Topics Discussed and Key Points:
● Major trends across China eCommerce and consumer behavior in the past year
● Categories that are doing really well in China today
● Non-traditional categories that are on the way up
● The younger generation’s move “back to basics” and “materialism fatigue”
● Finding the keys to finding purchase motivation amid China’s “post-consumer high”
● China’s anti-monopoly policies and their long-term implications
● What digital online platforms Michael is most excited about
● The rising dominance of “information capitalism” and its implication on culture
● Bridging the in-store and the digital experience
● Why live streaming has not taken off in North America yet (and when it will)
Today on The Negotiation, we talk with Michael Zakkour, founder of 5 NEW DIGITAL, an exclusive consulting organization that advises its clients on strategy, structure, implementation and transformation in the age of the digital industrial revolution - across the "5 New" - New Retail, New Technology, New Finance, New Supply Chain and New Manufacturing. He is also the author of "New Retail: Born in China, Going Global.”
We look back on the past year and note the major developments across China's eCommerce and consumer behavior.
Michael says, “What we’re really seeing now is a blending of the idea of, ‘What is eCommerce?’ with the idea of, ‘What is social commerce?’” He contends that this is an inevitability that was fast-forwarded as a result of the pandemic. The typical Chinese consumer now no longer sees a distinction between the two—that live streaming, AR, VR, ER, and the like are now one and the same. “It’s all becoming part of this larger-than-life, technicolor, robust experience of shopping.”
He then goes into the current and rising trends in the market, which turn out to largely be the home, beauty, and kitchen industries as consumers—particularly the younger generation—have begun to embrace a “back-to-basics” lifestyle in the wake of “materialism fatigue”.
Michael also does a deep dive into the question of monopolistic practices in China and how they relate to those in the U.S. He addressed the potential for decoupling, saying that it is not so much the economies of the West that we should be considering in this particular case, but the decoupling of the world of technology and information between East and West.
Finally, Michael looks forward towards the retail landscape in 2022, touching on the economic and cultural impacts of what he calls “information capitalism”, China’s mastery in bridging the in-store and digital buying environments, and why live streaming is set to take the world by storm this year—even in the West.
“What we’re really seeing now is a blending of the idea of, ‘What is eCommerce?’ with the idea of, ‘What is social commerce?’ [...] Live streaming, VR, AR, ER—it’s all becoming part of this larger than life, technicolor, robust experience of shopping.”
“Chinese companies have been far better than their Western counterparts at making digital commerce, shopping—where people are actually shopping: It’s social, it’s fun, it’s engaging, it’s robust, it’s loud, it’s colorful. It’s everything that shopping should be.”
“You will find all the keys to purchase motivation in China through [their] language, culture, history, and philosophy. Over and over and over again, the brands and the retailers and the CPGs and the companies that make it in China spend the requisite time ahead of time, and are constantly looking into those core four in order to build the Chinese version of who they are.”
“Are we headed to a decoupling? Now, when people talk about decoupling, they’re usually thinking about the decoupling of the economies of the West in China. But in this particular case, we’re talking about: ‘Are we heading towards the decoupling of the world of technology and information between East and West?’ That’s the big question.”
“Our relationship with and the usage of technology and information, along with our relationship with the environment and sustainability, and our relationship with our government are going to be the three mega-forces that will shape the rest of this century.”
“Physical retail matters and it always will. So, the question then, is, ‘How do you build a relationship between the physical and the digital worlds, and the physical and the digital experiences?’”