LONDON — Despite the coronavirus outbreak, which is threatening spending ahead of Chinese New Year, China will continue to be the driving force for retail growth in the new decade.
The country’s online retail market is predicted to hit $1.8 trillion in 2022, more than double the size of the U.S. market and advancement in technology will play a greater role than any other market in boosting spending, according to the report “Luxury Chinese Consumers in a New Decade: 5 Macrotrends Shaping the 2020s.” The study was released Thursday by Reuter Intelligence, the research and insights arm of the Shanghai-based Reuter Communications.
Chloe Reuter, founder of the luxury intelligence, digital, communications and marketing agency, said, “Being at the forefront of pioneering technology is absolutely vital for luxury brands in China. Luxury Chinese consumers enjoy the latest, cutting-edge technology that’s presented to them by the luxury brands they adore.”
She warned brands that “if you do not speak to them using the same diverse range of seamless online-off-line connectivity, with features such as AR and AI, then you are behind your competitors. Technology is not being used in China simply as a gimmick, but has a direct impact on the quality of service they experience thanks to the digital capabilities across the unique digital eco-system.”
The new 5G stands at the heart of the next wave of the digital revolution, and China’s Huawei holds some of the most advanced 5G technology. Despite U.S. President Trump’s — and other countries’ — attempts to curb Huawei’s global expansion, British Prime Minister Boris Johnson is set to allow the Chinese tech giant to roll out a super-fast 5G mobile broadband in the U.K.
Across China, 5G services were adopted by state-owned carriers China Mobile, China Unicom and China Telecom last October. There are expected to be 170 million 5G subscribers in 2020 and more than 600 million by 2025, accounting for 40 percent of the global market.
The report predicts that “a diversity of products and services will become digitally interconnected, everything can be virtually test-able and businesses will obsess over the data of consumers who expect to access more information in the other direction, from the business itself.”
For luxury businesses, the technology set to launch over the next 10 years is expected to enhance the consumer experience considerably. Products and experiences that don’t provide this feeling of ‘instant access’ will seem anonymous — and obsolete.
With mobile tech becoming more seamless in terms of fingerprint access and facial and voice recognition, the consumer is set to engage with the physical space even more.
Artjom Hatsaturjants, head of insights at New West End Company, which represent 600 businesses in London’s West End, said they have implemented a range of services tailored to the Chinese shopper, such as introducing Chinese mobile payment solutions including AliPay and WeChat Pay, and WeChat Mini Programme to guide and inform Chinese visitors around the destination. It’s estimated that an influx of Chinese visitors to Bond, Oxford and Regent Street will spend 17 million pounds during the Chinese New Year period.
The report said facial recognition will become a part of everyday life, and that China will have almost 50 percent of the global facial recognition market share by 2023.
“At Beijing airport, you can walk past the flight times board and it will instantly display your flight information. Some schools operate their entrance gates with facial recognition that clocks the time each student enters and leaves,” the report said.
The Reuter report listed four further trends: It predicted that the luxury landscape will become ultra-competitive; the definition of luxury will be continually evolving, and Chinese national pride, and a greater awareness of sustainability will increase.