Jump ahead a few quarters into 2019 when an athletic lady in her mid-30s walks into a sports store. “Welcome back Mrs. Zhou, how can I can help you today?” asks the smiling clerk named Xiaoyu. Zhou is impressed, she has only ever been in the store once before, and that was six months ago, but Xiaoyu remembers her name and greets her like family. “I’m looking for a new pair of running shoes,” says Zhou glancing at her feet. Xiaoyu nods, “I’m not surprised. You’d said the last pair were for the Wuxi marathon, so I’m guessing you’ve run many miles since January. Will you be going with Nikes again? We’d found them best suited to your running style last time.” Wow, thinks Zhou, this store is always busy, they must get thousands of customers every week, yet Xiaoyu is treating me like I’m their most important customer.
After selling her a snug-fitting pair of kicks, Xiaoyu convinces Zhou to upgrade the smartwatch she purchased in January, and buy arms-full of clothing and accessories for her son who joined her on the last visit. Xiaoyu notices Zhou looking nervously at the towering pile of purchases on the counter, “Don’t sweat Mrs. Zhou, you don’t have to carry it all. We have your address on file and will deliver it to your home before lunchtime, free of charge.”
Although Zhou spent a lot more than she’d planned to, she skips out of the store humming from the experience. She’s just joined the store’s loyalty program and followed their social and ecommerce accounts, sharing the encounter with her runners group on WeChat.
Mrs. Zhou’s experience is likely to become more and more common in China this year. This is due to one of the big trends in China – facial recognition – which will see adoption accelerating this year. Most facial recognition coverage in China is about control and monitoring, such as travelling by plane, crossing the street at the right time, or using the correct rations of loo paper<. Yet there are increasing marketing applications that take convenience, personalisation and customer service to a new level.
We expect the slew of helpful facial recognition applications will attract a critical mass of users, seeing it integrated on countless platforms – much like mobile payments have been in China. In just the past month there are been a couple of examples: Alibaba is allowing China’s millions of small and mid-sized retailers accept face-scan payments through a simple tablet application and China’s Airbnb Xiaozhu is rolling out a trial allowing facial recognition-enabled smart door locks for guests. These and other applications will vastly improve the consumer experience and drive adoption.
Facial recognition technology is still in its infancy, so teething issues are to be expected. Last November, a facial recognition camera caught a top businesswoman “jaywalking” mistakingly scanning her face from an advertisement on the side of a bus. The mixup came less than a month after China’s State Administration for Market Regulation warned consumers about facial recognition door locks, some which can be easily fooled by photos of faces and 3D-face modelling. Nevertheless the technology is continuing to improve, with China leading the way. It took the top-5 spots in the US National Institute of Standards and Technology facial recognition vendor test late last year, with the winner YITU achieving an accuracy rate over 99%.
The year ahead will be an interesting one with the slowing economy and uncertainty around a March 1 resolution of the Trade War. Yet, in line with previous years, consumption is expected to remain the key pillar in China’s continued ascent driving two thirds of total economic growth. As ever, the shining prize of China’s massive consumer market will bring forth plenty of marketing innovations such as facial recognition, allowing brands to stand out and connect with customers like never before. China Skinny can assist your brand to ensure that you are leading the pack. Go to Page 2 to see this week’s China news and highlights.