China Bounces Back...and with its help, your retail brand can too

With COVID-19 posing an unprecedented threat to businesses up and down the UK, it’s a good time to look to China, where life is beginning to return to (a new) normal; both as a vision of the future and as a way to ease the pressures on retail here at home.

This week, the number of new cases identified in mainland China has fallen to around 20 per day. Restaurants, shops and tourist sites are reopening, and consumers are more hopeful, heading outdoors to catch up with friends and moving out of the panic mindset that had limited shopping only to essentials.

China’s economy will bounce back first and fastest, so businesses connected to China should remain optimistic. There has been a clear uptick in sales during March as Chinese shoppers act on their growing willingness to spend on leisure. E-commerce is booming once again, and beauty and luxury are performing strongly. Read on for more detailed insights into these areas, and for our advice on how your business can make the most of this unprecedented situation.

Credit: WalktheChat

As the coronavirus comes under control, e-commerce sales in China are bouncing back with a vengeance. Many brands are now recording stronger e-commerce performance than the same period last year. Retail is switching from offline to online, as brands adapt to the current situation and offer entire VR solutions to consumers.

Live-streaming is being optimised by brands hoping to engage increasingly spend-happy consumers - it’s risen by +60% since the outbreak began. Over 1,000 brands have hosted live-streaming events on WeChat Mini Programs, and sports giant Anta has moved its entire retail team online.

WeChat Mini Program social commerce traffic has increased by 83%, impressive but unsurprising as daily time spent by users on social platforms has gone up dramatically: WeChat, QQ, Weibo, Little Red Book and Douyin have all seen significant increases.

KOLs have been experimenting with new channels, such as Taobao, to increase their reach. The coronavirus outbreak is already having a huge impact on the global economy, but Chinese e-commerce is one sector that is booming. 

Credit: WalktheChat

Beauty has remained extremely strong in Chinese e-commerce. Consumers have been killing time by testing out innovative makeup looks and sharing them with friends online. Many are taking advantage of extra time at home and investing in high-quality skincare. More traditional brands, such as Lanc?me and Estée Lauder are booming online, with over 100% YOY growth as offline sales shift to Tmall. Smaller brands such as Forest Cabin, One Leaf and Perfect Diary are scaling up by developing their social commerce infrastructure, developing live-streaming and Mini Program capabilities to engage socially with consumers.

The luxury market is rebounding in China as consumers ‘revenge spend’ after weeks of being stuck in panic mode. Cities are showing cautious optimism, and shops are beginning to reopen their doors. Hermes has reopened all but two of its mainland China stores, and malls and boutiques are welcoming shoppers - albeit with health checks on the doors. Despite a slow return to offline shopping, e-commerce remains vital for luxury to recover from a challenging first quarter. Flight restrictions have made it harder for Chinese tourists to travel abroad, suggesting a shift to buying domestically.

To be clear, with business under threat here in the UK and across Europe and the US, Chinese demand offers a unique and clear opportunity to drive sales.

This is a hugely challenging time for brands, but in one way Coronavirus is offering an opportunity for brands to make their mark on the Chinese e-commerce landscape. As Chinese consumers continue to move towards online shopping, this is a great time to harness one of the few sectors that's booming globally. If you’re a brand with little to no presence in China, now is the time to craft excellent stories about your brand and engage Chinese consumers - who are shopping predominantly online and spending more time on their phones than ever. 

Here’s our advice for your brand to make the most of this strange period in time:

• Think big picture: yes times are getting tougher here, but China is likely to be the sole driver of retail spend globally over the coming months. Do not sacrifice what momentum you have already built up in the market
• Double down on what you know works in China; invest in your brand story and USPs
• Look beyond the usual platforms (Weibo and WeChat) for more innovative (and cost effective) ways of reaching new audiences
• Explore KOL live-streaming to engage with your consumers
• Think about lean, efficient ways of getting your product to market such as a social commerce presence on WeChat or RED
• Invest in a targeted way, with a focus not only on the big shopping festivals such as Singles Day, but other more niche events (Tmall saw a dramatic spike in sales on International Women’s Day)
• Craft a strong content strategy that focuses on conversion and quick wins

We're assisting dozens of brands through these difficult times. If you'd like to have a chat with us about your existing strategy, please reach out.

And finally, from all of us at TONG: stay safe!