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Offline service offers the edge in China

News, 30 November 2016

SHANGHAI: While China's online retail boom is capturing the headlines, it is savvy brands providing offline services that are capitalising most on the country's high-spending consumers.

Although Chinese consumers are among the world's most prolific online shoppers, they generally prefer bricks-and-mortar service.

A mixture of online buzz and practical offline support is usually the key to success in China – an understanding that local brands have used to their advantage as foreign brands stumble in some categories.

Fast-growing local smartphone brands Oppo and Vivo, for example, now command the most market share in China, significantly outselling international brands Apple and Samsung. Oppo, in particular, has embraced a considerable bricks-and-mortar retail presence – a move which has played a significant role in propelling it to market leader status in the most recent sales quarter.

International companies such as Airbnb have been forced to change tack in the country, employing people on the ground to compete with services offered by local brands, who have a better understanding of China's business intricacies and can offer quality control of properties.

According to the Wall Street Journal, non-Chinese travellers in some areas of China are required to report to local police within 24 hours of checking in to a rental. To facilitate this, Airbnb's rival Tujia.com has signed agreements with more than 200 Chinese cities, compared to Airbnb's four agreements.

The local company also places staff in the most popular rental areas to liaise with local authorities and offer guests the smoothest experience.

"In China, online and offline are equally important for a business, be it sales, quality control or customer management," said Zhuang Hai, president of Tujia Holdings.

Data sourced from Wall Street Journal, ZDNet; additional content by Warc staff