In this episode of The Negotiation, we speak with our good friend and past guest, Michael Zakkour. Michael is not only a best selling author on Amazon with China’s Super Consumers and his latest release, New Retail: Born in China Going Global, he is also the Founder of 5 New Digital. For our second recording with Michael, we focused quite a bit on the impact of COVID-19 as this really is the most important topic on all minds including corporate and the brands they own and manage. We talk about which retailers are doing well vs those that aren’t, and what key strategies are making the biggest difference, bearing in mind that “doing well” has taken on a more subdued metric. We also look specifically at Chinese brands for some answers on both accounts as a country whose economy has come back online recently and some data points there are starting to come in. We talk about changes in consumer trends that we can already see taking place and some predictions on more to come. We end with a look back to the last pandemic of this magnitude, the Spanish Flu, and track the outcomes on consumers then, through until today, trying to make sense of what we’re going through, especially as a business owner would, and the opportunities for entrepreneurs who might be buoyed by some strong tailwinds of opportunity. Enjoy!
Today on The Negotiation, Michael Zakkour returns to discuss the impact of COVID-19 on the state of retail in China and the rest of the world.
Setting the context for the discussion, Michael says that it is not a question of which retailers are doing well, but which integrated systems are. One of the factors that held China together during the worst of the crisis was the “ecosystems for retail, commerce, and communication that Alibaba, JD, Tencent, Pinduoduo, and Kaola had built.” These ecosystems reliably put products into the hands of consumers regardless of distance and are made even more seamless via technologies such as contactless delivery.
Michael warns that the tail end of the COVID-19 crisis will only hasten the demise of those companies who are “just hanging on”, along with physical retail in general. Specifically, malls and department stores were already in decline before the outbreak—their future does not look any better.
The eCommerce landscape, on the other hand, will experience both positive and negative developments. “The difference between eCommerce, digital commerce, and the New Retail,” says Michael, “is that, in the New Retail, physical retail actually matters.” The clicks will not spell the demise of the bricks. Rather, the key is in how a brand will integrate their physical and digital presence. To stay in the race, digital should directly influence physical.
Some consumer behaviors in China have been permanently altered. Ecommerce solutions will obviously be on the rise. A “stay-at-home culture” will also emerge as more people realize how efficiently they can continue to live and work in the comfort of their own living spaces, solely using the power of the internet.
Even as lockdowns around the world are lifted, the way we do business will be completely different in the new normal. In order to thrive in this upcoming reality, brands will be wise to “rethink how they make, move, sell, and buy” by reevaluating their business model from the perspective of four different Cs: consumer-centricity, customization, convenience, and contribution.
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Despite being the world’s most potent economic area, Asia can be one of the most challenging regions to navigate and manage well for foreign brands. However, plenty of positive stories exist and more are emerging every day as brands start to see success in engaging and deploying appropriate market growth strategies – with the help of specialists.
The Negotiation is an interview show that showcases those hard-to-find success stories and chats with the incredible leaders behind them, teasing out the nuances and digging into the details that can make market growth in APAC a winning proposition.