Céline DELACHARLERIE,our Innovation Retail Asia Correspondent, gives an update on the situation of retailers in China in the face of the Covid-19 health crisis.
The new face of retail in China now involves shopping communities grouped by neighbourhood, sellers converted into live video hosts, QR color codes, temperature maps and 3D store reproductions.
While the rest of the world remains heavily impacted by the pandemic, China is slowly recovering from the crisis. Through temperature control and travel tracking made mandatory by the government to enter the stores, China was able to reopen its physical stores quickly while controlling the pandemic.
Although the frequency of store visits has nevertheless dropped considerably, the ability of traders to swivel very quickly towards e-commerce, even small merchants and farmers, has made it possible to limit the damage. Shopping centers have faced a real crisis, forcing them to redouble their creativity thanks to live streaming for example, while some brands have launched more immersive online shopping experiences thanks to 3D.
The results are positive: trade in China has returned to growth since August, recording for the first time in 2020 a growth of 0.5% compared to the previous year, according to figures from the National Statistical Office of China. The latest figures for November show a 5% growth in trade compared to last year, driven by telecommunication equipment and car purchases.
Five trade transformations in China following the pandemic
1) Presenting your health code at the entrance of the shops has become an habit
Since the lockdown, an automatically generated health code, accessible in WeChat and Alipay, must be shown at the entrance of the stores, the metro, etc. It changes color if the person came into contact with a confirmed or suspected citizen of being contaminated by Covid-19. The precise information about how the algorithm assigns the code has not been revealed. Users with a red code must be quarantined for 14 days, those with an orange code for 7 days and those with a green code can move freely.
Code generated from Alipay
2) Sellers and store managers have converted into “teleshopping” animators live on Internet
In order to reduce the losses caused by the forced closure of their stores, merchants turned to e-commerce and especially live streaming. Live shopping is a quick and easy way for these merchants to continue to connect with their customers through engaging videos on the most popular live streaming channels, which are Taobao Live (Alibaba) and Douyin, the Chinese name for TikTok. Listeners can buy the products they see during the stream by clicking on a link to buy. The pandemic has seen players as diverse as luxury brands, car sellers or farmers use this new sales channel galore. According to data from Taobao, at the height of the outbreak in China in February 2020, the number of merchants using the platform increased by 719% compared to the previous month.
Like many retailers around the world, Intime store chain, acquired by Alibaba in 2017, has been heavily impacted by the coronavirus. It has logically turned to live streaming and has not only been able to return to a normal operation since May, but also recover its losses, according to the Alibaba news website. With 200 live streaming sessions per day,operating non-stop from morning to night, and reconverting 5,000 sellers and store managers into animators and influencers on the internet.
3) Social apps can be used to organize neighbourhood stores for fresh produce
Local retailers and farmers have created groups on the WeChat social network app to allow residents of a neighbourhood to order and have fresh produce delivered to their homes.
Thousands of small online communities were created to facilitate the communication and delivery of merchants and farmers.
Merchants can inform all group members by message of what is available on the same day, and residents can ask questions directly. This allowed farmers and small neighbourhood traders to participate in e-commerce without having to develop anything, on a platform they know well. Many of them automated their operations by creating a mini-program in WeChat for their community, allowing them to communicate their inventory and allowing consumers to order and pay directly into the mini-program. Mini-programs are lighter, faster-to-develop apps that are directly integrated with WeChat.
Example of WeChat group:
Example of a farmer’s mini-program on WeChat:
4) Alibaba helps brands adopt 3D to recreate their stores or digital showrooms
Alibaba’s e-commerce platform, Tmall, launched large-scale 3D shopping at its major Tmall 618 trade festival in June 2020, a few months after the end of the lockdown in China.
The 3D shopping experience on Tmall aims to be interactive and immersive for users and incorporates many in-store buying elements. Users can browse 3D showrooms of more than 100 brands via their smartphone, and view products 360 degrees in their context.
One of the first star brands to experience it was IKEA, which fully replicated its Shanghai store in 3D. Subsequently, the technology was extended to brands of household appliances such as Siemens and Haier.
According to Alibaba’s figures, within 3 days of going online, 5 million people have experienced buying on Tmall in 3D. With 3D purchases, the average number of items added to the shopping cart by buyers was about 15 items, or 5 times more than before. After less than an hour and 20 minutes of the Tmall 618 festival, IKEA recorded the same number of transactions as its best in a day since the store opened. As of June 18, more than 30 million people had already made the purchase experience on the 3D shop, the conversion rate was multiplied by 9 compared to the average of the sector.
5) The card to reassure consumers about food products is encouraged by delivery platforms
The closure of restaurants as a result of the pandemic has accelerated a trend toward door-to-door food delivery. However, many Chinese consumers are wary of restaurant hygiene measures and prefer to cook at home. To reassure consumers that their meals are being delivered, most restaurants now provide a temperature map of employees who have interacted with the food product. The practice is not mandatory but is widely encouraged by delivery platforms like Ele.me and Meituan.
Article published 3 January 2021 by
Asia Retail Innovation Echangeur Correspondent