The impact of COVID-19 on traditional ‘bricks and mortar’ retailing cannot be underestimated. Lockdowns have profoundly affected the way people shop. We look at the growing market for online retailing in China.
It would be wrong to think the 2020 pandemic caused consumers to shift their shopping habits away from ‘bricks and mortar’ stores towards online retailers. Instead, it is better to view the COVID-19 as an accelerator of trends that were already in motion.
This acceleration has been dramatic. In 2018, only 22% of US citizens shopped online for groceries but that figure shot up to 42% in 2020.1 While the catalyst for this increase might have been the pandemic, it does not look as if the trend will be reversed when we finally return to normal life.2
E-Commerce is the New Normal
When Chinese apparel stores reopened following lockdown, they reported footfall levels of 50-60% below pre-crisis figures.3 The demand for fashion had not diminished, what had changed was the desire of people to visit shops. At the same time, a protracted period at home has meant consumers have become inured to the process of shopping online.
During Paris Fashion Week in 2020, Chinese showroom agency DFO utilized livestreaming to reach Chinese buyers. It was estimated their audience was double what would have normally been able to travel to Paris. This resulted in the agency hitting 80% of its sales targets, with 95% of those sales being made online.4
This trend is not going away. It has recently been announced that all 93 shows for Paris Fashion Week AW21/22 will be virtual and we can surmise that, even when it is possible for buyers to return to the catwalk, a sizeable constituent of consumers will remain online.5
Advantages of E-Commerce
Online retailing has many advantages for consumers. As the DFO figures demonstrate, a virtual showroom can reach a greater number of people than can physically sit beside the catwalk. Even for consumers on a high street budget, online shopping gives them greater choice and, when it is done correctly, is a more convenient and practical experience.
E-commerce also gives the consumer access to better information about a product, thereby enabling them to make valued judgements. More and more consumers are looking for transparency when choosing a product. They want to see evidence of greater sustainability and better quality. Online retailing allows manufacturers and brands to deliver this information with the click of a button. By accessing the correct part of the retail website, the consumer can easily find the accreditations and standards to which the manufacturer and the product conform.
Key to developing a successful online presence is creating the right relationship with the audience/consumer. Huang Wei, known professionally as Viya and dubbed the Livestream Queen, sells everything from cosmetics and clothing to houses and rocket launches. Her secret is to provide entertainment while positioning herself as “someone who helps the customer make a decision—I need to think about their needs.” She dresses like them, speaks directly to them, all despite having been a millionaire since the age of 34.6It is predicted offline sales will continue to drop as businesses adjust to a post-pandemic world. The decline in Europe is expected to be between 8% and 13% and in the US between 22% and 27%.7 Finding effective and efficient ways to sell online are therefore the only solutions left open to apparel brands that want to grow their market share.
China has a growing, connected middleclass with an extensive social media infrastructure. This has led to the creation of a highly digitalized retail ecosystem that was ready estimated to be worth USD 1.5 trillion in 2019, accounting for a quarter of all sales.8
Omnichannel retailing uses a wide variety of mechanisms to sell to consumers. It shifts the market focus from key opinion leaders (KOL) to key opinion consumers (KOC). This is one reason why Viya positions herself on the side of the consumer and not the brand.
The key to succeeding in an omnichannel market is the ability to map both product quality and the target audience’s engagement with the latest trends. Brands that are able to successfully chart this data will be at an advantage because they will have the information to bring the right product to the market, at the right time, and via the right channel. In a dynamic and competitive market like China’s, brand success is based upon the ability to respond quickly to changes in consumer demand.
SGS offers a comprehensive, vertical omnichannel solution that helps brands to successfully enter the Chinese e-commerce ecosystem. Built on the back of over 20 years of experience in helping Chinese manufacturers navigate the complexity of national and international regulations, SGS’s China Omnichannel Solution incorporates:
- Market compliance – training on regulations and protocol development
- Product compliance – material and product testing, label reviews, factory audits, etc.
- Consumer engagement – through livestreaming events and trusted certification labels such as the SGS Independently Checked Mark (IC Mark)
- Service enhancement – return and failure rate analysis, market spot-checks, random sampling checks
SGS’s China Omnichannel Solution gives brands the tools to bring safe, compliant products to a dynamic market. After all, it’s only trust because it’s tested.
Learn more about SGS Softlines and Accessories Services.
Learn more about SGS’s Chinese GB standards textile testing services.
For more information, please contact:
Global Softlines Technical Innovation & CN R&D Manager
1 COVID-19 crisis sparks ‘inflection point’ for online grocery — and huge revenue for Amazon
2 42% of consumers vow to shop more online even after shops reopen on 15 June
3 The State of Fashion 2020 – Coronavirus Update
4 The State of Fashion 2020 – Coronavirus Update
5 Paris Set To Go All Digital As It Releases Its Autumn-Winter 2021 Show Schedule
6 Livestream Queen Can Sell Anything
7 Three ways retailers are re-thinking the role of brick-and-mortar stores
8 China digital consumer trends 2019