Transcendent retail: APAC

Lessons from China’s trend-setting commerce market

Retail is now digital and physical, personalised and social, all at the same time. It also increasingly transcends geography. Borders are evaporating between markets, channels, and media, helped in part by the pandemic lockdowns. Retail is now moving into a state where touchpoints are both constant and fleeting. 

Already, trends such as live commerce, social commerce and the creation of super apps that combine messaging, commerce, payments and delivery are spreading across the globe, thanks to direct investments and knowledge transfer by Chinese tech giants, as well as experimentations by local players.

 

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 US, according to eMarketer.

 

Commerce trends 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.

 

Key finding from the Transcendent Retail report include:

 

The rise of live commerce: part infomercial, part entertainment, and hosted by influencers, live commerce took off during 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 5 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 million 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.

Democratisation of the influencer: China’s mega-influencers, who sell everything from pots and pans to luxury fashion and cars, are famous for generating 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 Zers: 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 Key Opinion Leader (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, 80% of Chinese say they intend to shop more on social media platforms in the future in comparison with 88% of Thais, 78% of Indians and 69% of Indonesians, according to 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 insights and analysis