Why China’s retail won’t go back to the way things were

by Charged Retail

This article was originally published on Charged Retail.

 China has all but eliminated the coronavirus threat and day-to-day life in its metropolitan cities has more or less returned to its normal pace. But the coronavirus crisis may have irrevocably changed the retail industry and the way brands and retailers engage consumers. We take a look at what happened and what it means for global brands looking to make their mark in what may soon be the world’s largest retail market.

E-Commerce Reigns Supreme in China

E-commerce showed strong signs of growth throughout the coronavirus crisis, as consumers stayed at home and logistics companies introduced safety measures to keep their deliverymen out of harm’s way. Many apartment buildings also introduced no-touch drop zones for couriers to drop off packages without having to interact with their customers.

Data from retail consulting firm Kantar shows that FMCG e-commerce sales grew by a whopping 39.3% in the three months leading up to April 17th, while offline FMCG sales fell by 12.6% YoY. E-commerce consumption is likely to continue to grow, as customers realize that they don’t really need offline retail and as platforms continue to offer cheap, 1-2 day home delivery.

This realization has hit luxury brands, which had previously relied on offline retail in Beijing, Shanghai, Paris, and London to reach Chinese customers and tourists. Prada, Alexander Wang, and Cartier all launched Tmall stores over the past few months, signaling that the luxury industry cannot afford to ignore the shift towards e-commerce. Read More Charged Retail.