Chinese consumers are the world’s first + 1 billion people digital network. In this last decade 3 important things have happened:
1. Chinese consumers finally started spending money after decades of working and saving. They are now the world’s first or second largest market for most consumer companies.
2. They connected 24 hours a day, 7 days a week via smartphones, both with companies and with each other.
3. His behavior went digital first. Almost everything in the Chinese consumer begins with smartphones and their behavior there. “Made in China” is fast becoming “digitized, smart and connected”, forgetting the stigma that “Made in China” in the past meant low quality.
They have modified all the industries under their formula:
Commerce + Content + Social networks = Attention + Transactions
They have digitized all kinds of topics, from smart cities, of which of the 1,000 pilot projects that exist to build this type of city, half are in China. As streets, subways, traffic lights, utilities, and government / security services become increasingly smart and connected via cloud, artificial intelligence, IoT sensors, cameras, and more tools, cities are becoming operating systems on which applications and services can run.
Even fashion, where the trend has been directed to online-merge-offiline (OMO) shows, where the consumer is given a mix of the physical and the online in a fluid and data-driven experience. Thus, fashion brands were forced to go digital, in just two months, since 40-50% of their sales are made in this market.
Both live broadcasts and digital showrooms put brands in front of buyers despite travel restrictions, streamline order management and reach a wider audience locally and internationally, while consuming relatively limited resources. in terms of cost. The last Shanghai fashion fair alone, held in September 2020, was viewed more than 11 million times and generated more than 20 million yuan (2.82 million US dollars) in gross merchandise volume.
Sports also found it necessary to immediately go digital. This example, about a soccer tournament, proves it: “The first athletes started arriving in China in September. They spent their mandatory 14-day quarantine in a hotel that had been specially equipped with powerful PCs, so they could be prepared for the event. tournament. ”Athletes compete exclusively via PC within an arena with no spectators.
Now we also see it in retail. About 25% of retail in China is done through e-commerce. Online retail sales are expected to reach $ 1.8 trillion by 2022. An example of this is the #JD store, which has created the prototype of an “experimental department store” in Chongqing where you can try everything. From makeup to traveling in Onebot cars. It is your electronic space. In turn, it combines e-commerce with physical retail in a data-driven consumer experience. Another example of this mix between digital and physical can be seen with Alibaba’s new Freshippo stores, which are a combination of commercial space, service center and logistics center.
More and more multinationals, like Zara and Budweiser, now see China as their innovation hub for digital marketing globally. And when it comes to payments, you have to accept mobile payments. Because this is how Chinese consumers expect to pay for things. Fast and cheap delivery is also now the norm. Chinese consumers are willing to wait 3-5 days for anything. For e-commerce, they expect delivery today or maybe 1-2 days. For food and coffee, they expect you in about 20-30 minutes.
Starbucks ignored digital and delivery in China and gave Luckin Coffee, a successful chain of coffee shops in China, a mega opportunity. Starbucks immediately had to partner with Alibaba in order to compete for this market.
Some brands have already replicated in the West the success they have brought with this digitization, such as MAC Cosmetics, which opened a store in New York like the one it operates in Shanghai with its concept of the Innovation Laboratory, in which it combines digital and physical by asking consumers to sign in upon entering the store using MAC’s WeChat mini-program and encouraging them to use it while they peruse makeup counters. The mini-program offers a virtual makeup mirror to try on different lipstick shades in seconds and allows buyers to customize, purchase and choose 3D printed eyeshadow palettes.
Possibly, to know the future, you need to know China – from industrial robots and drones to smart homes and smart underwear. However, there is a doubt that, although brands in this country have turned to digital, they will seek to relocate under this model. Will they implement it around the world? Will it be worth the expense and effort? Are we seeing a completely new development path for countries, driven by digitally connected consumers?
This can provide many business opportunities, in this increasingly digital world. So don’t miss out on reading us, where we will surely tell you about some of these ideas. In turn, we continue to recommend that you come and learn about this great country. And we remind you that to do it better than accompanied by your Puente Negocios, where we will gladly assist you and satisfy your needs.