LONDON — Despite reports of a slowdown in spending, China remains a growth story, with consumers demanding ever-more personalized services and fun ways to shop, according to Amee Chande, Alibaba Group’s managing director U.K. and Europe.
“Even if you take the bottom end of the growth projections in China, and you forecast that out until 2020, the growth of consumption in China would be larger than the entire market of the U.K. or Germany. And that is at the bottom end of the forecast,” said Chande.
Chande said the growing middle classes; people living outside tier 1 and tier 2 cities, and the under-35s — who have come of age in a digital-retail environment — are driving the growth, and are embracing innovation.
“By 2020, there will be half a billion middle class consumers and it’s particularly interesting to pause and think about the fact that they are middle class. This increasingly large population is not just interested in luxury products, but in everyday products to increase the quality of life.”
She cited some compelling statistics, and how China’s e-commerce giant is leveraging those numbers to create more demand and grow its business.
By 2020, 42 percent of the growth in consumption will come from e-commerce; more than 65 percent of consumption is being driven by those under the age of 35, men and women who think digital before they think brick-and-mortar. China has drastically less brick-and-mortar retail square footage per capita than the U.S., she said.
On Singles’ Day, more than 63 percent of consumption on Alibaba’s platform was done through a mobile device. According to the site’s internal forecasts, that figure is set to reach 75 to 80 percent in the next couple of years.
It was Alibaba, Chande said, who transformed the traditional Singles’ Day from a time to mope or moan with fellow singletons into a shopping bonanza that is now 4-5 times bigger than Black Friday and Cyber Monday combined.
Last year Alibaba tempted shoppers on 11/11, asking them to shake their mobile phones to create shopping opportunities. In past years the e-commerce giant has staged a massive TV production at the Beijing National Stadium, also known as the Bird’s Nest, with a countdown to 11/11 sales promotions.
Alibaba doesn’t need Chinese singles, or special days, to create personalized or special shopping experiences, however. Chande said the company has been working with Estée Lauder on a survey that allows customers to figure out suitable skin cleansing regimes, and on a separate “magic makeup” program that allows users to test colors virtually and share with friends. They’ve also done a “magic match” with clothing and accessories, that allows shoppers to ask brands on the site for help putting together an outfit.
Alibaba also has a technology tool that allows shoppers to snap a picture of someone wearing an outfit, and instantly search the site’s entire platform to identify it and potentially purchase it.
She said the aim with fashion is always “to create an exciting environment that lends itself to the category. It really is about social, about latest trends, about differentiation.”
In terms of other trends Chande and her team are seeing — at least among the younger consumer base — is an interest and a willingness to purchase at full price.
“As the e-commerce market has evolved, we see that it originally started just the same way as it did in the West, as a clearance outlet, where you could go for off-season merchandise. Today, it’s often the first place shoppers will go for the latest trends and there is an increasing willingness in the under-35 age group to purchase full price,” she said.