Ethan Li

Project Manager

December 26, 2014

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Power of spending in Asia

How spending patterns have changed the business landscape

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According to the latest financial study, the high-growth market in Asia will lead global trade in the next decade, and its proportion of consumption in the whole world will raise from less than 14% in 2010 to 25% in 2020. Asia has gradually transformed its role from the world factory to the consumer market with high potential. Most international brands have already set foot in Asia markets by partnering with local distributors, holding exhibition events periodically, expanding their store network or show rooms to promote their brands.

Additionally, the M-type society trend in Asia also creates a segment of affluent consumers with enormous purchase power far greater than the others. “Who are these people? And how is their consuming pattern?” These are the million-dollar questions every business want to know.

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Another fact is that the age of target customers is elder than before. In East Asia, the average life length has increased from less than 45 years in 1950 to 72 years (China: over 71; India: 64) recently. Moreover, the population aging and retirement extension happening in most Asian countries also greatly impact the whole society, and indirectly change the business landscape in the market.

Traditionally, the stereotype of the elder life in Asian countries is that women stay at home taking care of grandchildren for younger generations, and men leisurely play chess and drink tea with friends in the same age. There is no way they are the active consumer segment in business market before. However, it turns out that the trend rolls to the opposite direction: these growing elder customers in Asia, especially the baby boom generation, would raise and become an important driver in the market. They have not only more financial freedom in terms of the retirement compensation, investments, savings etc, but also more free time to enjoy life by luxury spending than the younger generation with the burden to put food on the table now. Some still maintain the passion to willingly explore new experiences in new products and technology, and also live longer due to the good healthy system support nowadays, even active and valuable in job market.

Therefore, it is crucial that enterprises spend time studying more about where they are and their shopping behaviors, to innovate the business model, products, and services to go with the inevitable flow in Asia market right now.

Kenny Lee

VP, PMDO

November 17, 2014

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Future of brick-and-mortar stores

Retailers need to be focusing on optimizing store portfolios, while simultaneously improving their online presence.

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Will online shopping squeezes brick-and-mortar stores?

Traditional retailers need to select the best sites for stores, determine the optimal number of locations for each market, keep up with consumer expectations of what the in-store experience should be. However, consumer aren’t coming to stores for the prices or the selection as they can usually find better alternatives to both online.

China’s online retail market, which has surpassed that of US as the world’s biggest, and will continue to grow rapidly  to a level threatening brick-and-mortar stores in next few years. According to the official government data, Chines consumer spent US$300 billion last year, 13% per cent more than the US. This figure makes China the biggest market for online retail in the world.

Based on getchee market research, online sales now accounts for approx. 10 per cent of total retail sales but anticipates it will grow 30-40 per cent a year in China market. However, that means that 90 per cent of retail sales are still happening where sales have taken place for hundreds of years: Physical stores, retailers have physical presence to engage with consumers.

Why personalized retails is the future of brick-and-mortar stores?

Consumers prefer to shop in physical stores as it allows them to have a sensory experience – they can touch and feel product, immerse brand experience, and interact with sales associate. Many retailers are taking a page from their traditional compositors by offering an in-person shopping experience that can’t be mimicked on a tablet or smartphone. This heightened focus on in-store experience could be a sign that the retail industry definition of successful store is changing.

Key benefits for retailers and customers

1. Discover customer preference to offer the right product mix, reduce inventory distortion and raise brand awareness.

2. Draw attention to products using catalysts, like mobile payment, phone apps, or special promotion program; increase retention of existing customer and get customers to try new products.

3. Give customer a reason to shop in-store by surpassing the online experience with more relevant product information, interactive self-service stations, and expert insights from sales staff – delivering an immersive brand experience.

4. Allow customer to shop the way they want, using a combined channels (in-store, online, mobile and self-serivce) accommodating their busy lifestyle.

5. Making personal connection by sending an email or SMS wishing them a happy birthday, congratulation on an anniversary, or gifting a beverage 0 making them feel special.

 

The future of retail stores

So instead of concentrating solely on one channel, retailers need to be focusing on optimizing store portfolios, while simultaneously improving their online presence.

Retailers also need to adjust the way they view the value of their physical stores. When online shopping exploded, retailers determined the impact to performance of a store based on its sales numbers. Brick-and-Mortar stores need to be viewed and help consumers discover new products and test ones they have seen online – regardless of where the actual transaction takes place.

Brick-and-Mortar stores capture sales, but they also create value by driving online sales. This means the value of a store for both consumers and retailers is greater then the sales captured within them.

 

 

Jason Lee

Market Researcher

September 18, 2014

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4 Athletic Apparel Trends In China Retail Now

Current apparel trends that retailers need to address now.

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Increasing purchasing power and rapid lifestyle changes provided a big opportunity to major athletic apparel companies to expand in the market over the past few years. The 2008 Beijing Olympics gave international and domestic companies more reasons to be optimistic about the industry segment. Read the rest of this entry »

April Wu

China Market Strategy

July 16, 2014

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Top 10 Fashion Brands Expanding In China 2014

A guide including infographics, on the top fashion retail expanders in China for the first half of 2014.

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The e-commerce boom is changing how retailers develop their global expansion plans. According to a brand research report from Linkshop.com.cn(联商网), we see the fastest growing international fast-fashion companies in China first half of 2014. Their networks have been gradually moving to 3-4 tier cities, such as Foshan(佛山), Xiangyang(襄阳), Wenling(温岭), Wuxi(无锡), Linyi(临沂), Weifang City(潍坊). It’s a big challenge for local brand owners to keep up with these aggressive competitors.

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James Grigsby

SVP, Delivery Office

May 8, 2014

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E-commerce Continues To Rock The Retail Boat In China

Why brand owners that properly manage omnichannel presence will rapidly pull ahead of those that don't.

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We keep a close eye on e-commerce trends here at getchee. Our specialty is providing location intelligence for physical channel retailing, but as more and more consumption goes online, e-commerce can’t be ignored. For us, and many of our clients, e-commerce presents a combination of perplexing challenges and enormous opportunities.

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