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China Innovative Retailing Market Report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Innovative Retailing market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Key points included

  • Pop-up stores are in
  • Unmanned stores are not a ‘pull’ product
  • Vending machines are good for diversified submarkets

Covered in this report

This report focuses on New Retail formats and experiences in physical stores. The retail formats include new store formats and concepts, including pop-up stores, unmanned stores, mini karaoke, and micro gyms etc. Retail experience refers to new services/features in certain stores such as self-checkouts, selfordering, and smart mirrors that can diagnose skin etc.

Expert analysis from a specialist in the field

Written by Roger Shi, a leading analyst in the Retail sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The application of technology in retail can only prosper when consumers’ needs are kept in mind. Consumers crave entertaining and exciting experiences and want to make their purchasing decisions as convenient as possible. Pop-up stores are an effective tool to strengthen companies’ sales and marketing capabilities. Mini karaoke booths, vending machines, mystery boxes and micro workout pods can become effective retail formats if they can identify the appropriate consumer segments, such as those who are married with kids and consumers who reside in tier two and tier three cities. Roger Shi
Retail Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
        • Excluded
        • Executive Summary

            • Market overview
              • Who’s innovating
                • The consumer
                  • Most surveyed consumers have not tried New Retail formats but show intense interest
                    • Figure 1: Interest and trial of New Retail formats
                  • Unmanned stores show strong promise in lower tier cities
                    • Figure 2: Interest in unmanned stores, by city tier
                  • Overtime meal occasions are best fit for self-heating vending machines
                    • Figure 3: interest and trial of meal vending machines, by employment
                  • Married consumers with kids are loyal customers of mini karaoke booths
                    • Figure 4: Interest and trial of mini karaoke visits, by family structure
                  • Convenience in beauty is growing
                    • Figure 5: Interest and trial of self-service makeup room, by gender and age
                  • Mini workout pods are about excising in your own time
                    • Figure 6: Interest and trial of micro workout pod, by city tier
                  • Innovative retailing is an extension of experiential retail
                    • Figure 7: Triggers to shop at New Retail channels
                  • Understanding what consumers want is key for New Retail formats
                    • Figure 8: Barriers to New Retail channels
                  • Self-checkouts and self-ordering are new norms
                    • Figure 9: Interest and trial of New Retail services
                  • New experiences grab consumer eyeballs
                    • Figure 10: Reasons to visit pop-ups
                  • Product recommendation by smart device is gaining popularity
                    • Figure 11: Attitude towards product recommendation, by generation
                  • Familiarity is not that meaningful for young consumers
                    • Figure 12: Attitude towards familiarity
                  • What we think
                  • Issues and Insights

                    • Unmanned stores are not a ‘pull’ product
                      • The facts
                        • The implications
                          • Pop-up stores are in
                            • The facts
                              • Figure 13: YSL Beauty Club on The Bund
                            • The implications
                                • Figure 14: TISSOT bus for 5.20
                              • Vending machines are good for diversified submarkets
                                • The facts
                                  • The implications
                                    • Figure 15: Farmers Fridge in downtown Chicago
                                • The Market – What You Need to Know

                                  • Market overview
                                    • Market drivers and challenges
                                      • Who’s innovating
                                      • Market Overview

                                        • Unmanned stores – Need to better understand consumer behaviour and needs
                                          • Community-based unmanned stores
                                            • Full-service unmanned stores
                                              • Fresh food and drink unmanned stores
                                                • Vending machines – Great potential for cost-effective solution to reach customers
                                                  • Mini karaoke booths – Popular new entertainment
                                                    • Self-service makeup rooms – Sanitation is a key concern
                                                      • Figure 16: Interior of seventeen beauties
                                                    • Micro gyms – A community-oriented social space
                                                      • Figure 17: Pure Run mini workout pod
                                                      • Figure 18: Park Box in a high-end residential community
                                                      • Figure 19: Supermonkey warehouse gym
                                                    • Mystery boxes – Driven by curiosity
                                                      • Figure 20: Mr. Wish mystery box vending machine
                                                    • Pop-up stores are powerful sales and marketing tools
                                                      • Figure 21: Mojosh’s pop-up event at Jiuguang department store
                                                      • Figure 22: Nutella’s pop-up event in Hong Kong
                                                      • Figure 23: Prada’s exclusive bar
                                                      • Figure 24: CoCo game center
                                                  • Market Drivers

                                                    • IoT ecosystem in China is pushing for retail revolution
                                                      • AI and consumer data are shaking up retail
                                                        • Real estate industry is looking for next growth opportunity
                                                          • Figure 25: Self service area at metro station
                                                        • Government support for New Retail formats
                                                        • Challenges

                                                          • Consumer-centric experience is king
                                                            • Barrier to entry is on the higher end
                                                            • Who’s Innovating?

                                                              • Just temporarily exclusives
                                                                • Figure 26: Burberry tram cruising the streets of Hong Kong
                                                                • Figure 27: Weddings day for singles
                                                              • Mixing & matching is an interactive advertising tool to drive traffic
                                                                • Figure 28: Pop Mart vending machine at a shopping mall
                                                                • Figure 29: Pop Mart’s physical store near a public university in Shanghai
                                                                • Figure 30: Vita water station in Hong Kong
                                                            • The Consumer – What You Need to Know

                                                              • Unmanned stores are still very new to customers
                                                                • Management and self-employed are active users of meal vending machines with heating systems
                                                                  • Mystery boxes are kids’ favourite
                                                                    • Married with kids are loyal customers of mini karaoke booths
                                                                      • Convenience in beauty is growing
                                                                        • Micro workout pods are about excising in your own time
                                                                        • Innovative Formats

                                                                          • Unmanned stores
                                                                            • Most surveyed consumers have not tried New Retail formats but show huge interest
                                                                              • Figure 31: Interest and trial of New Retail formats
                                                                            • Unmanned stores show strong promise in lower tier cities
                                                                              • Figure 32: Interest in unmanned stores, by city tier
                                                                            • Unmanned stores can be futuristic and retro at the same time
                                                                              • Figure 33: Interest and trial of unmanned stores, by generation
                                                                              • Figure 34: Interest and trial of unmanned stores in tier one cities, by generation
                                                                            • Kids can be a deciding factor
                                                                              • Figure 35: Interest and trial of unmanned stores, by children in household
                                                                            • Meal vending machines with heating systems
                                                                              • Overtime work meals are best fit for self-heating vending machines
                                                                                  • Figure 36: Interest and trial of meal vending machines, by employment
                                                                                • Mystery/lucky box vending machines
                                                                                  • Mystery boxes are designed for curiosity seekers
                                                                                    • Figure 37: Interest and trial of mystery/lucky box vending machine, by family structure
                                                                                  • Mini karaoke pods
                                                                                    • Married consumers with kids are loyal customers of mini karaoke booths
                                                                                      • Figure 38: Interest and trial of mini karaoke visits, by family structure
                                                                                    • Self-service makeup touch-up vending machines
                                                                                      • Convenience in beauty is growing
                                                                                        • Figure 39: Marie Dalgar’s collaboration with Tmall
                                                                                        • Figure 40: Interest and trial of self-service makeup room, by gender and age
                                                                                      • Micro workout pods
                                                                                        • Micro gyms are about excising in your own time
                                                                                          • Figure 41: Interest and trial of workout pod, by household income
                                                                                        • Lower tier city residents are fond of community
                                                                                          • Figure 42: Interest and trial of micro workout pod, by city tier
                                                                                          • Figure 43: Interest and trial of mini workout pod, by children in the household
                                                                                      • Consumer Motivations

                                                                                        • Innovative retailing is an extension of experiential retail
                                                                                            • Figure 44: Triggers to shop at New Retail channels
                                                                                          • Entertainment and trendiness are two game changers in lower tier cities
                                                                                              • Figure 45: Reasons to shop at New Retail channels
                                                                                            • Understanding what consumers want is the key for New Retail formats
                                                                                                • Figure 46: Barriers to New Retail channels
                                                                                              • Lower tier city citizens are more practical
                                                                                                  • Figure 47: Barriers to New Retail channels, by city tier
                                                                                              • New Retail Services

                                                                                                • Self-checkouts and self-ordering are new norms
                                                                                                  • Figure 48: Interest and trial of New Retail services
                                                                                                • Lower tier cities are more open to self-checkouts and self-ordering
                                                                                                    • Figure 49: Interest and trial of self-checkout, by city tier
                                                                                                  • Families with children open to self-ordering
                                                                                                    • Figure 50: Interest and trial of self-order, by family structure
                                                                                                  • Virtual product trials a trend in the making
                                                                                                    • Figure 51: Interest and trial of virtual trial of products, by gender and age
                                                                                                  • Gender plays an important role when it comes to product recommendation
                                                                                                    • Figure 52: Interest and trial of product recommendations by smart devices, gender and age
                                                                                                • Pop-up Stores

                                                                                                  • New experiences grab consumer eyeballs
                                                                                                    • Figure 53: LV pop-up
                                                                                                  • Exclusivity, familiar brand and attractiveness are three pillars
                                                                                                    • Figure 54: Zhihu pop-up
                                                                                                    • Figure 55: Reasons to visit pop-ups
                                                                                                  • Social media is the information channel
                                                                                                    • Figure 56: Silk Mix Beijing Stage
                                                                                                    • Figure 57: Silk Mix Online Program
                                                                                                    • Figure 58: Silk Mix pop-up event
                                                                                                  • City tier plays a role in pop-up formats
                                                                                                    • Figure 59: Reasons to visit pop-up stores, by city tier
                                                                                                • Consumer Attitudes

                                                                                                  • Self-service represent efficiency and convenience
                                                                                                      • Figure 60: Attitude towards self-service
                                                                                                    • Product recommendations by smart devices gaining popularity
                                                                                                        • Figure 61: Attitude towards product recommendation
                                                                                                        • Figure 62: Attitude towards product recommendation, by generation
                                                                                                      • Familiarity is not that meaningful for young consumers
                                                                                                          • Figure 63: Attitude towards familiarity
                                                                                                          • Figure 64: Attitude towards privacy, by age
                                                                                                        • Singletons and couples seek new experiences while families look for the safe option
                                                                                                            • Figure 65: Attitude towards peer review
                                                                                                            • Figure 66: attitude towards peer review, by family structure
                                                                                                        • Meet the Mintropolitans

                                                                                                          • Shopping futurists
                                                                                                            • Figure 67: Attitude towards product recommendation, by consumer classification
                                                                                                            • Figure 68: Attitude towards self-service, by consumer classification
                                                                                                            • Figure 69: Attitude towards peer review, by consumer classification
                                                                                                          • They are an open minded bunch
                                                                                                            • Figure 70: Attitude towards price, by consumer classification
                                                                                                            • Figure 71: Pop-up stores participation, by consumer classification
                                                                                                        • Appendix – Methodology and Abbreviations

                                                                                                          • Methodology
                                                                                                            • Fan chart forecast
                                                                                                              • Abbreviations