The popularity of e-commerce platforms is leading to a clear slowdown of traditional retail in China, but the future lies in online to offline (O2O), according to Havas, and there’s a major content opportunity there for local brands.
Writing for WARC, Dennis Potgraven, Chief Strategy Officer for Greater China, Havas Group, notes that in 2018 and 2019 the closure rates for department stores and hypermarkets were already double the number of new openings.
And figures from the China Commerce Association for General Merchandise indicate that 80% of bookstores and 30% of clothing and shoe stores will close down over the next five years.
But consumers don’t want to retreat completely online either. Havas’s ‘prosumers’, the group who are the earliest adopters of new products and services, favour O2O – online to offline or ‘new retail’.
O2O has of course become synonymous with China’s e-commerce environment after developing exponentially since Jack Ma stated five years ago that there will be no pureplay online stores eventually.
The issue now, though, says Potgraven, is that Chinese e-commerce platforms need to move beyond their admitted proficiency in retail technology and logistics.
Most of them are primarily focusing on delivery convenience, understandably so since 42% of Chinese prosumers are “used to having everything delivered immediately so that I no longer need to shop in stores.” Compare that figure with 19% of French prosumers.
But ‘new retail’ Chinese consumers want retailers to go further and manage all their pain points in the entire purchase journey, including anticipating shopping needs and hyper-customised offerings.
They also want more real advice beyond sales talk and it is here that Havas research shows the content opportunity: well-appreciated content has a 72% correlation with a better perception of a retail brand and this is something international brands appear to do better than domestic brands.
“This is clearly a missed opportunity as there is a hunger for content by Chinese consumers, especially inspiring, educational and helpful content,” explains Potgraven.
“Think of it this way. Chinese consumers don’t want to buy the best camera; they want to become the best photographer.”
For more details, read Dennis Potgraven’s article in full: China may be a forerunner in e-commerce, but is letting us down in content.
Sourced from WARC