- In 2019 H1, the total retail sales of consumer goods reached RMB 19.521 trillion, representing an increase of 4% YOY. Online retail sales in China reached RMB 4.816 trillion, with 17.8% growth YOY, according to the National Bureau of Statistics of China.click for more…
INSIGHT & IMPLICATION: The overall retail sales of consumer goods 2019 in China has continued to grow, especially online. Lower tier cities and even rural areas are gradually becoming the growth drivers as their infrastructure is becoming more developed. Furthermore, new retail is also penetrating lower tier markets, recruiting even more new consumers. That said, brands should be aware that a simple “copy and paste” model utilized in the upper tier markets cannot always be applied directly in the lower tiers because the media habits, life values and purchasing funnel of these consumers can be radically different.
- Alibaba plans to launch a new service which provides a hands-on guide to overseas merchants on how to open a store on T-mall Global, with the goal of increasing foreign brands on the platform by 40,000 in 3 years and generating more than 50% of company revenue from outside China by 2025. click for more…
INSIGHT & IMPLICATION: Given the cooling economy in China and emergence of aggressive eCommerce competitors like Pinduoduo, Alibaba has made inroads into Southeast Asia through the acquisition of Lazada and increased investments to unlock lower-tier markets which have already contributed to 20% of the total company’s purchase orders. The new service will help foreign brands understand the vast, diverse and digital-facing Chinese market and how Alibaba can improve the operational efficiency through efficient and effective use of data. That said, in order to truly develop a business in China, brands need to understand the market landscape and the ever-evolving shopper-retailer-brand relationship so they can tailor products, messaging and market strategies to grow in China. This is why “Tmall only” foreign brands might face a serious challenge in this aspect, because their budget constraints and remote distance will not necessarily be able to provide them with a stable, sustainable long term growth.
- According to iiMedia Research, the number of online travel users in China reached 360 million in 2018. It is estimated that the number of online travel users will reach 390 million in 2019. click for more…
INSIGHT & IMPLICATION: In recent years, in order to attract more domestic travelers, small towns and villages have started developing their own attractions and more comprehensive tourist offering. As Chinese consumers increasingly appreciate traditional culture, local living experiences and food offered by these destinations are becoming key factors in their decision making. At the same time, online travel agencies (OTAs) have launched a wide range of themed tours like family, ice and snow, island, hiking, and seasonal tours. Young adults (aged 26-35) tend to be the core target for OTAs because they crave different experiences. Brands should consider what role they can play in enhancing the travel experiences of these consumers and how this can help brands achieve their marketing and business goals.
- China’s largest online travel agency Ctrip announced that it has integrated 10 ride-hailing services across the world into its own app to offer various mobility services such as private ride booking or a chartered van rent in 785 global cities. click for more…
INSIGHT & IMPLICATION: The ride-hailing service platforms Ctrip has integrated include Lyft (USA), Grab (Southeast Asia), Cabify (covering Portugal, Spain, Latin America), Gett (UK, Russia and Israel), etc. Along with the offered translation service, the integration of these ride hailing services will make the travel experience more seamless and convenient. While being excited by traveling overseas, many Chinese consumers are somewhat anxious about the new environment and unfamiliar culture. Brands should consider what their role could be in providing anxiety relief while making the travel experience more convenient and enjoyable.
- In 2019 Q1, the transaction value from third party mobile payments reached RMB 55.4 trillion, up by 24.7% year on year, Alipay accounting for 53.8% of China’s mobile payment market. click for more…
INSIGHT & IMPLICATION: As the mobile payment market continues to grow rapidly, cash is gradually fading out from everyday usage along with ATM cash withdrawals. The range of services available through mobile payments is expanding more than ever, often making even bank cards obsolete in daily usage. This is why mobile payment apps such as Alipay are becoming ecosystems, offering a wide range of services and features that can allow brands to engage with their consumers in a more meaningful way. In order to do this, brands need to understand how mobile payment users utilize each feature and develop an approach that will provide true value to the target audience while helping brands achieve their marketing and business objectives.
Have a great weekend!
