Brands plan for China recovery | WARC | The Feed

Brands plan for China recovery

Anticipating a wave of “revenge spending” as China moves away from its zero-Covid strategy, mall owners report a surge of new tenants, while online retail platforms are busy improving the user experience.

Why it matters

Many brands attracted to China’s huge market saw growth stall over the past three years, but as the economy reopens there’s a renewed sense of optimism. However, there is some uncertainty as to just how strong the recovery will be and whether increased consumer spending will be cautious rather than extravagant.

What’s happening 

• A study from Bain & Company and Kantar points to pent-up demand for packaged food and personal-care products, with Gen Z, in particular, driving revenge spending in cosmetics. 
• “At least” 13 global chain-store operators are in the process of opening their first mainland Chinese shops in Shanghai, according to the South China Morning Post.
• Tenants include Japanese food and drink maker Suntory, French candlemaker Trudon and Swiss furniture maker USM.
• Meanwhile, Alibaba is focused on optimising the user experience across its online platforms, Jing Daily reports, with more short videos, AR trial fittings and metaverse activations. 

Key quote

“In 2023, a strong recovery of shopping activities will be seen from the second quarter. More lease agreements will be signed as new-energy vehicles, personal care brands, garment makers and outdoor sportswear companies look to open new stores” – Sherril Sheng, research director at real estate firm JLL China.

Sourced from South China Morning Post, Jing Daily