By Inside Retail Asia
China’s dominance in manufacturing has made it the factory of the world. The subsequent economic growth enriched an ever-expanding middle class, and the country’s retail industry has quickly adapted to supply a growing appetite for consumption.
Some of these developments in the way people spend their money, powered by the latest technology, will soon be appearing on a device near you. Indeed, at the start of this year, The Economist suggested that retailers everywhere should look to China, and some are already doing so.
So what will China’s “retail revolution” bring to the rest of the world? Here are five concepts for global consumers to be on the lookout for…
1. Lifestyle commerce
Increases in disposable incomes have led to rapid growth in the number of Chinese people eating out, seeking entertainment and travelling. Traditional e-commerce businesses sold general goods but did not offer a new lifestyle.
That’s where digital “super-platforms” came in. Meituan, for example, which has over 600 million users and is valued at US$100 billion, provides almost every type of lifestyle service and entertainment. It offers restaurant reviews, takeaway deliveries, travel bookings, movie tickets, bike rental and more.
Consumers elsewhere can expect omnipresent “super apps” to penetrate every part of life, as the delivery and ride-hailing service Grab is doing in Southeast Asia, by moving into financial services.
2. Merging online and offline
The integration of online and offline consumption is already familiar to many shoppers. But in China, digital platforms like Taobao, JD and Meituan offer much more than the likes of Amazon. They sell everything from rice and phones, to villas and space travel.
The most challenging items for these firms to sell quickly online have been seafood and fresh produce, due to high logistics costs, low price points and easily perishable products. But some are now using their own warehouses to provide delivery of fresh food in under an hour (an idea already becoming popular elsewhere). Online grocery shopping has become routine in many countries, but in the future you should expect every kind of purchase to become faster and even more convenient.
3. Social commerce
While the middle classes in China’s biggest cities enjoy the convenience of Meituan and others, there are still one billion Chinese people living in small towns and rural areas who remain poorer and more price sensitive. A social media platform called PinDuoDuo has now tapped into this population, harnessing the popularity of the social network WeChat (think WhatsApp, Instagram, Facebook and Amazon all rolled into one).
The idea was to make online shopping more of a social, interactive experience. It became very popular because it was enjoyable – a source of entertainment – and has since caught on with wealthier customers too. Consumers outside China can expect shopping in digital ways to become more fun, social and accessible.
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