Mobile- and social media-centric online-to-offline strategies that provide seamless shopping experiences are a “must” in China’s new consumer era.
That’s the verdict of Teresa Lam, VP of Fung Business Intelligence, who has co-authored a report 10 Highlights of China’s Commercial Sector, 2020.
“Businesses need to choose appropriate platforms, channels and adopt targeted marketing approaches to reach and attract customers. Hiring internet KOLs (key opinion leaders) or KOCs (key opinion consumers) to create interesting content and market products through live-streaming are highly effective ways to connect with the digitally-empowered young consumers,” said Lam.
“At the same time, enterprises are advised constantly to introduce new business models and retail practices, as well as carry out format innovations. These should be capable of creating immersive experiences for customers with quality content, state-of-the-art technologies, entertainment and other experiential elements.”
Against last year’s backdrop of a cooling economy and simmering trade tensions between China and the US, 10 Highlights of China’s Commercial Sector presents a more optimistic tone for the year ahead, predicting an ease in the trade stalemate coupled with growing consumption in emerging sectors and segments. These will bring fresh opportunities this year, according to the report.
Overall, China’s commercial sector is likely to soften further because of ongoing internal and external economic pressures. However, persistent efforts by the Chinese government to boost consumption and optimise the domestic business environment are expected to deliver ample opportunities, says Fung Business Intelligence MD Chang Ka-mun. Moreover, the increasing influence of young consumers – particularly the “post-90s”, “post-95s” and “post-00s’ generations, and of “small-town youth” – will help fuel growth in China’s commercial sector.
“The past year saw significant challenges for China’s commercial sector,” he says. “These will linger. But the imminent first-phase China-US trade agreement will reduce business uncertainty and help regenerate economic and consumption growth.”
He noted that the Chinese government was continuing to boost consumption and support the growth of service sectors. “All this is likely to yield abundant opportunities for commercial enterprises in the year ahead.”
The 10 Highlights of China’s Commercial Sector series tracks how China’s commercial sector is evolving year by year, providing overseas enterprises and investors with insights into latest trends and issues. It is a research partnership between Hong Kong-based Fung Business Intelligence and the Secretariat of the Expert Committee of the China General Chamber of Commerce, in Beijing.
“For this, our 17th edition, we jointly garnered the views of more than 160 leading experts in a report we believe points the way for key development trends in China’s commercial sector in 2020,” said Chang.
The 10 Highlights of China’s Commercial Sector for 2020 are:
1. Services consumption is a key driver of consumer market growth; further improving China’s consumption structure and business environment.
2. Night-time shopping and consuming will proliferate, bringing new growth opportunities.
3. Services consumption continues to boom; catering industry thrives and enters a smart new era.
4. Transformation of consumer market and circulation sector accelerates; creating a stronger domestic market.
5. Innovative retail formats and new business models become evident, capturing diverse and fast-changing consumer demands.
6. Digitalisation becomes the “new normal”; revolution in the circulation industry facilitates reconstruction of production processes.
7. Renovation of pedestrian streets facilitates consumption upgrading – a trend for coordinated development between commerce, tourism and cultural businesses
8. Community retailing shifts towards services; “last-100-metre” retail gains attention.
9. Joint efforts to promote rural e-commerce, food traceability and poverty relief lead to mutual gains.
10. Agricultural distribution channels accelerate transformation; rural issues and consumption upgrading are better addressed.