China Chat October 2023 - The Future of Experiential Retail in China and how UK Brands can benefit from its Innovation
“When we look into offline retail, design and architecture, it's fascinating to see a beautiful combination of nature, humanity and business. It's even more fascinating to see Chinese consumers are pushing the industry to think more and think outside of the box. A wonderful event brings lots of inspiration to us. Thank you CBBC for organising such a wonderful event. Thank you Sybarite!" – Ada Yang - Senior China Market Manager at Molton Brown.
Leading the conversation, CBBC welcomed the following speakers Antoaneta Becker, Director, Consumer Economy, China-Britain Business Council; Simon Mitchell, Co-Founder, Sybarite; Champa Selim, Deputy Director of Greater China and Southeast Asia, Bicester Village & William Lyon, CEO & Co-Founder of ArcOn Brands.
The China Chat was split into three main topics: the current state of the China market; an update for tourism-dependent businesses and what we can expect from the new cohort of Chinese consumers, and how to meet Chinese consumers' expectations.
Kicking off the discussion, our speakers addressed the state of the China market from their on- the -ground perspective. Whilst China’s economic growth appears to have plateaued, brands should not lose faith in the market. Despite reported concerns over China’s macroeconomic slowdown, all the speakers expressed positive impressions of bustling Chinese shopping districts. China is still a “‘wonderful market” said Simon, and presents many opportunities for Western brands. For instance, in Macao, luxury food and hospitality brands are booming with the bounce back of domestic tourism. Although there is now fierce competition in the market as local brands are gaining popularity, there is still a desire amongst consumers for Western brands. Provinces such as Guangdong, nearby Southeast Asian Countries, and places such as Hong Kong, are hugely benefitting from a boom in Chinese tourism.
However, the number of international tourists has dipped when compared to pre-COVID levels. This was reflected in China’s recent holiday – ‘Golden Week’. Anecdotally, Bicester Village did not witness the same influx of tourism as in 2019. There are several explanations for these lower levels of tourists, including flights are still costly and limited and together with rigid visa requirements. It will take time to get back up to pre-Covid levels. Further, there has been a change in consumer demands, there is an increase in competition among retailers, attraction sites and hospitality venues as young affluent Chinese consumers have changed their expectations. Unlike pre-COVID, young Chinese consumers are leaning towards small “quiet luxury” brands instead of the big labels and it will be interesting to see how this new trend continues to evolve. Giving VIP shoppers a top-notch experience and creating a warm and inviting atmosphere can go a long way.
Moreover, Chinese consumers are seeking an "experience" when shopping. During the second half of the China Chat, Sybarite and ArCon brands touched upon key areas on which Chinese consumers are seeking out an “experience”. One example of this is offline to online channels, whereby consumers are seeking a seamless experience that allows them to shop online via Tmall but also travel to the store to see the product in-person. Locality is key to facilitating this, and brands need to embody this in everything that they do. Successful retail stores should embrace and infuse local elements and rich context into their brand, creating a unique and authentic connection with their customers.
In addition, Chinese consumers are increasingly appreciating the stories behind brands and Western brands should not rely on repeated purchases to succeed in the market but on creating a retail experience for the customer. Brands with a rich heritage can always innovate by bridging their historical roots with modern design, amplifying the shopping experience in the process. For example, Simon Mitchell of Sybarite commented on his creative ideas in designing the SKP and SKP-S malls in China with the newest in Chengdu being inspired by the theme “Life on Mars”, resulting in a unique mix of "70% experience, 30% retail stores".
As highlighted throughout this China Chat, the Chinese digital community is incomparable to the rest of the world and brands who wish to take part in the China market need to not only define their digital strategy but also their brick and mortar strategy. Western brands scaling into retail experience need to consider how they’re selling to Chinese consumers. For instance, adding a touch of the fantastical can transport customers on a magical journey during their shopping experience, leaving a lasting impression.
"The key takeaways are about allowing customers to inspire you as a brand in order to meet them where they are, and as its 2023 leveraging the power of omnichannel to fully deliver a futuristic consumer experience. Thanks so much to Antoaneta Becker and the CBBC team for an informative evening and to Simon and the Sybarite team for sharing your space." - Zarina Kanji, Head of Business Development & Marketing for Tmall Global at Alibaba Group UK & Nordics.
Towards the end of the China Chat, the panel opened the floor to questions, and this invited an engaged discussion about creative ways British brands can enter and conquer the Chinese market.
Thank you again to everyone who attended the gathering and to Simon Mitchell of Sybarite, Champa Selim of Bicester Village and William Lyon of ArcOn Brands, for making the evening memorable with their wit and wisdom!
We look forward to welcoming you all again to the next China Chat. China Chat will be held quarterly to update UK businesses with the latest Chinese market and consumer trends.
Please contact us if interested in joining an upcoming China Chat speaker panel and sharing your insights with us. Please contact Antoaneta.firstname.lastname@example.org.