What learnings can we take from China, and what lasting changes can we expect to see in shopper behavior, demand and distribution?
“Unlike other countries, China had no warning – COVID-19 hit like a hammer.”
Providing tailored research, strategy and digital solutions, Mark Tanner and his team at China Skinny help over 150 brands enter and grow their businesses in China – the global epicenter of e-commerce, also the first country to deal with COVID-19. Opening our first eStoreAcademy webcast yesterday, Mark said, “Unlike other countries, China had no warning – COVID-19 hit like a hammer.” Even though the rest of the world soon realized it was coming, no one in retail could have been well enough prepared for the impact of the new Coronavirus. Now that we are emerging out of the immediate crisis and into a very different way of living, what learnings can we take from China, and what lasting changes can we expect to see in shopper behavior, demand and distribution?
Evolving preferences and demographics - are they here to stay?
Unsurprisingly, the homebody economy rapidly emerged when hard lockdown was imposed on Chinese cities. However, in China, e-commerce activity made a sharp rise in otherwise sluggish growth areas such as in lower-tier cities and among the older population, creating a whole new demographic for online sales. The shift, combined with adapted distribution strategies, has made a deep and lasting impact in China. It made me think about how the consumer profile will extend in other countries and what opportunities brands might have to list new products online to meet the needs of a new kind of online shopper.
Will social commerce come of age?
Mark talks about how COVID-19 has caused a wider diversification of commerce platforms with live-streaming available on most online stores. China’s WeChat, which is leading the world in social commerce, allows users to make direct purchases and share products and promotions without leaving the app. The WeChat mini-program has allowed manufacturers to rapidly launch a new online sales channel. The user experience is simple, quick and convenient. With WhatsApp finally trialing integrated payments, will social commerce see a similar increase in the West?
Adapting Go-To-Market Strategies
D2C is growing as a model for manufacturers with farmers supplying fresh produce direct to the door, and fitness brand Les Mills is now selling home workouts direct rather than via gyms and personal trainers. IKEA has begun to list products on Tmall, Alibaba’s B2C platform, wanting to make the most of increased demand for easy-to-install home furnishings. How will D2C develop in the rest of the world and will it be a threat or an opportunity for brands?
Mark shares many more fascinating insights during the broadcast, and I recommend you take a listen if you missed it. As he handed over to our CEO, Bartosz, it made me wonder how e‑commerce managers can find a way to cope with disruption from so many angles: the immediate changes in consumer preferences (which seem to be shifting daily); the changing requirements of online stores; and a disrupted supply chain - as Mark reminded us, China is “the factory of the world”.
Recommendations for e-commerce teams operating through crises
Let me finish by echoing some of Bartosz’s immediate recommendations for e-commerce teams operating through post-pandemic recovery:
- Your sales fundamentals should be recovering by now, driven by recovered Availability. If they are still falling behind scores from January 2020, you should focus on both Out of Stock and New Listings.
- Check if your competitors have increased their listings - maybe you should offset those activities. We have noticed an extensive increase in listings of SKUs as a means to battle out of stocks on hero products.
- Are you winning your BuyBox again? You should be by now. If not, talk to your CXO.
- Only when your Availability (and BuyBox) are back in line with pre-COVID-19 times, accelerate with your content implementation, especially on incremental listings.
- Confirm your star rating is performing well. If it is, secure a competitive number of reviews especially on your new product launches or listings.
- Search - if your fundamentals are healthy, it will recover on its own. However, if you are still returning low results, maybe it is worth investing in boosters before sales really suffer (talk to your CXO).
Catch up with the full recording here.
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