It is vital to MVRO to keep abreast of developments in the retail sector. A research trip to China was therefore on the cards. The aim of this trip was to experience what retail in China actually entails, and how much the country has progressed in terms of (the integration of) technology.
We are all familiar with China’s image as a colossal country with a vast population. We also know it for the widespread practice of copying other people’s products. The thing that most people don’t realise about China, is the highly considerable progress it has made in the field of data.
Gaining access to China is no simple matter, however. The very first obstacle is the visa procedure. It is both pretty complex and detailed. Having surmounted it and survived an 11-hour flight, however, one immediately becomes aware of the vast number of cameras recording everything and everyone at the airport. Once your fingerprints have been scanned, you enter a country where simply maintaining the status quo is very much viewed as decline. You realise that they have basically done away with privacy, too, when you discover that – similarly to every single Chinese citizen – you need to use the all-in-one app WeChat to send email, make telephone calls, chat, navigate and make payments. WeChat is used for literally everything, and the Chinese government has possession of all data involved. This is a prime example of China’s development into a country where digital innovations follow one another in rapid succession and are seamlessly integrated in everyday life. The reason why it is so fast is obvious; a single party holds all the data. When combined with the highly driven nature of China as a nation, this yields a proven success formula.
Adeptly led by Alibaba and its closest rival JD.com, China tirelessly built upon the modest 0.4% share of the global e-commerce market it held in 2005 to become the country with the largest market share (over 40%) within the space of a decade. However, e-commerce and traditional retail have begun to merge into a remarkable new initiative that Alibaba calls New Retail. In short, China has completely outstripped us in terms of online shopping, mobile apps, social media and internet technology. We had a lot to learn in this regard, and would actually witness at first hand how online and traditional retail are merging into New Retail in the bustling, booming and fascinating – yet entirely different – cities of Shanghai and Hangzhou.
Day 1: First of all, we visited the city of Shanghai. With a population of 24 million, Shanghai is China’s largest city, which is bisected by the Huangpu River and covers no less than 6400km² of the Earth’s surface. We strolled around Xintiandi, where you can shop on foot to your heart’s desire, as it has long been designated a pedestrian area. Xintiandi nowadays comprises a considerably large area that is entirely car-free, and another smaller portion that is not. It is generally considered one of China’s first lifestyle centres. It is also the most expensive place to live in China, boasting apartments that are even more expensive than Tokyo, New York and London. It is home to the Chinese elite and prominent executive expatriates. Furthermore, Shanghai itself is the most expensive city in China (except for Hong Kong) in terms of property prices.
Day 2: After breakfast the next day, we departed by bus for Hongqiao Station, which is new, impressive, quite grand and extremely busy. It is actually worth a visit in itself. There, we boarded a (very comfortable) high speed train, capable of speeds up to 300 km/h, bound for Hangzhou, where we later had lunch in the Hema (pronounced Khooma) Supermarket, with a view to checking out its new Fresh Food concept. We discovered that it has live fish and shellfish that you can catch yourself, and may even opt to have prepared straight away for consumption in the cafe. Hema also receives countless online orders, which are picked by runners in the shop, for delivery by scooter to the customer’s home (provided it is within a radius of several kilometres) in under 60 minutes. I have to admit that the integration of online shopping largely appears to mesh seamlessly with the physical store, which nevertheless remains highly popular.
Shortly afterwards, we visited Alibaba Shopping Mall. This sleek looking complex offers both all major brand products and the option of paying with Alipay. Very much in keeping with the latest trend, there was also a striking abundance of food & beverages, a segment which can simply no longer be ignored.
Day 3: Our day began with the return journey by bus to Shanghai. On arrival, we embarked on the retail shopping tour of East Nanjing Road, which featured several prominent brands: Nike House of Innovation, the LEGO flagship store and Auchan Minute, whose concept can be set up basically anywhere, as Auchan utilises 18m² containers, offering some 500 products. Its mini-supermarkets are open 24 hours a day, seven days a week.
Nike House of Innovation
A four-storey building located in the world-famous Nanjing East Road shopping district. Its stunning exterior features curved glass, which is designed to mirror the movement of athletes. The interior is equally innovative and inspired by the fluidity of sport. One of the highlights is the exclusive local products that are only available there. The store’s exclusivity is also reflected in the fact that NikePlus members have access to exclusive personalized products and private styling sessions on the top floor. NikePlus members also have the opportunity to design their own next level personalized shoe in a one-on-one session with a designer. There is a basketball court with all kinds of technological gadgets in the basement.
An equally impressive shop is that of the world’s largest toy maker, LEGO Group. The interactive section of this second of the country’s flagship stores (the first one was opened in Shanghai Disney Resort in 2016), offers you the chance to design your own creation based on an urban theme, such as energy or cultural heritage. The ‘mosaic maker’ service is also available in this store, where you can have a mosaic portrait made of Lego for around $145. It is impressive to witness both the power of this brand and the fact that its stores are buildings with the most amazing Lego creations.
Moving on to the HKRI Taikoo Hui Shopping Mall, we had lunch at Zwilling Restaurant and looked around NIO, and Starbucks Reserve Roastery, which is the world’s largest Starbucks, offering almost 3000 square metres of floor space spread over two floors and a true coffee experience! It’s always crowded there and there’s sometimes even a queue to get in. The store sells coffee, merchandise and tea, which is an integral part of Chinese culture. What an experience! The store also freshly roasts and packages coffee for sale. Click here to view this impressive store, which is also known as a ‘coffee amusement park’.
Our next stop was Nio (which means new day), whose logo consists of the sun on the horizon above a road. At its core, Nio House is a relaxed place to escape the hustle and bustle of the city. However, it is accessible exclusively to Nio drivers. The Chinese electric car start-up Nio, touted as the ‘Chinese Tesla’, was recently launched in the US. Nio’s major investors include Tencent and JD.com. Nio’s efforts to persuade customers include benefits such as exclusive access to clubhouses known as Nio Houses, which are a cross between a coworking space, a café, a day-care centre and an events venue.
Nio has thirty such houses throughout China, including three in Shanghai. While the drive-in entrance is on the first floor, the top floor offers a range of facilities, including: a bar where baristas serve coffee, various rooms where people can work in a tranquil environment, but also rooms where you can hold a presentation and even a small library with seating. NIO members can even celebrate their birthday there. The company views the upper floor as a blend of a club and a coworking space. It is aimed at busy and wealthy Chinese, who may need a meeting room to present their start-up pitch to investors.
Check out this video, which is highly impressive, while the complement of the company’s board of directors also vouches for its success.
Day 4: Today, we went on a retail tour on Huaihai Road, Shanghai’s second major shopping district. We also visited the Gentle Monster Flagship Store, and IAPM Shopping Mall.
The Gentle Monster Flagship Store immediately catches your eye, due to numerous large-scale installations, which lend it the appearance of an art gallery rather than a shop interior. Both in terms of its flagship stores in various countries and special projects, the brand continues to surprise its customers with ingenious experiences that transcend the boundaries of conventional retail design. A highly instagrammable store.
MUJI Shanghai; the largest flagship store in the world opened in 2015. MUJI is Japanese for ‘no brand, quality goods’. The company has over 700 stores worldwide and a simple no-nonsense philosophy. MUJI is Japanese for ‘no brand, quality goods’. Its four-storey premises offer everything from bicycles to books and products that you can customize yourself. It is a must-see for anyone visiting Shanghai, and the concept might well prove a huge success in the Netherlands.
Next, we were off to IAPM Shopping Mall, a luxury mall comprising major boutiques on the first two floors, including Prada, Gucci, Miu Miu and Dolce & Gabbana, Stella McCartney, Alexander McQueen, Alexander Wang, Chloé, Maje, Balmain and Michael Kors.
Newer brands such as Zadig & Voltaire, Marimekko, Fedon and Muji occupy the third floor, while the fourth floor is devoted to sports brands such as Nike, Aigle and Onitsuka Tiger. The mall also offers a complete range of amenities, including restaurants, cafes and cinemas. It is a very high end location, where a remarkable amount of spending is still going on.
And that was where the research trip came to an end. It proved a truly great experience. China offers boundless opportunities for new concepts, which continue to enter the market at blistering pace. We gained a great deal of inspiration in terms of new store concepts and business models. Our task for the time being is to impart all this new information and inspiration to our clients! After all, that is what our business is about. Zài jiàn! That’s Chinese for ‘see you again!’