Retail in Asia

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#RCAsia17 : Alibaba, the customer-oriented gateway to China

Retail in Asia enhanced partner of Retail Congress Asia

On 10 and 11 October 2017, Retail in Asia, as enhanced partner of the Retail Congress Asia Pacific 2017 (#RCAsia17), has joined the event to listen to the main actors in the retail landscape.

We will soon publish relevant content from the Congress, along with interviews, and takeaways from the guests.

SEE ALSO : Alibaba to open its first physical mall

Source : Retail Congress Asia Pacific

Guru Gowrappan, Global Managing Director of Alibaba Group, the biggest virtual shopping mall operator in China, was the first invited speaker from the retail industry to open the Congress. His plenary gave an overview on the Chinese markets and his experience in interacting with brands willing to target Chinese consumers.

Many brands are choosing Alibaba because it is able to think from a Chinese perspective. The know-how behind Alibaba is a data-driven customer-oriented approach.

Guru presented some data from recent research to explain the peculiarity of Chinese market and the misconceptions which often drive business decisions.

There are three main segments in China market: millennials, extensively researched for fashion and cosmetics; young parents, who spend 65% of their income on their children; men, who are recently dominating the skincare market.

Millennials are young consumers who start their purchase journey online. They search, listen to influencers and reviews from their peers, and make aware choices.

Young parents are driving sales and trends in kidswear. Many luxury brands are focusing on kidswear for the development of new collections to educate the youngest consumers and become their life companions.

Skincare, and more broadly personal care, is becoming a men’s matter more than women, or at least Chinese consumers are less shy in revealing the secret for a skin that does not age.

The most common mistake in targeting China is to think of a segmentation. Guru explained why in tier 1 and 2 cities, everybody shops. There is a growing middle-class with buying power with a huge appetite for International products, however, brands often take it wrong.

eCommerce is not a mere selling platform. Offline space where the cultural exchange between brands and potential consumers takes place, online should be considered the same, acknowledging experience is recreated through other forms.

The sectors destined to grow are definitely the so-called trade-up categories namely musical instruments, home décor, cosmetics, food, all international products.

Guru explained that once individuals earn more, they tend to spend the surplus in unnecessary goods which are interpreted as a reward to themselves and they look for something special.

SEE ALSO : Is it the end of e-commerce?

The customer journey which leads to the purchase of those goods includes 4 steps: search, as the first encounter with a product happens while searching per category; browsing, as platforms like Alibaba offer a wide range of choices; engaging, which is represents the selling point for the brands to stand out from the crowd; experience, which is often consumed offline instead.

The take-away from the plenary is definitely that international brands need to re-think themselves from a Chinese perspective and use the last technology to enhance engagement and experience.