Xiang Zhi, team leader of the annual CE China show – a global IFA event in Guangzhou, was born in China. Following his studies in Germany, he began his career in the German exhibition industry. After years of international exhibition experience, in 2018, he joined the IFA team of Messe Berlin GmbH. Here, he offers a view of the many opportunities inherent in the Chinese consumer marketplace to Dealerscope’s editor in chief, Nancy Klosek.
Klosek: Please give our readers an idea of the differences in the style of CE/appliance retailing in China versus the style of retailing in the U.S. What ways of selling these products to consumers stand out in China as uniquely appealing for the Chinese consumer?
Xiang Zhi: Online shopping via mobile devices is getting more common in China. Almost everyone in China has a mobile phone shopping app and uses it for purchasing daily necessities. Customers still view the products in the store, but then go home and place an order online, benefiting from discounts.
Livestreaming sales are very popular in China, similar to TV sales in the U.S. Celebrities and professional sellers will introduce products to the audience during live broadcasts. The audience can place orders directly on their mobile phones.
Klosek: November 11 – or 11/11, which is Singles Day in China, is similar to the U.S.’s Black Friday, but on a much larger scale. Please describe for our readers how the dynamics of Singles Day play out in terms of the Chinese retail market.
Xiang Zhi: Double Eleven – the Singles Day Festival on November 11, is a global shopping event initiated by Alibaba and adopted by other e-commerce platforms and retailers in China. Another major annual shopping festival in China is 618, taking place on June 18. Consumers can expect the largest discounts of the year during Double Eleven, while businesses expect a significant portion of annual revenues from this shopping festival sale.
Klosek: Regarding the CE and appliances retail consumer in China – what buying behaviors did you see as most prominent before the pandemic – and how have those behaviors been impacted, or changed, during the pandemic?
Xiang Zhi: Due to the rapid development of Internet access, mobile payment and logistical convenience, online sales of CE and home appliances had gradually become an important channel in China. The proportion of online sales in the overall retail sales of the home appliances market reached approx. 40 percent in 2020. In the same year, the pandemic was the accelerator of the online shopping channel and influenced changes in some consumers’ behavior.
Firstly, online shopping is not limited to young people anymore; some buyers who were not interested previously in e-commerce had to participate in online shopping under the pressures of the pandemic. The ongoing pandemic has continued to nurture and reinforce consumers’ online shopping habits. Although most parts of China are back to normal life, online shopping habits have continued. And after the outbreak, manufacturers, retailers and consumers are more actively embracing online channels. In the past, some consumers preferred to touch and experience home appliances in the physical store before purchasing; now, e-commerce platforms actively utilize new technologies to enhance the online shopping experience, such as 3D animations and AI presentations which provide consumers with a similar “high-touch” experience. Thus, offline shopping still plays an important part in people’s lives, but is not a must anymore.
Secondly, the pandemic has increased people’s health awareness. Consumers more and more value the multi-functionality of home appliances, such as antiseptic and disinfection features in air-conditioners.
Thirdly, as the pandemic has triggered economic recession and rises in unemployment in many countries, people have tended to save money instead of spending it. In China retail sales recovered from the pandemic in the second half of 2020 and retail sales value increased by 4.6 percent in December.
Klosek: What is it about Chinese-manufactured CE and appliances and brands that have made these products so significant and impactful lately in the U.S. market – and to the American consumer?
Xiang Zhi: In modern society, where science and technology are evolving rapidly, continuous innovations are the epitome of brands’ global competitiveness. Across the entire industry, all-around innovation has become a general trend for the development of global brands, which increasingly pursue the notion of innovation throughout the whole life cycle of a product. With innovative and smart manufacturing, Chinese brands keep on rolling out many new, technologically advanced products to break the monopoly of their overseas counterparts.
Nowadays, the image of Chinese CE products and home appliances has evolved to high value for the price (great quality, high technology and at same time very affordable). Since technology development is getting faster and faster, consumers are willing to buy affordable products with high quality at the same time the newest technologies are introduced and will upgrade their products more frequently. Chinese products are getting more preferred and recognized. Chinese brands can fully leverage the opportunity to go global and align themselves with the advanced technologies and products their global rivals have to offer.
Klosek: What are some of the most exciting consumer retail purchasing trends (relating to CE and appliances) that are currently unique to China – and when could these trends reach the U.S.?
Xiang Zhi: Retailer Suning took over the Carrefour chain store in order to enlarge its offline store coverage. At the same time, Suning is able to integrate fresh products and non-electrical daily necessities to its portfolio.
Social e-commerce and live commerce are unique in consumer retail in China. In the first half of 2020, more than one million episodes of livestreaming related to home appliances were broadcast on the Internet, and more than 100 billion RMB in transaction value was generated.
Besides the influencers and KOLs (Key Opinion Leaders), a lot of large companies’ leaders and government officers are also actively engaged in live commerce to boost sales. For example, a livestream on Monday, June 1, 2020, hosted by the chairwoman and president of home appliances maker Gree Electric Appliances, Dong Mingzhu, generated total sales reaching 6.54 billion yuan ($918 million).
Klosek: Why is CE China an important showcase to spotlight Chinese CE and appliances for the world market?
Xiang Zhi: CE China – a global IFA event – offers companies exhibition opportunities to showcase their innovations and products to the Chinese consumers right after the IFA exhibition in Berlin. At the same time, the show is an outstanding platform for brands which are looking for access to the Chinese market.
Following the IFA concept, CE China is based on a comprehensive partnership with the leading retail partners and has evolved into a valuable meeting place for consumer electronics and home appliances in China and Pan-Asia. Further, IFA Retail University is a groundbreaking tool at CE China, providing international brands with maximum attention from major retailers like Suning and Alibaba in China.
CE China received strong support from the Guangzhou government and industrial associations. An official German Pavilion, supported by German Federal Ministry of Economic Affairs and Energy, will combine the best of “Made in Germany” under the roof of CE China.
CE China is accompanied by the extraordinary tech convention CE Summit, which is hosted by one of the most influential global media houses, IDG Asia.