The requested news item does not exist. Please return to News
The world’s largest online shopping event this year showed that the future of retail in China, while entrenched in cyberspace, isn’t doing away with the trips to the mall.
The world's largest online shopping event this year showed that the future of retail in China, while entrenched in cyberspace, isn't doing away with the trips to the mall.
Sales on Singles Day – like Black Friday or Cyber Monday– in China soared to a record US$30.8 billion, topping last year's total by 27 percent. However, year-on-year, this marked the slowest growth in the 10-year history, a confident signal to retail landlords that have been facing challenges from the rise of e-commerce, says Paige Chuang, senior manager in JLL China's retail leasing team.
Singles Day falls every year on November 11, and is known as Double Eleven in China. It started life as a kind of anti-Valentines campaign to entice singletons into parting with their money, but has since become a world-beating consumer event synonymous with the growth of China's middle class. Chinese consumers flocked to shopping centers in the three weeks leading up to the mammoth sale to nab discounts.
"Increasing disposable incomes, rapid urbanisation and rising living standards make Vietnam one of the most dynamic emerging economies in South East Asia," says Stephen Wyatt, Country Head of JLL Vietnam. According to the Boston Consulting Group, Vietnam has the fastest growing MAC in the region, which will double in size between 2012 and 2020. MAC consumers, whose income is VND 15 million (USD 714) or more a month, will be a key group of potential customers for retailers. Hence, the massive amount of shoppers flocking in and out of shopping malls during the recent Black Friday weekend came as no surprise.
Clothes, sportswear and equipment, cosmetics, and electronics topped the shopping lists of online consumers. In-store, shoppers spent money on food and beverage, discounted gym memberships, underwear, and entertainment such as cinema tickets and children play areas, all of which ran special promotions, according to Brown.
Retail behemoth Alibaba, China's largest company, "set up pop-up stores offering discounts that can be redeemed in physical stores, and other promotions that get the throngs of shoppers buying things not just online but in shopping malls as well," he adds.
Starbucks ran one of the highest-profile online-offline campaigns just months after announcing a partnership with Alibaba. In-store promotions boosted sales in its coffee shops across 11 Chinese cities while incentives through Alibaba's food delivery app, Ele.me, helped to lift online orders over the weekend.
From its start online, Alibaba has moved into physical stores. It acquired InTime, a department store chain, in 2017. Its Hema supermarket is the manifestation of the online-offline trend, a place where shoppers enter a store, buy groceries and walk out without speaking to another human being.
"The online-offline trend has already been building momentum for a couple of years and the physical retail sector now has good grounds for optimism," adds Brown.
Cynics label Singles Day as a marketing campaign. And slowing growth was cause for concern in some quarters of the economy, where China's sluggish stock market and the ongoing U.S. trade war threaten progress.
"But it's a mistake to view it as merely consumerist spectacle. Chinese consumers are growing richer and more sophisticated while remaining open to new ideas," Brown says. "Shopping malls operators are getting more skilled at cultivating experiences and running promotions to draw foot traffic."
Alibaba has deemed the online-offline trend 'new retail', the strategy credited with breathing life back into physical retail in the words second largest economy. Retailers with an established online presence can profit in-store with one valuable commodity: data. By profiling online shopping habits and making judgments about everything from site selection to stock and promotions, they can capture consumer interest without wasting space.
This blended, technology-first approach should serve as a lesson to retail landlords and developers worldwide, says James Hawkey, director of retail JLL China. "Retail in China has already toppled the meaning of traditional retail; it is no longer simply about providing a place to buy or sell goods and services," he says.
– ends –
>>Read more about JLL Services
>>Read more about JLL News
>>Read more about JLL Research
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with nearly 300 corporate offices, operations in over 80 countries and a global workforce of 83,500 as of March 31, 2018. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.
+84 924 154 092