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The Great Mall of China
To set itself apart from competitors and inspire customer confidence, Tmall.com crafts an event that brings in the press, vendors, and shoppers to experience its goods in person. Using augmented reality, Quick Response (QR) codes, and a futuristic setting, the company generates 26 million media impressions and boosts sales by 13 percent. By Charles Pappas
Company: Zhejiang Province Taobao Shangcheng Technology Ltd. (Tmall.com)
Event: E-magine the Future
Objectives: Overcome deep-seated trust issues threatening the reputation of online retail outlets in China. Change the perception of Tmall.com from a down-market business-to-consumer site to a seller of upscale brands.
Strategy: Invite media members, vendors, and consumers to experience the company's offerings and become brand evangelists.
Tactic: Create a stylized shopping mall and allow guests to interact with and buy high-end products on the spot via iPads, augmented reality, and Quick Response (QR) codes. Encourage guests to post messages and videos online in real time.
Results: Scored more than 3 million social-media posts, 25 million event-video views, 26 million media impressions, and a 13-percent increase in sales one month after the event.
Creative/Production Agency: Jack Morton Worldwide, www.jackmorton.com
Budget: $5 million
he wily Chinese reformist leader Deng Xiaoping proclaimed, "To get rich is glorious," creating a computerized engine out of what was a medieval economy in 1979. Nearly 35 years later, with more Internet surfers (540 million) than the entire populations of Mexico, Brazil, Japan, and Germany combined, and with annual online spending ($210 billion) that nearly surpasses the yearly gross domestic product of Finland, China has a lot of glory to spread around.

But for Beijing-based Zhejiang Province Taobao Shangcheng Technology Ltd., whose online retail site, Tmall.com, sells everything from baby formula to empty Chateau Lafite wine bottles, China's e-commerce potential was equally matched by its problems. According to the China Internet Network Information Center, an alarming 52 percent of Chinese surfers worry about the security of their online transactions. These suspicious shoppers have good reason to fret about whether their money is going somewhere kosher or crooked. The shopping oasis of the online world has been poisoned by so many scams that the China Electronic Commerce Association reports that in a recent one-year span, 32 percent of Chinese Internet users purchased items from fraudulent websites, losing $4.7 billion to bogus digital retailers. "Consumers don't just take it for granted that the product will show up as expected," says David Bell, a professor of marketing and expert on Chinese online commerce at the Wharton School. "And that has led to a huge breakdown in trust."

Who Do You Trust?
An offshoot of the Alibaba Group Holding Ltd.'s eBay wannabe, Taobao, until it was spun off in 2011, Tmall.com wanted to reposition itself as a trustworthy purveyor of premium brands. Imagine Kmart deciding one day to become Neiman Marcus, and you'll understand the scope of its ambition. But the challenges Tmall.com faced would have dwarfed even a Shanghai skyscraper.

The company worried that the trust between consumers and Internet vendors was as fragile as a Ming vase with a hairline crack. Indeed, one eye-opening survey found 86.9 percent of online shoppers, wary of pulling the trigger and ending up defrauded, had abandoned their virtual shopping carts. But sleazy sellers weren't the only iceberg threatening to turn Tmall.com into an online Titanic. In China, 90 percent of online sales are funneled through a handful of we-sell-everything players, such as Tencent Mall, 360buy and, of course, Tmall.com. So if consumers have a negative experience shopping on a retail site like Tmall.com, they'll scapegoat not a specific brand or product, but the online marketplace itself. "Tmall.com had to show itself to be reliable and trustworthy," Bell says. "That takes more than advertisements. It takes a personal touch."

In China, so many shoppers have been cheated by credit-card scammers or had their name-brand purchases substituted with fake versions, that they assume what they see on their computer screen packs all the credibility of an email from a Nigerian prince. Tmall.com needed a knockout punch that would separate it from the cyber cheats and digital deceivers, and establish it not just as a virtual warehouse but as a trusted institution.

The solution, Tmall.com believed, was to offer a face-to-face connection with people who could eventually evangelize the benefits and bona fides of Tmall.com to the masses.

Working with Jack Morton Worldwide, Tmall.com decided to stage a corporate event that it hoped would overcome the widespread and deep-rooted Chinese skepticism about e-commerce, from whose dingy depths it might emerge with a brand perceived as innovative as Apple Inc. and as trustworthy as Amazon.com.

Perhaps the most difficult question Tmall.com faced — who to invite to an event dubbed "E-magine the Future" — was answered in part by its own users' needs. Research by the Boston Consulting Group had found more than 40 percent of Chinese online shoppers relied on product reviews posted by other consumers online, a rate twice that of American consumers. Thus, many ordinary online shoppers, leery of websites in general, trusted only other shoppers to help guide their purchases like an informal Consumer Reports magazine. Such users, Tmall.com knew, would have to be an integral part of an event designed to create an image as upscale as its merchandise.

Clearly, the average online shopper was paramount to the event, but Tmall.com also concluded it would need two more groups if it had any hopes of generating a kind of marketing critical mass: the media, and the individual companies that comprise its vendor base. While the media would potentially spread the word through online and offline channels to millions of others, and thus legitimatize Tmall.com's effort as well as publicize it, the vendors might find their sometimes prickly relationship with Tmall.com could be soothed with a high-profile promotion.

Two months before E-magine the Future kicked off, Tmall.com began sending invitations to this trifecta of target audiences. Snail mails went out to approximately 300 Chinese press outlets and a few international media players, including heavy hitters such as the English-language China Daily, the online news site Tech in Asia, and the Sina.com.cn Web portal, which boasts more than 100 million registered users worldwide. Also among the invitees were representatives of Sina Weibo, the Twitteresque social network, which has in excess of 500 million users. Another 300 invitations were issued to Tmall.com's various vendors, including computer-maker Lenovo Group Ltd. and eyeglass-maker Luxottica Group S.p.A.'s Ray-Ban subsidiary.

The company took a different approach to entice consumers, however. Tmall.com placed a notice on its home page about the event at the same time it mailed out the other invitations. Any consumers who were interested in attending could register online, with the first 400 people earning registration. Those guests would join the roughly 300 media representatives and 300 vendors invited to E-magine the Future. But with a total of nearly 1,000 people coming, the company decided it would be best to spread the event over three days, giving each group its own, exclusive event.

From Bland to Grand
In the weeks before the event, Tmall.com ratcheted up the anticipation by teasing invitees with updates through social-media channels and notices posted on Tmall.com and an event microsite. While the blandishments came with the white noise of corporate PR releases, there was an undercurrent that attendees would experience something game-changing, something that would shake up their view of Tmall.com like an Etch-a-Sketch.

On the first day of the event in March 2012, media guests arrived at 2 p.m. at the MasterCard Center in Beijing, an indoor arena built for the 2008 Summer Olympics basketball competition that offered ample space for the surprises Tmall.com had in store. While Tmall.com had slotted a different target group for each day of the event, all three iterations were essentially cut-and-pasted copies of one another. Each also started out comfortable and tame by plan, so that attendees would never see what was coming.

Beneath a white fabric sky billowing like low-hanging cumulous clouds, guests arrived and mingled in a space in which Jay Gatsby would have felt at home. While they munched on finger foods and clinked the ice in their cocktails, there was little to suggest the kind of excitement they would soon experience, which would surely make their pulses race and hearts skip. So far there was nothing to differentiate this event from a thousand others that stroll through a speech, a spiel, and a "sayonara" with the predictability of a washing machine's cleaning cycle.

Roughly three hours into the event, Tmall.com president Daniel Zhang took center stage to give what most expected to be a boiler-plate speech touting the online retailer's awesomeness. Instead, Zhang revealed that the company had a special surprise awaiting attendees, one that would forever alter their view of Tmall.com like an apple altered Sir Isaac Newton's view of the universe. After Zhang enticed them with that verbal lollipop, a bevy of dancers emerged to lead the intrigued guests down a 50-foot-long tunnel lined with fabric as black as a polar night. While the nearly 300 attendees shuffled through the unlit passageway into Tmall.com's terra incognita, dramatic music swelled around them with the force of an aural tsunami, and lighting effects painted the tunnel like Chinese fireworks painted the night sky.

Altered States
Where they emerged was not so much in another room but in a world yet to come: the Tmall.com Experience. Sprawling over a futuristic setting the size of a football field, the Tmall.com Experience was designed to look like a street somewhere in China's shimmering future. The art-deco-elopes-with-"Blade Runner" look included roads that seemed to glow in lavender hues, and hostesses clad in outfits that might have been borrowed from the costume designer's closet for "Tron."

In the middle of this extraordinary scene stood the veritable piece de resistance: a two-story glass building constructed across a T-intersection, with eight retail stores and an equal number of mocked-up living spaces. Each store and every room was stuffed like a pirate's treasure chest with consumer merchandise carried by various Tmall.com vendors: designer jewelry, clothes, sunglasses, sports equipment, gaming systems, digital cameras, bed linens, cosmetics, even Mercedes-Benz automobiles and Haagen-Dazs ice cream.

After "Minority Report" and Google glasses, it wouldn't be futuristic unless you could augment the reality around you. So staffers handed out iPads to attendees to enhance the Tmall.com Experience. Preloaded with a variety of software, the iPads' custom-designed augmented-reality app allowed guests to aim the tablets' cameras at, say, a pair of Jimmy Choo pumps and see more detailed information layered over the footwear. Another app let them scan any Quick Response (QR) code that was placed on or near the items. With a quick scan, attendees could place an item into their online shopping cart and purchase it. Guests were also encouraged to post photos and messages about the event via social-media apps on their tablets.

Strategically, using QR codes was as clever as anything out of the Chinese military classic, "The Art of War." Indeed, its author, Sun Tzu, would have appreciated how Tmall.com applied his most famous military maxim: "If you know your enemies and know yourself, you can win a hundred battles without a single loss." In Tmall.com's case, the battle was for guests' hearts and minds rather than enemies' lives, but the idea wasn't all that different. Tmall.com knew that QR codes were wildly popular. They currently appear on business cards and postcards, on produce in grocery stores, on health-inspection records in restaurants, and even on tombstones in cemeteries. While 50 percent of U.S. smartphone users have activated a QR code at some point, 70 percent of Chinese smartphone owners have. In fact, in 2012, the year of the event, the use of QR codes in China quadrupled, and that trend was showing no sign of slowing.

Getting even more "science-fiction-y," Tmall.com worked with Suresnes, France-based Total Immersion SA, the company that devised the AR apps for the iPads, to create a similar series of reality-enhancing portals. Guests stood in front of interactive LCD screens of varying sizes and, much as a fairy-tale queen invoking the spirits with "Mirror, Mirror," they could clad themselves in a variety of hyper-cool couture, eyewear, or watches with a simple swipe of their hands. The real wizardry, of course, was proprietary software and computer-run motion tracking. For example, guests held up a plastic cup in one area while they attempted to catch virtual plunging chunks of vanilla, chocolate, and even ginger ice cream before staff offered them a scoop of the frozen dessert. In a mock bedroom, attendees lolled on a king-size bed and gestured to a ceiling-mounted display to choose different combinations of bedding, while on the screen an attractive man or woman would appear to lie down with them for, perhaps, some simulated "sexytime."

Following a few hours of browsing the mall, guests were steered to another section of the prairie-sized space for the event's closing act, a fashion show. After a costumed acrobat cavorted in the air like a Cirque du Soleil version of Catwoman, an 85-foot-wide screen parted and fashionable models burst forth like flocks of exotic birds, their plumage the latest collections from brands such as Mango, Forever 21, Levi's, and Izzue. For 20 minutes, with Vanessa Paradis' torrid "Des Que J'te Vois" blasting away in the background, attendees snapped pics and recorded videos of the models strutting down the runway.

To the casual observer, the Tmall.com Experience portion of E-magine the Future was just letting hundreds of people gawk at high-end baubles. But in fact, Tmall.com was solving a uniquely Chinese problem with a uniquely Chinese solution. The spate of online fraud in China has created a payment system singular in structure. There, many online shoppers put money for online purchases into an escrow account; only after they receive and inspect their merchandise to see if it is exactly what they ordered do they release the money from escrow to the vendor. What Tmall.com did was replicate the essential, make-or-break point of the shopping experience, where the customer ends up pleased or peeved. Instead of experiencing fake goods arriving with designer names (and designer prices), attendees saw, felt, and even bought the real thing in real time just as they might at home. It was this keen understanding of what made its customers tick that stirred Corporate Event Awards judges to acclaim Tmall.com's E-magine the Future event as "an exemplary interactive experience." Moreover, one judge said, "To take an online experience and bring it to real life is amazing. In one event, Tmall.com transformed its reputation as a low-end merchandise seller to that of a high-end one."

Good News Travels Fast
After the event, Tmall.com's number was up — in the best way possible. The company's "experienced by few, witnessed by many" approach achieved "Gangnam Style" levels of popularity. Its wish that guests evangelize the event was realized to a degree no genie could have granted. Attendees tapped out more than 3,000 Twitter-like Weibo posts on the first day of the event, which in turn generated a cascade of nearly 3 million reposts and comments, helping propel Tmall.com's Weibo account to the sixth most popular one on the social network that day. At the latest count, event videos guests uploaded on the Youku and Tudou sites (similar to YouTube) have been viewed a head-spinning 25 million times. The event also mustered almost 26 million mainstream media impressions, including coverage from 50 newspapers, 10 TV stations, and more than 1,000 online sources.

None of these metrics necessarily means much if they didn't also raise Tmall.com's bottom line like a souffle. In fact, the numbers demonstrate that the event had the kind of impact not felt since the meteor that smashed into Siberia a century ago.

Sales from existing customers in the first month after the event jumped an astonishing 13 percent over the previous month. According to EnfoDesk Analysys International, Tmall.com's portion of all online business-to-consumer sales in China right before the event hovered around 44 percent. In just one year after the event, that percentage had grown to a lion's share at 52.1 percent. And with the number of visits to its site on pace to double every 1.5 years, it doesn't take much to "e-magine" what the future for Tmall.com will bring.

The Winners
The Great Mall of China
Zhejiang Province Taobao Shangcheng Technology Ltd. (Tmall.com), Beijing
Head of the Class
Cisco Systems Inc.
San Jose, CA
Mobile Marathon
New Balance
Athletic Shoe Inc.,
New York
Schuler's Industrial Revolution
Schuler AG, Munich
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