Big trends shaping the future of e-commerce

Johannesburg, 17 Apr 2024
Calvin Huang, e-commerce product and solution architect specialist at Huawei Cloud.
Calvin Huang, e-commerce product and solution architect specialist at Huawei Cloud.

China leads the world in terms of e-commerce innovation and best practice, and e-commerce organisations around the world need to align with the trends emerging out of China to stay competitive, says Calvin Huang, e-commerce product and solution architect specialist at Huawei Cloud.

Social commerce overtakes traditional models

Social and content-driven e-commerce is arguably the biggest trend in e-commerce today, and it is driving massive growth for Asian e-commerce giants, Huang says.

According to Statisa, global retail e-commerce sales reached around US$5.8 trillion last year and are expected to top US$8 trillion by 2027. The lion’s share is held by the Chinese e-commerce market, which remained the biggest online retail market worldwide in 2023, with sales surpassing US$2.2 trillion last year and expected to grow to over $3.2 trillion by 2028. Chinese e-commerce firms have been perfecting social and content-driven e-commerce for years.

Huang explains the difference between traditional and social/content commerce: “Traditional e-commerce can be defined as people looking for goods, whereas social e-commerce changes the dynamic to goods looking for people," he says. “In traditional models, people search actively, compare products across different channels, place the order and evaluate. In new models, there is unplanned, discovery-based demand based on seeing products shared by others. The purchase decision is supported by recommendations and trust, as well as the ease with which purchases can be made. Communication within a community leads to more sharing and purchases.”

Digital humans to drive sales

A key approach is using AI-enabled livestream commerce and livestreams embedded into e-commerce platforms – a model used by numerous Asian e-commerce businesses. China’s livestream commerce market has flourished for some years using human livestream hosts – or key opinion leaders (KOLs). However, more companies are now harnessing AI-powered digital humans to replace live influencers in livestreams. These virtual hosts are more cost-effective than humans, never need breaks and present no risk of scandals.

Offering an immersive experience using virtual humans and livestreams need not be a massive, complex project, says Huang. With solutions such as Huawei Cloud’s Low Latency Live and virtual human tools, businesses can offer real-time interactive livestreaming with latency as low as 800ms and low bitrate technology with API integration.

Enhancing O2O

Another major e-commerce trend is online-to-offline commerce (O2O), which uses online channels to profile customers, attract them to physical stores and enhance their overall experience. Huang says: “O2O New Retail attracts online and offline traffic, improves customer acquisition and retention, and achieves continuous online and offline operations.”

Optimised technology for ultimate UX

User experience is one of the key competitive advantages for e-commerce businesses after price and value, and optimised technology environments help enable this, says Huang. “Technologies such as AI, big data analytics, AR/VR, high definition livestreaming tools and blockchain effectively improve and personalise the user experience, enhance business intelligence, optimise operational efficiencies and help e-commerce businesses evolve. Accurate and timely personalised recommendations, for example, can drive the average e-commerce conversion rate of around 5% up to around 15%. With good social integration, conversion rates could be as high as 20%. A fast and responsive e-commerce experience is also crucial for retaining customers and driving sales.”

Agile and scalable cloud-native infrastructure is essential to ensure a smooth user experience and keep sites up and running optimally, even during peak traffic periods such as Black Friday sales, he notes. Huawei Cloud’s global cloud infrastructure is designed for scalability and low latency, with 30 regions and 85 availability zones, as well as 13 CDN edge nodes in Africa.

“Huawei Cloud’s ecosystem and mature e-commerce platform helps e-commerce businesses optimise their operations and align with the biggest trends in e-commerce today, including big data analysis, intelligent search, livestreaming and faster access for better user experience. Huawei Cloud is trusted by leading e-commerce businesses such as Aladdin, Mengxiang Group, Giikin, Shopee, Xingsheng Youxuan and Kilimall,” Huang says.

Discover more on how to transform and optimise your e-commerce environment with Huawei Cloud solutions: