KFC China fast food restaurants accepted Alipay mobile payments since July 2015. McDonald’s China also adapted Alipay in September 2015. Consumers now can use unique Alipay QR code in their smartphones to pay for the orders, which transactions will take only two seconds or less. It will be more convenient and efficient for both customers and cashiers. All KFC restaurants in the country only accepted cash payments in the past 27 years. Though Alipay simplifies the payment process, yet the benefit of creating consumer behavior database has been the main reason to accelerate the cooperation of these two industry giants.
For retailers in food and beverage or FMCG industry, knowing consumer behavior and target customer segments for different trade zones is as important as improving product and service quality. Classify customers into different groups in terms of different needs and characteristics to optimize its products and marketing mix for store performance improvement.
Usually, brand owners could pull out consumer behavior data from CRM database. Yet it’s hard to attract people to sign up for the membership program without big incentives such as discounts or exclusive deals. Now collecting consumer data through mobile payment makes it easier. Using big data technology to build customer profiles, to forecast the spending potential from purchase orders. Specify demographics like age, gender and behaviors like product-purchase interests in local areas. Identify high potential customers regarding different trade zones to enhance sales promotion and market strategy planning for better store performance. Different target segments in different trade zones could also be a good reference for the new store location selection, sales forecast and lease negotiations.
Mobile payment not only provides superior customer shopping experience, but supports the demands of O2O commerce. Retailers could also use big data analysis to find out who are the most desirable customers, and then create personalized offers which they are likely to buy.
Since Double Eleven Shopping Festival is coming, most retail brands are so prepared to join this year’s event. Brand owners not only offer discounts in ecommerce sites to attract consumers, but also set up experience areas in physical stores where people can feel the products in hands and purchase online/offline at special prices set for the event. It’s big sales holiday for most famous ecommerce platforms in China.
Below is the ranking of top 10 ecommerce sites in China in 2015 published by China e-Business Research Center.(中国电子商务研究中心) The new study indicates that Tmall was number one among all Chinese B2C retail websites for 2013. The site accounts for a 50.4% share of the B2C online retail market in China, followed by 20.7% of JD and 5.7% of Suning. Following No.4 to No.10 are Tencent (5.4%)、Vip(2.6%)、Amazon China(2.3%)、Dangdang (1.9%)、Gome(1.7%)、YHD(1.6%)、Vancl(0.8%).
For the local apparel brand owners, there are huge competition from international fast fashion brands, such as Zara, C&A, Uniqlo, H&M as well as the impact of economic slowdown regarding weaker purchasing power. They have optimized development strategy somehow in terms of business challenges. More and more continue to open new stores in tier2-3 cities. Outer growth of untapped area is one way to expand footprints and increase market share. Despite e-commerce booming, Chinese consumers are used buying clothes in physical stores. Store network planning will be a big concern for all market players in China.
Top Local Apparel Brands List
Belle is the top ladies’ shoes brand in China offering footwear products to the market. The target consumers are mainly the middle-class female which look for modern classic style.
Anta is a sportswear brand covering products like sports footwear, apparel and accessory. Up to 2014, Anta’s market value was summed up to USD 3.87billion, which became the 5th biggest sporting goods company (market value) in the world after Nike, Adidas, Puma and Asics.
Metersbonwe is leading casualwear retail brand in China. The company targets 18 to 25-year-old male and female consumers. The corporate slogan is “Be Different”.
Targeting city girls in 20-30s, Tata positon themselves a fashionable, trendy shoes brand which is young, stylish with attitude.
Youngor is primarily engaged in manufacture of apparels and textile products, selling gentleman clothing.
Semir was created in 1998 and has since become a leading brand for casual clothing in youth market. Now it has over 3,000 shop outlets across China.
Septwolves is one of the most famous men’s clothing makers in China. And it and children’s wear.
ForbesChina has announced a ranking of best cities for business in China. Business development has expanded to tier2, tier 3 cities in addition to Beijing, Shanghai, and Guangzhou. Below are the top 20 cities.
From the outward growth of business focus we can find that either local or foreign enterprises have altered their network planning. How brand owners to prioritize their city expansion strategy in terms of business requirements is crucial to the future success of the firms. Benchmark your brand to competitors and prioritize cities with most potential to help you develop best market plan.
China Resources Enterprise (CRE) has finalized acquisition with Tesco to create the largest food retailer in China by the end of May, 2014. The joint venture will combine Tesco’s 135 outlets in the country with CRE’s almost 1,000 stores, called Vanguard. Vanguard owns various business types such as hyper-marts, convenience stores, supermarkets and others. Among these outlets there are more than 250 hyper-marts. It is crucial for CRE to effectively carry out integration and store optimization plan after the acquisition.
To better execute store network optimization, brand owners need to fully understand market potential and penetration of targeted city. Reviewing performance of current stores and comparing actual performances against potential’s to get a clear picture.
Steps of SNO (Store Network Optimization)
Scorecard: to assess each branch and analyze competitor distribution
Channel optimization: overall planning of current stores (keep, improve, move or close)
Market expansion: site selection of new stores in terms of untapped high potential areas