Forget E-commerce. A new generation of social media savvy Chinese consumers is leading the way in the mobile commerce revolution. Spurred by an influx of middle class wealth, China has experienced a boom in online retail, which allows consumers to shop anytime, anywhere. With the prevalence of social media and smartphones, the better-known e-commerce has spread to mobile phones.

Commonly referred to as “a retail outlet in your customer’s pocket,” mobile commerce is the use of wireless handheld devices such as cellular phones to conduct commercial transactions online (Investopedia).

Duan Qiyu, a dance teacher in Beijing in her late twenties, said that she uses Alipay as her primary method of mobile payment. She uses it to pay for purchases on Taobao, China’s premier website for online retail, phone bills and day-to-day expenses. “I use Alipay on my phone a lot, mostly because I do a lot of online shopping. It’s very convenient. Nowadays, less and less people use their computers.”

For Duan, her WeChat wallet is reserved for more specialized purposes, including paying taxi fairs on Didi Dache, China’s mobile taxi-calling platform, and sending red envelope money to her friends during Chinese New Year. The red envelope function is a feature that allows WeChat users to send each other small amounts of cash. 

Duan estimated that around 60 percent of her purchases are now made through mobile payments, and her experiences are reflective of the Chinese market.

“Everywhere you walk around a big city in China, people are glued to their smartphones, whether to catch up with friends on WeChat or shop on Taobao,” said David Yin, editor-in-chief of China Hands Magazine and member of Yale’s class of ’15, “I've friends who spend much of their free time browsing shopping items on their phones simply because it's so convenient and there are so many options.”

Smartphones account for up to 80 percent of cell phone sales in the Chinese economy, says Huffington Post. Consumers are attracted to mobile shopping, which offers more variety, lower prices, and more convenience. According to PayPal’s reports, 68 percent of Chinese consumers reported using their smart phones to make a purchase within the past year, compared to 31 percent in the U.S (pymnts.com). These developments have led to an explosive growth in the Chinese mobile payment market, which reached 1.43 trillion RMB ($228 billion) in Q3 2014, a five-fold jump from a year earlier.

Randy Hlavac, CEO of Marketing Synergy Inc., and instructor of social and mobile marketing at Northwestern’s Medill School of Journalism, said that the key to Tencent and Alibaba’s success is the integration of different market platforms to create the optimal mobile shopping experience. In China, this often means that online shopping goes hand in hand with social media. On WeChat, the most used social media app in China, consumers can browse through various online shops while simultaneously scrolling through their friend’s news feeds. They can select an item, read reviews about it, and make the purchase through mobile payment all on the same app. In order to be on the cutting edge of new technology, many retailers in China are also adopting mobile payment options, allowing consumers to use Alipay to pay for purchases.

“In China they jumped ahead of the U.S. by looking at what was popular and putting it into one platform,” said Hlavac, “It’s a lot easier for the consumer.”

According to Doug Young, former China company news chief at Reuters and lecturer on financial journalism at Shanghai’s Fudan University, China’s relative lack of a traditional retail industry may also have contributed to the rise of m-commerce. The retail sector has had only 20 years to develop, since China first became liberalizing its economy in the 1980s. This has provided a big opportunity for mobile commerce because it doesn’t have to compete with a sophisticated, well-established and traditional retail industry.

“In the US there’s a lot more competition with traditional industry than in China,” said Young, “The mobile payment companies have to compete with credit cards that have been around since the 1960s. In China they don’t have the same kind of establishment that they have to fight to get accepted by the population.”

Since June 2010, the People's Bank of China has issued over 200 licenses to non-financial institutions to provide third-party payment services. Mobile commerce is a way to appear more high tech, trendy and relevant to consumers. For American businesses, this is a golden opportunity to tap into the increased spending power of China's middle-class, said Yale’s Yin. Many companies are seizing the chance to market their product through social media to Chinese consumers.

Among these growing trends is the use of special interactive HTML5 pages embedded within WeChat to engage consumers. For example, Burberry was able dramatically amplify the attendance of one of its event in Shanghai last year by giving online consumers a full 360 degree view of the show. Meanwhile, Tesla is attempting to attract Chinese consumers by giving potential buyers the opportunity to experience what owning the car would be like, answer questions about how things work, and providing detailed journeys through the car using a series of immersive HTML5 pages in WeChat, according to Totem Media.

However, none have been as successful at navigating social commerce as Chinese smartphone company Xiaomi. By introducing fun and interactive online flash sales, Xiaomi sold 150,000 of its flagship Mi-3 model in 10 minutes using WeChat in November 2014.

According to Eliza Harca, regional director of Red Ant in Asia, a company that works to provide mobile and social marketing strategies for companies, a multitude of retailers including Arcadia, Burberry, and ASOS have come to Red Ant seeking consulting. More and more companies are investing into mobile as a core part of their marketing strategy. “Mobile is often the center point for a customer journey - hence we go mobile first,” she said.

Although China is leading innovation in mobile commerce, it is also a growing global trend, said Steven Millward, editor of TechinChina. More and more businesses will begin to realize that mobile commerce is an increasingly important part of the buying process. Although apps such as Apply Pay and Google Wallet have failed to gain momentum in the U.S., m-commerce will become more prevalent as companies develop a product that is safe, convenient and accessible.

“Every one who owns a smartphone potentially already has a mobile wallet in their pockets,” said Millward. According to the Pew Research Center, 64% of Americans now own a smartphone in the U.S., and a large percentage of smartphone owners are young Americans with relatively high income and education level.

American retailers and tech companies can learn from the business models of Chinese mobile commerce players since the mobile sector is developing so quickly in China. “It represents the future,” said Hlava, “Businesses will be watching to see if there are lessons we can learn for other countries. If it works in China, then we can learn how to better use it in the US and in other countries.”