Shopping Trends In China

Online shopping in China

Single’s Day or Guanggum Jie; is a shopping holiday popular among Chinese that celebrate their pride in being single. The date November 11th (11/11) represents a person who is alone. This is an annual 24-hour sale hosted by Alibaba Group. Think Cyber Monday or Black Friday. Alibaba smashed through its Singles’s Day sales record in 2018 with roughly one third more sales volume in a single 24-hour period than the three biggest U.S. shopping days combined.

Online shopping in China is a much bigger deal than it is in western countries. According to the National Bureau of Statistics, 802 million internet users in China had an online shopping experience.

While the customers enjoy the casual window shopping as much as anyone, they value the brick and mortar retail experience less than consumers in the west, while they value e-retailing more. A survey of more than 15000 global online shoppers recently released by PwC found that 75% of Chinese shop online weekly, compared with the global average of 21%.

Trending Social Commerce

The trend of ‘Social Commerce’ has also exploded popularity over the past two years, posing a threat to traditional e-commerce players. The potential for social commerce is huge because people like to but what their friends are purchasing on the social commerce sites. Many apps offer shopping benefits like ‘Buy more together’ making social commerce more attractive to the customers.

Social commerce uses specific strategies to target their customers. The most important factor is the age group. It makes everyone involved in as a customer and as an influencer. For example, the app ‘Little Red Book‘ is a combination of Instagram and Amazon.

The benefits of social commerce are more than compared to traditional e-commerce. These apps utilize social data of the customers, coming to understanding what motivates the purchases. This gives the sellers a better scope for marketing the right product to the right customer.

So what is the brick-and-mortar industry’s future?

China’s retail sector was highly fragmented by small independent retail outlets, however, it is transformed to Hypermarkets, Supermarkets, Discount and convenience stores. China’s consumer trend presents that details choices are based on availability, convenience, and added-value in the store products and services that cater to their aspirational needs.

The future for retail stores is for sure decreasing, but it will never fade out. Retails are the largest sources of jobs in the economy. Chinese companies are aggressively exploring how to save Main street and middle-class jobs. The Un-manned stores are gaining popularity too. With the staff-less stores of Amazon-go format in the United States, the concept has grabbed headlines in China. But will these stores become a sustainable model in China?

Alibaba is continuing with its online-to-offline (O2O) strategy by increasing its stake in China’s hypermarket chain, Sun Art Retail, offering of combining online and offline services. Other giants such as JD .com will follow the suit by increasing their investment in the brick-and-mortar grocery segment.

 

Sonia Naikavde

MBA candidate 2019