Texere lands in Shanghai and China Snapshot

May 05, 2022

NEW OFFICE IN SHANGHAI

In its efforts to support and follow clients in strategic markets, Texere is expanding its presence in China, the world's fastest-growing market. Hence, Texere Advisors Consulting Shanghai Co., Ltd. has been incorporated and operates out of its office in Plaza 66, in the heart of the city.

Jason Tao, Texere China Country Manager, will be a strategic asset to us as well as our partners in China and Europe.

The opening of a Texere office in China will help strengthen our existing network of stakeholders, as well as develop new business opportunities for our brands.

 

CHINA SNAPSHOT

China is one of the major players in the modern economy. After an exponential GDP growth over the past years, China's growth has now slowed down and the market matured.

SOME NUMBERS AT A GLANCE:

RETAIL SALES

In 2021, the total retail sales in China amounted to approximately 6.7 trillion USD - of which 5.8 trillion came from the urban areas - showing an increase of 12% compared to 2020, and an average growth rate of 4%.                      

In 2021, online retail sales reached almost 2 trillion USD, an increase of 14% over the previous year. 

Just in January and February 2022, the retail sales of consumer goods in China amounted to 1.15 trillion USD. This indicates a 7% increase in revenue compared to the same period of the previous year. However, in March 2022 China's retail sales declined by 3.5% year-on-year due to new lockdowns. Sales were down for most categories:

  • cosmetics (-6% vs 7%), 

  • garments (-13% vs 5%), 

  • jewelry (-18% vs 19%), 

  • personal care(-1% vs 11%), 

  • home appliances (-4% vs 13%), 

  • furniture (-9% vs -6%), 

  • automobiles (-7% vs 4%), 

  • office supplies (10% vs 11%), 

  • telecoms (3% vs 5%), 

  • oil products (10% vs 26%). 

 

THE FUTURE OF CHINESE BRANDS

Chinese brands are becoming more present in international markets and competing with foreign brands - and in some cases even prevailing. For example, in 2021, Shein, a Chinese e-commerce company founded in 2008, was the most popular brand in sales in the US with 28% market share in fast fashion sales.

 

EVERCHANGING CONSUMERS

China’s already large contribution to global consumption is expected to grow with time. Indeed, Chinese household consumption is roughly 38% of GDP (lower than the 50% for the APAC region, 52% in EU, 68% in the United States). This gap is explained by a higher savings rate in China than other countries.

The World Economic Forum predicts that, if the Chinese Communist Party commits to provide a more equal income distribution, China will become the world’s biggest economy in 2028.

Chinese consumers spend a lot on fashion, accessories, electronics, and, lately, electric vehicles. The latest is partially due to governmental subsidies and payment plans to support and encourage the purchase.

However, value-added and high-end services like health management or leisure cruises are yet to be demanded by medium to high income Chinese consumers, but experts say it is a matter of time before it changes. 

 

SOCIAL E-COMMERCE ON THE RISE

In China, the already-existing fusion between shopping and entertainment helped livestream shopping emerge almost effortlessly. Livestream shopping is used by brands to promote and sell products through livestreams on digital platforms, often in collaboration with influencers. The aim is to provide consumers with an immersive and interactive experience, allowing them to ask questions and buy products during the livestream.

Sales through social media channels around the world are expected to nearly triple by 2025. China is the global leader when it comes to purchases on social media platforms, in fact, retail social commerce sales in China in 2021 amounted to 351.6 billion USD.

 

 

A DIFFERENT, FAR MARKET

Being closed for two years made China an even more far away market for foreign brands. The distribution models, customer preferences and market trends are evolving very quickly, making a targeted localised market entry strategy more important than ever. We help brands bridge this gap by finding suitable distributors, able to implement the correct brand positioning and grow the brand sustainably. We also create and implement omnichannel marketing strategy and help manage and create content for important social media channels such as Wechat.

Reach out to us today to understand how you can grow your brand in China at info@texereadvisors.com

 

 

Sources:

National Bureau of Statistics of China

McKinsey & Company

Trading Economics

China Briefing

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