On 6-8 June 2022, ChinaEU took part in Shoptalk Europe, the largest show dedicated to the future of the retail sector. Over 3,000 representatives from large retailers and brands, startups, technology companies, investors, media and analysts gathered at ExCel London for the three-day event.
Claudia Vernotti, Director of ChinaEU, joined a discussion with Mei Chen, Head of Fashion and Luxury UK, US and Northern Europe, Alibaba Group, moderated by Deborah Weinswig, CEO and Founder of Coresight Research, on China’s most innovative retail experiences and what these innovations mean for Europe.
What emerged from the panel is that China’s retail growth story is inspiring not only for the impressive performance of its e-commerce market, but most importantly for the cutting-edge technologies and innovative business models that Chinese players have created. All this can be summarized with the concept of new retail – a term coined by Alibaba in 2016.
In the new retail age, the battle between offline and online channels disappears; users are uniquely identified across different channels; physical stores are re-invented to become experiential stores, fulfilment centers and data collection sites. In the new retail organization, consumers take a new role. From mere shoppers they are placed at the center of the organization, becoming active contributors to the growth of the brand and even advisors for the creation of new products; an increasingly used model in China, which goes by the name of consumer-to-manufacturer.
For an in-depth analysis of the new retail revolution in China and its impact on the rest of the world, we suggest to read the book New Retail Born in China Going Global, by Ashley Dudarenok and Michael Zakkour.
This revolution is not alien to European retail leaders, who have long been discussing the urgency to set up an omnichannel commerce to deliver an improved customer experience.
Among the new shopping formats born in China and taking the rest of the world by storm is live-streaming e-commerce. Dubbed by some as “tele-vending 2.0” it is a new e-commerce format that combines social commerce with entertainment. In London, we touched upon the importance of live commerce in China over the past six years and the shifting role of KOLs – or online influencers, to the benefit of corporate livestreaming – a phenomenon Xinxuan, a leading player in China’s live commerce ecosystem, has been anticipating and advocating for. Born in China, live commerce is becoming popular also in Europe, with the emergence of many SAAS platforms allowing brands and retailers to integrate shoppable videos into their own proprietary websites and apps; OOOOO, Bambuser, GoLive, Firework, and QLive are only some of the options available for merchants, besides the increasing number of social media platforms and marketplaces now offering live shopping solutions.
Sustainability was a recurring topic at this year’s Shoptalk event and touched open also in the China panel. This is something particularly dear to European retailers, who have been setting records in everything from creating eco-design private label goods to reducing plastic and encouraging greener and healthier choices by consumers. Chinese consumers – especially Gen-zers, or post-2000s, the most critical growth driver in China’s retail consumption – are increasingly sensitive to issues linked to the environment and social responsibility, so brands who can show their concrete contribution beyond green-washing will be rewarded.
We talked about Chinese consumers as the most sophisticated consumers in the world. They are extremely open to trying new applications; they are essentially a mobile-first and cashless society, extremely tech-savvy across all generations, avid users of social media, short videos, augmented and virtual reality applications, and automated solutions. And to complicate matters, they are extremely spoiled by the variety of offerings at their disposal, resulting in a fierce battle between retailers and tech companies to gain their attention and deliver personalized offers to them.
As a result, China is an ideal place where brands can experiment with new solutions that fully integrate online and offline channels, delivering customized and unforgettable shopping experiences to consumers. Some of those experimentations could then be adopted also in Europe, for consumers back home. Just like Rhea Vendors is doing by adopting VR technology to transform the waiting time at an automated coffee machine into an immersive experience into digital art.
The panel concluded that the transfer of new retail experiences is most effective when the social and cultural context is taken into consideration, in both directions. To succeed in China, it is important that brands and retailers understand how to navigate and partner with the right social media and online channels, which are not the same ones used in the West.
Click here to view the highlights of Shoptalk Europe 2022.