The online-to-offline (O2O) business model is transforming the retail industry.īoth Alibaba and JD.com are focusing on the millions of other physical stores in Mainland China, as they believe a physical store is a place where consumers can be targeted to drive further penetration of payment platforms and e-commerce. For example, the largest e-commerce platform in China, Alibaba recently invested $2.9 billion in China’s biggest offline retail group, Sun Art. This concept involved the integration of online and offline retail elements, including physical stores, products, services, logistics, big data, marketing, management, and so on.Ĭurrently, in China, online players are taking the initiative to drive this integration. Since the term “ new retail” was used by Jack Ma in 2016, it has been an important topic for manufacturers and retailers alike. A new form of retail: online and offline integration Thanks to various online platforms, such as, Tmall Global, and JD Global, Chinese consumers now have broad access to products from overseas. For this reason, the number of Chinese online platforms and cross-border shopping sites where high-end and niche international brands are growing in popularity and are also driving the consumption updating movement. Middle- to upper-class consumers are now increasing their demand for goods that are not available domestically. The demand for fashion is growing much faster than other consumer demands. With the rise of disposable income, consumers are more confident in spending their money on a number of categories such as food, cosmetics, and clothing. Consumption upgrade in the Chinese E-commerce sector These shopping festivals are a perfect opportunity for new brands to enter the Chinese market. For example, over 79% of consumers said they participate in Double 11.ĭouble 11 and some other online shopping festivals are a key opportunity for local and international brands to leverage the enthusiasm for shopping among Chinese consumers.Ĭhinese consumers are looking to experience, try new things, and buy products that may be new to them.
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