8
Retail
Trends
in China
WHAT’S IN STORE FOR THE
YEAR OF THE ROOSTER
More of
everything for
the world of retail
Every year in China, we predict a period of unprecedented change
for the 12 months ahead, and all indications are that 2017 will be
no exception.
In the Year of the Rooster, we expect more of everything for the world of retail:
bigger challenges, but also bigger rewards; heightened consumer expectations, and
greater wins for the retailers and brands that meet them and even greater ones for
those that exceed them.
Change has become the only constant in the Chinese market, and that change is
happening faster than ever.
This makes retailing an enormous challenge. The retail sector is at the nexus of the
biggest forces shaping people’s lives: digitization, brand building and a rebalancing of
the Chinese economy away from manufacturing towards services and consumption.
To help you focus on what’s most important right now, we’ve distilled this vast
ocean of change into 8 key retail trends in China for the Year of the Rooster. These
are the areas we think you and your teams should make your top priority.
We’ve drawn on the unparalleled insight into the Chinese retail market of Smollan
and WPP organisations.
To learn more about Chinese New Year and how this national holiday unlocks year-
round opportunities for brands and retailers, download this informative and visual
BrandZ study: wpp/chinanewyear.
We hope this will help develop your insight into China, and help you better
understand the ever-changing business of retail in this dynamic market.
Here’s wishing you a very happy and successful Year of the Rooster.
Gong xi fa cai.
Mike SmollanDavid Roth
SmollanWPP
The rapid expansion of China’s middle classes is transforming the
consumer landscape. These increasingly affuent consumers are
seeking ways to lead healthier lives, fuelling demand for products and
brands from across the globe that are linked to health and wellness.
In the Year of the Rooster, the markets
for healthy food, drinks and ftness will
expand. The challenge for brands will be
in remaining sympathetic to the country’s
wellness traditions, while providing
enough modern luxury to satisfy people’s
desire for hi-tech solutions.
Global ftness and lifestyle brands are
already making a big impression in China,
and many have announced ambitious
launch and expansion plans. These include
apparel brands Lululemon and Under
Armour, along with Nike, ftness club chain
Virgin Active, and Adidas, which has plans
to open 3,000 new stores in China by
2020.
The pursuit of ftness and wellbeing will
also prompt a rise in niche health and
wellness retailers. Smaller store footprints
that can offer a more personalized service
from knowledgeable sales representatives
will appeal to health-conscious
consumers seeking expert guidance. This
shift explains the recent rise of Chunbo,
a niche B2C e-commerce platform
specializing in healthy, organic foods.
Health equals happiness2
Augmented Reality (AI) is providing a fresh take on
gamifcation that retailers are realizing can take the
shopping experience – and customer engagement – to a
whole new level. Dare we say it …it’s a game changer.
In it to win it
Gamifcation has long been deployed as a
way for brands to tap into the innate human
desire to compete for rewards and recognition.
Service providers in China have frequently been
the fastest off the blocks, and have had huge
success. Tencent generated incredible levels
of engagement with their WeChat red envelope
(Hongbao) campaign to attract consumers
to WeChat Pay, which saw an astonishing 8
billion red envelopes sent during Chinese New
Year 2016. Red paper envelopes traditionally
contain ‘lucky money’ as gifts at festival time.
Likewise, Alibaba’s used gamifcation in the
loyalty program for its Sesame credit rating
system, and the taxi app Didi uses promotional
games and lucky draws to boost loyalty.
But it’s the global phenomenon that was
Pokémon GO in 2016 that shows how
augmented reality can add a whole new
dimension to gamifcation. For retailers,
AR games stand to generate a wealth of
information about customers’ preferences and
behavior. Games will help brands see which
items are considered in the purchase cycle,
see how a customer shops, and gain additional
insight on what drives the fnal purchase. For
the customer, AR promises to bring to life – or
virtual life – information on product features
and benefts, promotions and price-scanning
features.
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