How China sets a new retail normal

The increasing maturity of businesses in using data analytics and omni-channel technologies have created a new retail normal in China, according to PwC’s latest report on e-commerce in China.

China’s e-commerce market is set to be driven by content-led experiences, the report said. 29% of Chinese consumers, compared to a global average of 13%, use social media to see what brands or products key opinion leaders and celebrities are endorsing. Livestreaming is emerging as a major growth avenue for mobile and social engagement in China while 70% of Chinese consumers use social networks as a source of inspiration for purchases.

The survey also shows that 52% of Chinese consumers shop using mobile/smartphone on a weekly or daily basis, compared to 14% of consumers globally, and 41% of Chinese consumers (34% globally) use social platforms as a way to receive promotional offers.

70% of Chinese shoppers consider personalised marketing to be important for their overall shopping experience while 67% of Chinese consumers say their mobile phone will become the main tool to shop.

“With continuously increasing purchasing power from millennials, e-commerce is enabling international retailers and brands to enter China more quickly and easily than before through online-only business models. It is also a new window for Hong Kong retailers, whose sales growth is bound by heavy reliance on mainland visitors and somewhat saturated domestic consumption driven by low population growth, to strive for new growth areas,” says Michael Cheng, PwC Asia Pacific and Hong Kong/China retail and consumer leader.

While O2O focuses on marketing, retailers and brands in China are now starting to invest in omni-channel operating models which drive their customers into physical stores through their online channels. Alibaba is at the forefront of omni-channel innovation with this kind of new retail model.

In an era of content driven e-commerce, price is not the only way to win. This survey shows that consumers are likely to shop from a brand’s official site over third party platforms if they get better warranty/ guarantee (49%) and/or a full range and wider choice of merchandise (42%) while 41% of consumers shop for low price.

To achieve this step-change in maturity, retailers need to change and upgrade their e-commerce operating model. Nowadays, many retailers outsource their e-commerce operations to third-parties who manage day-to-day merchandising, logistics and promotional marketing.

However, while these partners are well capable of performing execution-oriented tasks, they are ill-equipped to provide brand strategy, creative design and digital marketing. Retailers are increasingly taking back outsourced operation services and building in-house teams to control content quality, strategic alignment and unified customer experience.

This survey also reveals that e-commerce, social and emerging technologies are driving new growth avenues across food, luxury and sports retail categories in China.

62% of Chinese consumers prefer to buy groceries online, almost three times the global average (22%). While authenticity remains a worry but Chinese consumers are using e-commerce for lower priced or promotional items.

93% of Chinese shoppers have purchased luxury clothes, shoes or leather goods online. With Chinese consumers often at the forefront of digital trends, they have turned to smart devices to track their overall health and wellness. 67% of Chinese consumers use smart devices to monitor eating and sleeping habits.

“China, as the largest e-commerce market in the world, is now setting the benchmark for present and future global retailing trends driven by its mobile-first consumer behaviour, innovative social commerce model and trusted digital payments infrastructure,” Cheng added.

 By_Staff Writer 


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