Lessons from China's trend-setting commerce market for the rest of the world.
Wunderman Thompson Intelligence presents “Transcendent Retail: APAC,” a new report in partnership with Jing Daily that explores emerging retail trends in China, the world’s biggest commerce market, and its role as a vibrant test bed for global brands.
Burberry picked the city of Shenzhen, China for its first “social media store” concept, where shoppers are assigned avatars, scan QR codes for product information and earn “social currency.” Louis Vuitton chose Tencent’s gaming platform League of Legends as a collaborator to create skins for players as well as launch an offline range of apparel.
This year, China is expected to become the first country in the world where more than half—52%—of total retail sales originate online. This compares to 29% in South Korea and 15% in the United States, according to eMarketer.
Commerce trends being pioneered here are transcending channels—messaging, social, gaming, streaming, digital and physical. They are also crossing geographies and landing on other shores, thanks to investments by Chinese tech companies as well as independent adoption by local players.
Highlights from the report include:
The rise and rise of live commerce: Part infomercial, part entertainment, and hosted by influencers, live commerce took off in the 2020 lockdowns when more than 1 million viewers tuned in to watch Tmall’s 618 shopping festival livestream. Now it’s moving up the value chain to luxury and crossing borders as brands target overseas markets.
The clicks-and-mortar store: Physical retail stores are adding digital bells and whistles, hosting livestreaming sessions and incorporating interactive social media apps. Meanwhile, web-only retailers are dabbling in physical spaces, leveraging their social media followings. TX Huaihai, a Shanghai mall that reserves half its space for trendy web-only brands to set up pop-up stores, attracted five million visitors in 2020, its first full year in operation.
Brands get in the game: Brands are collaborating with the biggest gaming platforms to launch virtual possessions, from clothing to cars. Aston Martin, Maserati and Tesla have all created virtual cars in the massively popular Game for Peace. With almost 518 gamers in the country, China is the world’s biggest gaming market where 56% of mobile gamers are female and 47% are under 30 years of age.
Democratization of the Influencer: China’s mega-influencers, who sell everything from pots and pans to luxury fashion to cars, are famous for landing massive sales during livestream sessions. But there is only so much space at the top. The influencer space is moving to tap into those with smaller and more niche—but perhaps more loyal—followings.
Boomers are the new Gen Zs: China’s seniors are the last untapped demographic when it comes to commerce, but not for long. Post-pandemic, 81% of Chinese consumers over the age of 55 are now more comfortable using digital technology. This has led to the rise of the Senior Influencer, with one example being Grandma Wang Who Only Wears High Heels, an 80-year-old KOL with over 16 million followers on Douyin.
Readiness of other markets: Just as the pandemic sped up the evolution and adoption of these commerce trends in China, it did the same elsewhere as record numbers went online. While China is the benchmark for all things commerce, consumers in other markets appear keen to explore many of these concepts.
For example, while 80% of Chinese say they intend to shop more on social media platforms in the future, 88% of Thais, 78% of Indians and 69% of Indonesians say they do, according to Wunderman Thompson’s “The Future Shopper Report: 2021.” The numbers of Australians and Japanese intending to shop on social media are lower, though still significant, at 45% and 25% respectively.
Download the full “Transcendent Retail: APAC” report for more.
Main image of Shiseido Beauty Square, Harajuku