But never has that been more immediately and literally true than now, as China slowly emerges from a pandemic that is still gripping the west, keeping people in their homes and shuttering businesses of all kinds.

Retailers across the UK, North America and western Europe are currently in dire straits as the coronavirus lockdown brings footfall to record lows, with shopping centres and high streets faring particularly poorly. But just because consumers are confined to their homes doesn’t mean they aren’t shopping – or that there isn’t demand for everything from food and entertainment to indulgent purchases like beauty products and alcohol that will give them back a semblance of normality.

The challenge for retailers is to reinvent how they market to, serve and deliver consumers. Here, western retailers can learn from China, a country whose approach to retail was already ahead of the west – particularly in terms of how it blends with technology, entertainment and social media.

The coronavirus pandemic brought about even more opportunity – and need – for innovation in Chinese retail, and their solutions could help western retailers rise out of their current slump. Here are four innovations that western retailers can learn from.

Live commerce

Live commerce, a growing trend that blends livestreaming and ecommerce by allowing consumers to tune into livestreams and directly buy the goods featured in them, has taken on a new importance in China thanks to the outbreak of coronavirus, with millions of Chinese consumers confined to their homes and searching for entertainment as well as a convenient way to shop – while brands are searching for new ways to bring their products to consumers.

The benefits of live commerce are that livestream viewers can see the product, which is shown off and described by Key Opinion Leaders (or KOLs, the Chinese term for influencers), ‘in action’; learn more about its background and qualities; and feel as though they are receiving a recommendation from someone whose opinion they trust.

During the pandemic, therefore, live commerce has been a particular boon to those sectors whose brick-and-mortar stores were forced to close, or who usually rely heavily on an in-person shopping experience to sell products. It saw particularly swift uptake from the luxury goods industry, for which China is a critical market, with luxury brands and fashion labels like Dior, Gucci, Chanel and Lanvan using livestreams to broadcast virtual fashion shows.

influencer

In March, Shanghai Fashion Week partnered with Alibaba-owned Tmall to broadcast its first digital event, featuring a mixture of virtual fashion shows, ecommerce livestreams and panel discussions. Thanks to Tmall’s integrated ecommerce features, this arrangement enabled a ‘see now, buy now’ mentality in which shoppers could directly buy the items as they were shown off – a first for a fashion week event, which typically emphasise creativity and fantasy. Shanghai-based PR consultant and model Qiu Bohan, who took part in some of the livestream sessions, told the South China Morning Post, “I hope this live-stream method could stay on but as a [value-add] complementing the main fashion presentation where designers can present their creativity full.”

Other brands that have turned live commerce to their advantage during the coronavirus pandemic include Joyoung, a maker of a small kitchen appliances, which began broadcasting daily from a virtual showroom in February. The company has seen month-over-month growth in its sales of soy milk makers, high-speed blenders, toaster ovens and dishwashers, and grew its social media presence by 10,000 followers in just a few days.

Drinks brands Budweiser, Rémy Martin, Carlsberg and Pernod Ricard have found an ingenious way to compensate for the closure of bars and nightclubs when they partnered with ecommerce giant JD.com and Chinese music label Taihe Music Group in March to create an online clubbing experience. Each week, JD.com hosts a three-hour performance by one of Taihe Music Group’s DJs, with alcoholic drinks promoted throughout that viewers can buy directly from the stream. It has already seen a 70% increase in sales of imported liquor from one partner brand during a livestream, while during another show, sales of beer increased by 40% compared to the day before. JD.com has also confirmed that the livestreams will continue even as China’s lockdown restrictions lift.

Six businesses innovating their product offering in response to the coronavirus pandemic

Given that a number of international brands have seen success from live commerce in China, it shouldn’t be too much of a stretch for them to apply the same tactic in the west. However, although livestreamed entertainment has seen an uptick in popularity during the coronavirus lockdown, no brands appear to have yet used it as a channel to drive direct sales.

One of the issues is a lack of infrastructure, with few platforms available that offer both livestreaming and ecommerce functionality. Amazon launched its own streaming platform, Amazon Live, with little fanfare and limited promotion last year, which has unsurprisingly not led to much interest from western businesses. Facebook was reported in late 2018 to be testing a shopping mode for livestreams, but no more news of the feature has yet been announced. Instagram is another obvious candidate, with established livestreaming (IGTV) and shopping (Checkout with Instagram) features, but few brands seem to have tried to combine the two, even in an improvised way.

But if there ever was a time to make a success of live commerce in the west, it would be now – and any retail brands that are far-sighted enough to learn from China and innovate on their shopping experience could stand to reap the benefits.

Group chats and private domain traffic

WeChat, the omnipresent Chinese ‘super-app’ that combines messaging features with games, ecommerce, payments and a host of other features, has become synonymous with digital life – and indeed, daily life – in China. During the coronavirus pandemic, WeChat has also become a creative way for brands to sustain their businesses and reach consumers.

Fashion brand Peacebird, for example, directed its employees to invite customers of the brand to special group chats where they could browse Peacebird’s products and place orders on its WeChat mini-program store, thus encouraging them to keep shopping even during the pandemic with offline stores closed. A number of other Chinese fashion brands, including Li Ning, Bosideng, and Psalter have used similar approaches to sustain their businesses during the outbreak.

Anta Sports, China’s largest sportswear brand, took things a step further by giving individualised WeChat QR codes to 30,000 employees and distributor partners. These QR codes directed customers to the brand’s WeChat store while tracking which employee had referred them, allowing Anta Sports to attribute sales to each employee and award them a percentage cut of each transaction – which incentivised them to drive sales.

This strategy is part of what is known as private domain traffic (sometimes called private-controlled flow, or private channel traffic) and is a newly-emerging marketing and sales technique in China that, like live commerce, gained new importance and became a way for retailers to sustain themselves during the coronavirus pandemic. It is a type of customer relationship management (CRM) that focuses on a brand’s existing customers, as many Chinese brands feel that they have reached the upper limit of their new customer growth and have turned to improving the profitability of existing customers instead.

Using a chat application like WeChat (brands can also use micro-blogging platforms like Weibo, a company app, or any platform that has a group messaging feature – WeChat is the most popular due to its ubiquity and ecommerce integrations), brands can group together customers with similar buying habits and target them with specific messaging and promotions within the group. Some brands use Key Opinion Consumers (KOCs) to connect with consumers instead of employees. KOCs play a similar role to KOLs in giving trusted recommendations to consumers, but they specialise in testing and reviewing products, with more of an emphasis on reliability of content than on the size of their following.

Image: Jirapong Manustrong/Shutterstock

Group messaging is popular with brands and marketers in China as it results in a more personal connection and more customer interaction than something like email, which is rarely used as a form of communication in China. It also makes it easier for products and promotions to be shared with friends and family, enabling them to gain traction much more quickly.

While western consumers are generally less mobile-and chat-oriented than Chinese consumers, apps like Facebook Messenger and WhatsApp are still used by billions of people to connect with friends and family every day – and never more so than at present. In a blog post published on 24th March, Facebook revealed that total messaging on its apps had increased by more than 50% over the past month in many of the countries hit hardest by the virus. In Italy, in particular, Facebook reported seeing more than 70% more time spent across its apps since the crisis arrived in the country.

With figures like this, messaging is looking increasingly like an opportunity that retailers can’t afford to ignore – and Chinese retailers have already provided a blueprint for how they can go about using it.

On-demand grocery delivery

Just like in the west, when lockdown orders were put in place, first in Wuhan – the epicentre of the outbreak – and then across China, demand for grocery retail spiked and many customers, unable to safely leave their homes, turned to online deliveries to fulfil that demand. Unlike in the west, however, China’s grocery retailers were in a strong position to meet it.

Among the best-placed were New Retail outlets Freshippo (Hema), owned by Alibaba, and 7Fresh, owned by JD.com. New Retail is a trend in Chinese retail – primarily, but not exclusively, grocery retail – that equips brick-and-mortar retail stores with cutting-edge technology in a bid to bring the online experience offline. Two of the defining characteristics of New Retail are that all orders and payment are carried out by app, and that stores offer guaranteed delivery within a certain time frame – usually 30 minutes to an hour – to customers living in a certain radius.

As a result of this, China’s New Retail grocery stores had the delivery infrastructure to fulfil a high number of orders placed online, and they had customers who were already accustomed to placing online orders for delivery. Which is not to say that they didn’t have to get creative at certain points: Reuters details how Freshippo repurposed its bulk fruit boxes, intended for the Lunar New Year, to meet soaring demand for fresh fruit, while Harvard Business Review relates how Alibaba and JD.com needed to rethink the last mile delivery process, employing creative measures to get packages to people like installing deposit boxes for contact-free delivery and using drones and smart vehicles to access hard-to-reach areas.

parcel delivery

However, on the whole, the two companies were well-placed to deal with the sudden and rapid escalation in demand – something that can hardly be said for most western supermarkets, whose shelves were emptied and whose online order slots were booked solid for weeks into the future. And while Alibaba and JD.com would be more aptly compared to an ecommerce giant like Amazon, even Amazon has had difficulty keeping up with the sudden surge in orders from housebound customers, having to temporarily shut down its Prime Pantry delivery service and disappointing and frustrating third-party sellers with its announcement that it would only be using warehouse space to stock ‘essential items’.

While it isn’t possible to go back in time and improve western grocery retailers’ omnichannel infrastructure in time for the pandemic, there are still plenty of lessons that they can learn from this that will benefit them going forward. In the US, grocery apps have been experiencing record download levels, and while many consumers will return to purchasing in-store once the pandemic is over, some of these behavioural shifts are likely to stick. Supermarket chains have put emergency measures in place such as repurposing closed locations as ‘dark stores’, sites that exist only to fulfil delivery orders, and extending opening hours for collection and delivery.

In Europe, supermarkets have forged new partnerships with delivery companies like Uber Eats, who are delivering food necessities on behalf of French supermarket chain Carrefour and Spanish service station chain Galp, and Deliveroo, which has entered into a partnership with Marks & Spencer in the UK – Marks & Spencer’s grocery delivery service with Ocado not being due to launch until September, which underscores the importance of not delaying with digital transformation.

Grocery retailers may be viewing these as temporary measures that can be lifted after the crisis has passed – but they should consider the merits of keeping some of them in place in the long term, and look to China for other lessons that can be learned about omnichannel selling.

Digital Transformation Monthly: Coronavirus Crisis – April 2020

Autonomous delivery vehicles

Could the spread of coronavirus hasten the arrival of driverless delivery vehicles? In China, signs increasingly point to yes: driverless delivery start-ups saw an unexpected surge in demand as the virus took hold in the country and ecommerce companies, including giants like Alibaba, JD.com and Meituan Dianping, increasingly turned to autonomous vehicles as a way to reduce risk and prevent the spread of infection.

On 8th March, Bloomberg reported that Neolix, a Beijing-based driverless delivery startup, had booked orders for more than 200 vehicles over the past two months – prior to this, it had only produced 125 vehicles since manufacturing began the previous May. Ecommerce giant JD.com has also been using drones and autonomous vehicles to deliver supplies to communities in lockdown, particularly in rural areas; and food delivery giant Meituan Dianping has modified a fleet of small driverless vehicles, called Modai, for grocery delivery in Beijing’s Shunyi district.

Autonomous vehicles have been slow to win over the trust of consumers around the world, largely due to safety concerns, as well as a number of high-profile disputes between the companies that produce them. However, now, it is precisely because of safety that autonomous vehicles might come into their own.

Coronavirus has also provided an unexpected opportunity to trial driverless delivery vehicles in a relatively safe environment: in China, there are normally restrictions on the use of autonomous delivery vehicles on open roads, but these were relaxed during the pandemic due to a lack of traffic.

Recognising the potential benefits of driverless delivery vehicles, local authorities in China have offered incentives to fund the purchase and operation of autonomous vehicles in their jurisdiction for up to 60% of the retail price. Search giant Baidu has also opened up low-speed minicar kits and autonomous driving cloud services on its open-source platform, Apollo, free of charge to companies aiming to combat the coronavirus pandemic.

Similar developments are now beginning to take place in the west, and it probably won’t come as a surprise that a Chinese company is leading the way – Pony.ai, a Chinese driverless car start-up backed by Toyota, has partnered with ecommerce site Yamibuy to bring autonomous delivery to northern California.

The use of autonomous vehicles for delivery isn’t entirely within the control of ecommerce platforms or retailers, as it can depend on local authorisation and restrictions. However, some are using smaller autonomous delivery robots instead, such as in Milton Keynes, where autonomous delivery start-up Starship Technologies has partnered with supermarkets like Tesco and Co-op to deliver food to customers under lockdown.

While roads – and pavements – are unlikely to be as friendly to autonomous vehicles once lockdown restrictions ease, the coronavirus pandemic could play a vital role in normalising the technology and helping delivery companies to perfect their technology and gather data.