Table of Contents
Executive Summary
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- The market
- Companies and brands
- Tech giants dominate the market
- Innovative online experience
- Instant response to consumer feedback
- The consumer
- Online channel is part of daily life
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- Figure 1: Purchase channel, September 2019
- Online shopping is dominant but physical stores remain popular in drinks, home appliances and medicine
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- Figure 2: Channel preference, rank by the gap between online and offline, September 2019
- Super-fast delivery for fresh produce and restaurant food is most common
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- Figure 3: Instant delivered products bought, September 2019
- Satisfying immediate needs
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- Figure 4: In-store shopping triggers, September 2019
- Omnichannel experience sees early success
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- Figure 5: New retail experience, online and offline retail, September 2019
- Open-minded about sharing personal data
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- Figure 6: Attitudes towards personal data usage in new retail, September 2019
- What we think
Issues and Insights
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- Efficient delivery networks drive both sales and profits
- The facts
- The implications
- From social e-commerce to social retail in physical spaces
- The facts
- The implications
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- Figure 7: LEGO’s virtual pop-up in London, February 2019
- The rise of cross-border e-commerce
- The facts
- The implications
The Market – What You Need to Know
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- A positive outlook on New Retail
- Residence in lower tier cities will drive growth
- B2C dominates the online market place
Market Size and Forecast
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- Introduction
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- Figure 8: China – new retail (combined B2C + C2C+ online takeaway foodservice (OTS)) market value, 2014-24
Market Drivers
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- Opportunities in the lower tier cities
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- Figure 9: Real growth of per capita disposable income and expenditure, by urban and rural China, 2017 1Q-2019 3Q
- Slowing yet robust growth in online retail sales
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- Figure 10: YOY growth of online retail sales and online retail sales of physical goods, Jan 2018 – Oct 2019
- Figure 11: Percentage of physical goods of accumulated online retail sales, Jan 2018 – Oct 2019
- Online shopping user base keeps expanding
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- Figure 12: Online shopping user base and penetration, Jun 2016 – Jun 2019
- Well-positioned policy supports cross-border e-commerce
Market Segmentation
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- The fast growing B2C market
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- Figure 13: China - business-to-consumer (B2C) e-commerce market value, 2014-24
- C2C market impacted by new e-commerce law
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- Figure 14: China - consumer-to-consumer (C2C) e-commerce market value, 2014-24
- Online takeaway services
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- Figure 15: China - online takeaway services (OTS) market value, 2014-24
Key Players – What You Need to Know
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- Highly concentrated market
- Bottom up from consumer to manufacturer
- Online ventures in the offline space
Market Share
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- Winners take all
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- Figure 16: Share of B2C + C2C market (by GMV), 2018 and 2019
- Pinduoduo is a rising star and new challenger
- Duopoly in the online delivery market
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- Figure 17: Share of the online delivery market (by GMV), 2018 and 2019
- Ele.me catches up by integrating into Alibaba’s New Retail ecosystem
Competitive Strategies
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- Live streaming and e-commerce go hand in hand
- All-inclusive loyalty programs
- Consumer to manufacturer
- Engaging interfaces with content
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- Figure 18: Tmall Flagship Store 2.0, September 2019
Who’s Innovating?
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- Tmall celebrity stores
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- Figure 19: Li Jiaqi’s and Jing Tian’s Tmall Global exclusive store
- JD brings art to life
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- Figure 20: JD.com’s Bring Art to Life collection, October 2019
- OTC medicine vending machines
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- Figure 21: FreshHema’s medicine vending machine
- Taostyle multiband store
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- Figure 22: Taostyle store at Hangzhou Kerry Center
- Anime and food delivery go hand in hand
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- Figure 23: Zhai e kuai joint membership promotion
- JD’s future store
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- Figure 24: JD E-SPACE in Chongqing
The Consumer – What You Need to Know
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- Cross-border platforms more attractive to female shoppers
- Lower tier city residents favour physical shopping experience
- Attract high earners with service and activities
- Live-stream shopping still has room to grow
- New Retail goes beyond just shopping
Shopping Channel Used
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- Fashion products and packaged food are most bought consumer goods
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- Figure 25: Products purchased in the past 6 months, September 2019
- More electronics purchase taking place online
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- Figure 26: Purchase channel, September 2019
- OTC medicine/health supplements and alcoholic drinks still have room to grow online
- Domestic comprehensive websites are the go-to places, especially for packaged food
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- Figure 27: Online purchase channel, September 2019
- Cross-border websites
- Gaining popularity in BPC, alcohol, and health and wellbeing
- Target females and seek increments from males
- More residents in tier one cities are buying online, particularly from abroad
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- Figure 28: Purchase channel, selected consumer goods, by city tier, September 2019
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- Figure 29: Online purchase channel, selected consumer goods, by city tier, September 2019
Category Channel Preference
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- Offline is favoured for food and medicine
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- Figure 30: Channel preference, rank by gap between online and offline, September 2019
- Signs of offline revival for home appliances
- Buying fashion and BPC products online is new normal
- Younger consumers lean towards online channel
- Tier two and lower tier city residents have a strong affinity for offline shopping
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- Figure 31: Channel preference for selected products, by city tier, September 2019
- Low price is not enough to generate offline purchase
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- Figure 32: Channel preference, by consumer attitudes towards price and convenience, September 2019
Super-fast Delivery
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- Delivery service is most popular for fresh groceries and restaurant food…
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- Figure 33: Instant delivered products bought, September 2019
- …And will expand into other categories in the near future
- Help consumers to develop an super-fast delivery habit
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- Figure 34: Instant delivered product bought, by household income, September 2019
- Impatience is a virtue
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- Figure 35: Instant delivered product bought, by consumer attitudes towards price and convenience, September 2019
- Unlocking the potential in lower tier cities
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- Figure 36: Instant delivered product bought, by household income, September 2019
In-store Shopping Triggers
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- Seeing it and touching it
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- Figure 37: In-store shopping triggers, September 2019
- Need for instant gratification
- Add-on services and entertainment are desirable for mid and high earners
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- Figure 38: In-store shopping triggers, by household income, September 2019
- Attract men with better product services and women with perks
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- Figure 39: In-store shopping triggers, by gender, September 2019
- Tier one city residents attracted to good bargains as well
New Retail Experience
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- Omnichannel makes purchase and stock checking easier
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- Figure 40: New retail experience, online & offline retail, September 2019
- Visual search and purchase when watching live streams seeing early success
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- Figure 41: New retail experience, new retail features, September 2019
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- Figure 42: New retail experience, new features, by gender, September 2019
- Streamline consumer loyalty
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- Figure 43: New retail experience, cross-channel loyalty programs, September 2019
- Younger consumers cultivating a habit for using New Retail
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- Figure 44: New retail experience, by generation, September 2019
Attitudes towards New Retail
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- Consumer reviews and sales representatives are equally important
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- Figure 45: The role of communicating with salespeople and consumer comments, September 2019
- Privacy being traded off for precise product recommendation
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- Figure 46: Attitudes towards personal data usage in new retail, September 2019
- Online channel remains competitive in price and choice
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- Figure 47: Attitudes towards price and budget control, September 2019
- Delivery should be faster to satisfy the need of lower tier cities
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- Figure 48: Attitudes towards convenience and delivery, September 2019
- More than just shopping
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- Figure 49: Attitudes towards loyalty programs and shoptainment, September 2019
Meet the Mintropolitans
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- Cross-border platforms appeal more to Mintropolitans
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- Figure 50: Products purchased on cross-border websites, by consumer classification, September 2019
- Engage MinTs with additional services
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- Figure 51: In-store shopping triggers, by consumer classification, September 2019
- Leverage tech to engage MinTs
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- Figure 52: New retail experience, by consumer classification, September 2019
- Low prices are not enough to attract MinTs
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- Figure 53: It's cheaper to buy the same product online, by MinTs vs non-MinTs, September 2019
- Figure 54: Both online and offline shopping should be more entertaining, by MinTs vs non-MinTs, September 2019
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- Figure 55: It's worthwhile to authorise brand to access my personal data for the personalised recommendation of products, by MinTs vs non-MinTs, September 2019
Appendix – Market Size and Forecast
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- Figure 56: China – new retail (B2C + C2C+ online takeaway foodservice (OTS)) market value, 2014-24
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Appendix – Methodology and Abbreviations
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- Methodology
- Fan chart forecast
- Abbreviations
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