14
Nov
2013

Is e-showrooming the future for Chinese consumers?

The recent record breaking ‘singles day’ online sales in China, and the huge growth in mobile technology adoption and usage has set my mind racing on the subject of the future of traditional retailing in the country. Over the past 12 months, retailers have struggled to attract buyers into their stores to spend money and are also having to change the way they interact with the consumer; and for some it’s a real struggle.

The tradition of showrooming in China is long, and its not uncommon to see individuals or groups go into a store, check out the products and as they leave to get onto their phones or ipads to find the same product elsewhere as cheaply as possible. So is the function of the traditional store moving more to a place simply to display your product so that they can be directed to your own or some other e-commerce site from which they can place an order?

To me, this is the case much of the time in China, so it does beg a question as to whether a physical store is of any value at all these days. Luxury brands would argue that the physical store is a representation of the brand values and brand DNA, and can tell the buyer a great deal about what sits behind their planned purchase. I cannot disagree, but we must also accept that the Chinese consumer likes to browse, it’s a cultural obsession along with eating. To take away the option to browse may change the perception of the brand, so why not deliver it another way.

So given the availability of technology these days, will we soon see virtual malls, that are almost as realistic as being in the real thing, where we can enter a store, examine the product, and even see it on a model of exactly our size? I certainly think so, particularly for many Chinese outside the Tier 1 and 2 cities, for whom this will be their future. They will sit in front of their TV, computer or tablet with their friends and take a trip to the mall, see brands they know, and some they do not, walk around a store and try things on. Having chosen a product, they place and order and within 24 hours it is delivered to their doorstep.

No long journeys into town, bad traffic, crowded trains or subway commutes, and they can do it day or night. For those in the tier 1 and 2 cities, perhaps the lure of the bright lights and physical engagement with others will still win over a virtual trip, but we can be sure that in a country of this size, the only way most brands can reach into the lives and homes of a large percentage of the population is over the internet. So why not create a local store online, stock it with products that suit the local consumer, and still build an affinity that in the past has been considered only possible through the touch and feel of a physical retail environment?

Ken Grant
Ken is the publisher of Luxury Insights China, he is regularly asked for his comments and opinions of the luxury sector in China by the media, and speaks at conferences on the subject. His international marketing experience covers 25 years, and most territories of the world.

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