The Future of China in 2021
15 December 2020
Author: Jasmine Waters
China has unarguably been the epicentre of attention for 2020. As quickly as the world watched China descend into chaos, they bounced back to the forefront of future hope. As life for Chinese consumers tentatively heads back to a king of normalcy, many brands and businesses continue to look towards Asia to try and plan for an uncertain future. What will China teach us in 2021 and how can others apply it?
What is happening in China?
According to The Business of Fashion and McKinsey & Company’s ‘State of Fashion 2021 Report’, fashion related sales in China are set to return to pre-pandemic levels in the imminent future, with early predictions set at Q1 2021 by the latest. Many don’t find this too surprising. There has been a noticeable rebound in consumption in China, with many consumers who normally choose to spend disposable income abroad now having to face the new reality of only spending domestically. Travel still doesn’t appear to be a viable widespread option going forward, and as a result, there is new opportunity for small and independent brands to be discovered. This focus on the abilities of China’s domestic spend has led to a new energy in their e-commerce platforms and the re-thinking of physical retail.
What early signs can brands learn from?
An early prediction for the state of China’s retail in 2021 is that there may be more stores found in more cities. Across the Asia Pacific, the offline market is expected to increase by at least 5%, and physical footprint is now in demand to meet what is needed in the domestic market. There is now a greater realisation that there are a large number of consumers how have an excessive amount of money to spend, and there needs to be a renewed effort into overall expansion. What could massively work in smaller brand’s favour is the growing desire to explore different culture and global product while still staying in the confines of a country. Although it may be more difficult to supply this in a physical way, but first steps can certainly be taken digitally through platforms such as livestreaming.
Alongside this, there’s a significant increase in the use of discounting, in a bid to consolidate whatever was left of an existing customer base. This coupled with the turning point for China’s existing e-commerce platforms marks a distinct change in market dynamics, utilising the digital to interact in an almost department store fashion. In amongst this remains the need to find a harmonious balance between online and offline in the battle to build and maintain customer relationships. Across the globe we know that budgets will be stretched as operating costs in China look to be rising. Brands that can create the strong ties to Chinese consumers, both domestically and abroad, will stay in the strongest position.
Image source: https://cdn-a.william-reed.com/