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Description

Description

“Today’s Chinese consumers are used to shopping online for most consumer goods, yet physical venues remain vital for categories where consumers don’t have much knowledge and need guidance. China is on the cutting edge of developing new technologies and innovative retailing features, and the online channel will continue to become increasingly important not only in product distribution but also product discovery and developing consumer loyalty. What’s more, Chinese consumers are particularly responsive to and quick to develop new usage habits for these new omnichannel innovations. Meanwhile, Chinese urbanities are asking for more from brands and retailers. Whereas consumers in lower tier cities are in need of branded products and fast delivery, those in tier one cities are looking for seamless experience and global brands.”

- Summer Xia, Research Analyst

This report will look at the following areas:

  • Efficient delivery networks drive both sales and profits
  • From social e-commerce to social retail in physical spaces
  • The rise of cross-border e-commerce

What's included

What's included

Table of contents

Table of contents

  1. Overview

    • What you need to know
      • Covered in this report
      • Executive Summary

          • The market
            • Companies and brands
              • Tech giants dominate the market
                • Innovative online experience
                  • Instant response to consumer feedback
                    • The consumer
                      • Online channel is part of daily life
                        • Figure 1: Purchase channel, September 2019
                      • Online shopping is dominant but physical stores remain popular in drinks, home appliances and medicine
                        • Figure 2: Channel preference, rank by the gap between online and offline, September 2019
                      • Super-fast delivery for fresh produce and restaurant food is most common
                        • Figure 3: Instant delivered products bought, September 2019
                      • Satisfying immediate needs
                        • Figure 4: In-store shopping triggers, September 2019
                      • Omnichannel experience sees early success
                        • Figure 5: New retail experience, online and offline retail, September 2019
                      • Open-minded about sharing personal data
                        • Figure 6: Attitudes towards personal data usage in new retail, September 2019
                      • What we think
                      • Issues and Insights

                        • Efficient delivery networks drive both sales and profits
                          • The facts
                            • The implications
                              • From social e-commerce to social retail in physical spaces
                                • The facts
                                  • The implications
                                    • Figure 7: LEGO’s virtual pop-up in London, February 2019
                                  • The rise of cross-border e-commerce
                                    • The facts
                                      • The implications
                                      • The Market – What You Need to Know

                                        • A positive outlook on New Retail
                                          • Residence in lower tier cities will drive growth
                                            • B2C dominates the online market place
                                            • Market Size and Forecast

                                              • Introduction
                                                • Figure 8: China – new retail (combined B2C + C2C+ online takeaway foodservice (OTS)) market value, 2014-24
                                            • Market Drivers

                                              • Opportunities in the lower tier cities
                                                • Figure 9: Real growth of per capita disposable income and expenditure, by urban and rural China, 2017 1Q-2019 3Q
                                              • Slowing yet robust growth in online retail sales
                                                • Figure 10: YOY growth of online retail sales and online retail sales of physical goods, Jan 2018 – Oct 2019
                                                • Figure 11: Percentage of physical goods of accumulated online retail sales, Jan 2018 – Oct 2019
                                              • Online shopping user base keeps expanding
                                                • Figure 12: Online shopping user base and penetration, Jun 2016 – Jun 2019
                                              • Well-positioned policy supports cross-border e-commerce
                                              • Market Segmentation

                                                • The fast growing B2C market
                                                  • Figure 13: China - business-to-consumer (B2C) e-commerce market value, 2014-24
                                                • C2C market impacted by new e-commerce law
                                                  • Figure 14: China - consumer-to-consumer (C2C) e-commerce market value, 2014-24
                                                • Online takeaway services
                                                  • Figure 15: China - online takeaway services (OTS) market value, 2014-24
                                              • Key Players – What You Need to Know

                                                • Highly concentrated market
                                                  • Bottom up from consumer to manufacturer
                                                    • Online ventures in the offline space
                                                    • Market Share

                                                      • Winners take all
                                                        • Figure 16: Share of B2C + C2C market (by GMV), 2018 and 2019
                                                      • Pinduoduo is a rising star and new challenger
                                                        • Duopoly in the online delivery market
                                                          • Figure 17: Share of the online delivery market (by GMV), 2018 and 2019
                                                        • Ele.me catches up by integrating into Alibaba’s New Retail ecosystem
                                                        • Competitive Strategies

                                                          • Live streaming and e-commerce go hand in hand
                                                            • All-inclusive loyalty programs
                                                              • Consumer to manufacturer
                                                                • Engaging interfaces with content
                                                                  • Figure 18: Tmall Flagship Store 2.0, September 2019
                                                              • Who’s Innovating?

                                                                • Tmall celebrity stores
                                                                  • Figure 19: Li Jiaqi’s and Jing Tian’s Tmall Global exclusive store
                                                                • JD brings art to life
                                                                  • Figure 20: JD.com’s Bring Art to Life collection, October 2019
                                                                • OTC medicine vending machines
                                                                  • Figure 21: FreshHema’s medicine vending machine
                                                                • Taostyle multiband store
                                                                  • Figure 22: Taostyle store at Hangzhou Kerry Center
                                                                • Anime and food delivery go hand in hand
                                                                  • Figure 23: Zhai e kuai joint membership promotion
                                                                • JD’s future store
                                                                  • Figure 24: JD E-SPACE in Chongqing
                                                              • The Consumer – What You Need to Know

                                                                • Cross-border platforms more attractive to female shoppers
                                                                  • Lower tier city residents favour physical shopping experience
                                                                    • Attract high earners with service and activities
                                                                      • Live-stream shopping still has room to grow
                                                                        • New Retail goes beyond just shopping
                                                                        • Shopping Channel Used

                                                                          • Fashion products and packaged food are most bought consumer goods
                                                                            • Figure 25: Products purchased in the past 6 months, September 2019
                                                                          • More electronics purchase taking place online
                                                                            • Figure 26: Purchase channel, September 2019
                                                                          • OTC medicine/health supplements and alcoholic drinks still have room to grow online
                                                                            • Domestic comprehensive websites are the go-to places, especially for packaged food
                                                                              • Figure 27: Online purchase channel, September 2019
                                                                            • Cross-border websites
                                                                              • Gaining popularity in BPC, alcohol, and health and wellbeing
                                                                                • Target females and seek increments from males
                                                                                  • More residents in tier one cities are buying online, particularly from abroad
                                                                                    • Figure 28: Purchase channel, selected consumer goods, by city tier, September 2019
                                                                                    • Figure 29: Online purchase channel, selected consumer goods, by city tier, September 2019
                                                                                • Category Channel Preference

                                                                                  • Offline is favoured for food and medicine
                                                                                    • Figure 30: Channel preference, rank by gap between online and offline, September 2019
                                                                                  • Signs of offline revival for home appliances
                                                                                    • Buying fashion and BPC products online is new normal
                                                                                      • Younger consumers lean towards online channel
                                                                                        • Tier two and lower tier city residents have a strong affinity for offline shopping
                                                                                          • Figure 31: Channel preference for selected products, by city tier, September 2019
                                                                                        • Low price is not enough to generate offline purchase
                                                                                          • Figure 32: Channel preference, by consumer attitudes towards price and convenience, September 2019
                                                                                      • Super-fast Delivery

                                                                                        • Delivery service is most popular for fresh groceries and restaurant food…
                                                                                          • Figure 33: Instant delivered products bought, September 2019
                                                                                        • …And will expand into other categories in the near future
                                                                                          • Help consumers to develop an super-fast delivery habit
                                                                                            • Figure 34: Instant delivered product bought, by household income, September 2019
                                                                                          • Impatience is a virtue
                                                                                            • Figure 35: Instant delivered product bought, by consumer attitudes towards price and convenience, September 2019
                                                                                          • Unlocking the potential in lower tier cities
                                                                                            • Figure 36: Instant delivered product bought, by household income, September 2019
                                                                                        • In-store Shopping Triggers

                                                                                          • Seeing it and touching it
                                                                                            • Figure 37: In-store shopping triggers, September 2019
                                                                                          • Need for instant gratification
                                                                                            • Add-on services and entertainment are desirable for mid and high earners
                                                                                              • Figure 38: In-store shopping triggers, by household income, September 2019
                                                                                            • Attract men with better product services and women with perks
                                                                                              • Figure 39: In-store shopping triggers, by gender, September 2019
                                                                                            • Tier one city residents attracted to good bargains as well
                                                                                            • New Retail Experience

                                                                                              • Omnichannel makes purchase and stock checking easier
                                                                                                • Figure 40: New retail experience, online & offline retail, September 2019
                                                                                              • Visual search and purchase when watching live streams seeing early success
                                                                                                • Figure 41: New retail experience, new retail features, September 2019
                                                                                                • Figure 42: New retail experience, new features, by gender, September 2019
                                                                                              • Streamline consumer loyalty
                                                                                                • Figure 43: New retail experience, cross-channel loyalty programs, September 2019
                                                                                              • Younger consumers cultivating a habit for using New Retail
                                                                                                • Figure 44: New retail experience, by generation, September 2019
                                                                                            • Attitudes towards New Retail

                                                                                              • Consumer reviews and sales representatives are equally important
                                                                                                • Figure 45: The role of communicating with salespeople and consumer comments, September 2019
                                                                                              • Privacy being traded off for precise product recommendation
                                                                                                • Figure 46: Attitudes towards personal data usage in new retail, September 2019
                                                                                              • Online channel remains competitive in price and choice
                                                                                                • Figure 47: Attitudes towards price and budget control, September 2019
                                                                                              • Delivery should be faster to satisfy the need of lower tier cities
                                                                                                • Figure 48: Attitudes towards convenience and delivery, September 2019
                                                                                              • More than just shopping
                                                                                                • Figure 49: Attitudes towards loyalty programs and shoptainment, September 2019
                                                                                            • Meet the Mintropolitans

                                                                                              • Cross-border platforms appeal more to Mintropolitans
                                                                                                • Figure 50: Products purchased on cross-border websites, by consumer classification, September 2019
                                                                                              • Engage MinTs with additional services
                                                                                                • Figure 51: In-store shopping triggers, by consumer classification, September 2019
                                                                                              • Leverage tech to engage MinTs
                                                                                                • Figure 52: New retail experience, by consumer classification, September 2019
                                                                                              • Low prices are not enough to attract MinTs
                                                                                                • Figure 53: It's cheaper to buy the same product online, by MinTs vs non-MinTs, September 2019
                                                                                                • Figure 54: Both online and offline shopping should be more entertaining, by MinTs vs non-MinTs, September 2019
                                                                                                • Figure 55: It's worthwhile to authorise brand to access my personal data for the personalised recommendation of products, by MinTs vs non-MinTs, September 2019
                                                                                            • Appendix – Market Size and Forecast

                                                                                                • Figure 56: China – new retail (B2C + C2C+ online takeaway foodservice (OTS)) market value, 2014-24
                                                                                            • Appendix – Methodology and Abbreviations

                                                                                              • Methodology
                                                                                                • Fan chart forecast
                                                                                                  • Abbreviations

                                                                                                  This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

                                                                                                  • Market

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                                                                                                  • Consumer

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                                                                                                  • Brand/Company

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                                                                                                  Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted.

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