Providing consumers with an ‘experience’ is essential for brands entering and operating in China. This was one of the key messages from CBBC’s most recent China Chat event, which took place on 25 October 2023 at CBBC member Sybarite’s London offices
Now that China is firmly free from the spectre of Covid controls, brands in China and the UK are naturally asking questions about the current state of the China market, what we can expect from the new cohort of Chinese consumers, and how to meet Chinese consumers’ expectations.
One of the key takeways from CBBC’s October 2023 China Chat event was that whilst China’s economic growth appears to have plateaued, brands should not lose faith in the market. Despite reported concerns over the country’s macroeconomic slowdown, China Chat speakers Antoaneta Becker (Director, Consumer Economy at the China-Britain Business Council); Simon Mitchell (Co-Founder of Sybarite); Champa Selim (Deputy Director of Greater China and Southeast Asia at Bicester Village), and William Lyon (CEO and Cofounder of ArcOn Brands) , all expressed positive impressions of bustling Chinese shopping districts.
China is still a “wonderful market” said Simon Mitchell, adding that it still presents many opportunities for Western brands. Although there is now fierce competition in the market as local brands gain 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 Chinese tourists travelling further afield has dipped when compared to pre-Covid levels. This was reflected in China’s recent week-long National Day Holiday, known as ‘Golden Week’. Anecdotally, Champa Selim said that Bicester Village did not witness the same influx of tourism as in 2019. There are several explanations for this, including the fact that flights are still costly and have not returned to pre-Covid levels of availability. It will take time to get back up to pre-Covid levels.
Moreover, there has been a change in consumer demands and expectations, especially among young, affluent consumers, putting UK retailers and venues that traditionally performed well with Chinese tourists in competition with a wider market. Unlike prior to Covid, young Chinese consumers are leaning towards small “quiet luxury” brands instead of the big labels, and brands will have to wait and see how this new trend continues to evolve. Giving VIP shoppers top-notch service (including localised service offerings such as Mandarin-speaking staff and Chinese payment options) and creating a warm and inviting atmosphere can go a long way.
Most importantly, Chinese consumers are seeking an “experience” when shopping. Sybarite and ArCon both noted key areas in which Chinese consumers are seeking out such 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 a store to see the product in-person. Localisation is key to facilitating this, and brands need to embody this in everything they do. Successful retail stores 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 rather 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 described his thought process behind designing the SKP and SKP-S department stores 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 many will already be aware, China’s digital community is incomparable to the rest of the world, and brands that wish to engage in the China market need to define their brick-and-mortar strategy hand in hand with their digital strategy. Western brands scaling into retail (for example, after launching on Tmall Global) need to consider how they’re selling to Chinese consumers. For example, adding a touch of the fantastical can transport customers on a magical journey during their shopping experience, leaving a lasting impression.
