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Retail expert David Roth joined Alicast to discuss about the latest e-commerce trends in China, the world’s second-largest e-commerce market.
Roth, CEO of retail practice The Store-WPP and Chairman of consultancy WPP BAV, spoke about the evolution of the retail industry in China. London-headquartered communications group, WPP, is at the forefront of advising global brands on navigating markets and absorbing cutting-edge technology.
“If you really want to see the future of technology, of retail, of the combination between on-and-offline, then China is the place to have a look,” said Roth.
Alicast spoke to Roth on the eve of the 11.11 Global Shopping Festival, the world’s largest retail event.
Brands are changing their tactics during promotions in China. Instead of simply seeking to generate sales through vanilla discounting, they are cultivating consumers with membership programs.
“We’re seeing how 11.11 is now being used as a way of rewarding customer loyalty and creating customer loyalty,” said Roth.
Roth’s words echo recent reports by consultants, such as Bain & Co, that say customer loyalty programs are optimal to generate long-term profitability over a one-off discounting sugar rush during a shopping festival.
An inveterate China watcher, Roth has lived in Shanghai and worked with many Chinese brands over the years.
He noted that there are three key drivers of retail innovation in China, firstly the awareness that online and offline should be integrated and secondly, Chinese consumers are among the most connected in the world. The third factor at work is the push by Alibaba Group and others to digitize and tighten the entire supply chain.
We’re seeing how 11.11 is now being used as a way of rewarding customer loyalty and creating customer loyalty
Roth also shared insights from WPP BAV’s latest ‘Best Countries Report’ that measures global perceptions of countries – impressions that have the potential to drive trade, travel and investment, and directly affect brands.
Together with the U.S. News & World Report and the Wharton School of the University of Pennsylvania, WPP’s BAV polled close to 18,000 individuals in 85 countries to compile the rankings in which China ranked high for innovation and entrepreneurialism.
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David Roth, The Store-WPP CEO and WPP BAV Chairman
“If you really want to see the future of technology, of retail, of the combination between on-and-offline is, then China is the place to have a look.”
“We’re seeing how 11.11 is now being used as a way of rewarding customer loyalty and creating customer loyalty.”
“Black Friday…hasn’t changed since God was a boy. Many companies view Black Friday as a way of discounting heavily and getting shot of products they might have had in their stock rooms.”
“11.11 has an amazing energy to it and an excitement.”
“Shopping sales around the world have never managed to create, maintain, and drive the level of excitement and interest that Alibaba’s managed to do with 11.11 in China.”
“It’s the start of the process as opposed to the end of the process. If you view it in those terms, it gives you a much better strategic outlook as to how 11.11 contributes to growing your brand, clearly generating sales at a very important time, but also creating a springboard for the brand strategic and tactical activity right across the year.”
“We’ve seen China go from, I suppose, being seen as a manufacturing country, in a very quick and fast way to being seen also as a country that innovates, that has good engineering skills, good design skills.”
“Consumers are thirsty for knowledge about brands, not just the fact that they are available.
“One of the things that platforms are voracious at is the use of content and the importance of refreshing that content as frequently as possible.”
“It’s one thing to be in China; it’s another thing to be known in China. You need a differentiated position so that Chinese consumers can understand what is different about you. It might be your environmental credentials, it could be the efficacy of the product, it could be who uses that product. But it’s really, really important to make sure that that differentiation is relevant and that differentiation is continuously communicated.”
“Alicast” is a production of Alizila, the corporate newsroom of Alibaba. It’s produced by Yashan Zhao and hosted by Alison Tudor-Ackroyd. If you’re in a podcast app already, please follow “Alicast”. If you’re listening on Alizila’s website and want each new episode of “Alicast” delivered to you as they’re published, download any podcast app, then search for “Alicast” to follow the show. Thank you for listening.