China’s fast-evolving retail landscape is ‘reinventing the future’, according to IGD’s programme director, Shirley Zhu.
The research organisation’s latest data shows a predicted growth of 10.4 per cent in China’s retail sector by the year 2022.
Online and offline integration has played a large role in this prediction, as well as China’s increasingly digital-savvy customer base.
“The future of grocery shopping is being reinvented in China, where the boundaries between ecommerce, supermarket and restaurants are blurring,” said Zhu.
“Facing rapid changes, the leading retailers are stepping up their efforts to build omnichannel capability, enhance in-store experiences and create differentiation.
“All these measures will help retailers understand and serve their shoppers better, gain a stronger foothold in the market and tap into a larger customer base in the future.”
Another significant factor is China’s foodservice industry, integrating options for grocery and dining in one place. According to IGD, foodservice options increase the number of customer touchpoints and engage return customers.
This doesn’t come at the expense of digitisation, which is still just as appealing to consumers and helps retailers collect useful data.
“Suppliers should think about investing in digital loyalty schemes to get the competitive edge. Design your portfolio for the smaller stores with less shelf space and adapt your offering to different retailers’ needs,” said Zhu.
These changes in digitisation and consumer interaction have made way for a new wave of store formats (like 7Fresh and a range of different un-manned outlets), which have popped up as Chinese retailers look to accommodate shoppers and maximise space.
In the fresh food sector, Zhu has one piece of advice for the future: rethink private label.
“Fresh food categories are a good starting point. Fruit and vegetables, fish and meat are typical categories that are led by retailers, rather than brands. They are now packaged nicely under the retailers’ own brands, ready to be picked for in-store purchase or online orders,” she said.
“Suppliers should focus on working alongside private label; look at this as a collaboration opportunity. Show how your brands can drive category growth and work harmoniously with private label brands to deliver a better experience.”
