streams, and has extensive primary and secondary research experience in projects across a wide number of industries, with expertise in consumer goods, e-commerce and medical/pharmaceutical.

 

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