1、Explore the future of e-commerce and possibilities for your businessE-Commerce Mega Trends to Watch The information provided in this document does not,and is not intended to,constitute legal advice;instead,this information is for general informational purposes only.This information may not constitut

2、e the most up-to-date legal or other information.Readers of this information should contact their own advisor to obtain advice with respect to any particular legal matter.All liability with respect to actions taken or not taken based on the contents of this document are hereby expressly disclaimed.T

3、he content in this document is provided“as is”;no representations are made that the content is error-free.The world changed for both good and bad in 2020.The digital transformation of economies is taking shape and,in turn,changes how consumers are purchasing goods,the interaction of companies,and ho

4、w businesses are structured.Moreover,new data flows enable countries and companies alike to increase operational efficiency,improve living standards in cities,and provide better access to public services.Although the COVID-19 continues to spread globally and brings uncertainty and instability to the

5、 international landscape,Chinas economy continues to recover from the pandemic,realizing an 18.3%growth in Gross Domestic Product(GDP)in 2021 Q1 compared with 2020 Q1.Given the potential of the population and economic development,China is in position to become an essential part of the worlds economy

6、.According to the China Internet Network Information Center,as of December 2020,the number of Chinese internet users had reached 989 million,and the internet penetration rate had reached 70.4%2.With such a vast number of consumers coming online and reinventing digital life,the power of the internet

7、can influence the course of development for any trend.No region better illustrates the emergence of digital transformation than China.Megatrends are which create a global impact across multiple countries.Successfully identifying,analyzing,and acting on megatrends is essential for success in consumer

8、 markets.The world is changing quickly,and it is increasingly challenging to keep up with competitors as technology spurs both the rate of and access to innovation.During this change,it is difficult for companies to understand why industries are evolving in the way they are today,much less predict h

9、ow they will develop into the future.Megatrend analysis allows companies to build a proactive,long-term strategy rather than reactive,making sense of where they stand today and ensuring they have a plan to remain relevant moving forward.This Digital Megatrends in China White Paper highlights the sev

10、en most significant digital-relevant megatrends occurring in China.The White Paper incorporates sub-trend analysis under each megatrend,global assessments in terms of the trend development in other regions around the globe,and implications for the logistics industry.Where Are We?Why Is China Worth W

11、atching?What Are Megatrends?Source:1.National Bureau of Statistics of China;2.The 47th China Statistical Report on Internet Development published by the China Internet Network Information Center in February 2021 02EXECUTIVE SUMMARYE-Commerce Mega Trends to Watch*Since the relevant data/research on C

12、hina of this paper is solely based on and associated with Chinese mainland,for the benefit of this paper China refers only to the territory of Chinese mainland21What Are The Seven Most Significant Digital Megatrends In China?Experience More in China means exploring new concepts,business models,and l

13、ifestyles.Consumers are increasingly tech-savvy and looking for a unique shopping experience and products and increasingly prefer to spend money on experiences over acquiring things,especially in developed markets.Shopping Reinvented reflects how economic and technological shifts have rewritten the

14、shopper journey holistically.Today,shopping is a journey whose purpose is not just buying but relationship building.Consumers are redefining shopping because they expect brands/businesses/retailers to satisfy their needs and values by offering a unique,convenient,and technologically advanced experie

15、nce.Smart Cities and Smart Homes refer to the interconnectedness of things and products.Homes manufactured smarter are highly customized to the homeowners preferences,with real-time feedback/adjustments to the external environment,connection to a central hub,or management of devices.Connected Consum

16、ers use various devices and interfaces to connect to the internet to interact with digital content,services,and experiences.This digital connectivity has altered all aspects of life.Staying relevant has never been more challenging for businesses,given the rapid innovation driven by this widespread c

17、onnectivity and related technologies.Shifting Market Frontiers As some areas of the globe become over-farmed,over-populated,or otherwise reach their maximum potential,others gain distinction for their unexploited potential.Sharing Economy The increasing presence of shared products or service models

18、is gaining popularity among consumers.It is increasingly important to consumers to access an item and not necessarily own a personal version of it,driving a sharing economy and threatening direct ownership.Buying Time Time is increasingly a crucial commodity that more people are willing to buy(or sp

19、end to retain).About more than just convenience,it is also about outsourcing tasks.03EXECUTIVE SUMMARYE-Commerce Mega Trends to Watch04CONTENTSDigital Megatrends Deep Dive 05Shopping Reinvented 13Connected Consumers 27Experience More 06Smart Cities and Smart Homes 20Sharing Economy 40Summary 51Shift

20、ing Market Frontiers 34Buying Time 45E-Commerce Mega Trends to WatchReady to dive deep with us?Digital transformation is not just for the big players.It can happen anywhere,at any time,and to anyone in China.In this section,we invite you to explore how digital transformation shapes the business worl

21、d in China.We will walk you through each of the seven megatrends in the following steps:Overview and drivers Sub-trends Regional aspects Implications for the logistics industry0501 Experience MoreChina is exploring new concepts,business models,and lifestyles.In addition to products,consumers are als

22、o looking for an experience that engages them more physically and mentally.KEY DRIVERS BEHIND THE MEGATREND:Chinas extraordinary economic boom has accelerated the pace of urbanization.According to the Seventh Population Census conducted in 2020,about 63.9%1 of Chinas total population lives in cities

23、.Rising urbanization has increased consumers access to products and services with enhanced brand interaction.Meanwhile,with the satisfaction of basic needs,Chinese consumers increasingly seek to fulfill and diversify their leisure time.Expenditure on leisure and recreation signals consumer intent to

24、 experience more.The growth in spending on leisure and recreation from 2015 to 2019 in China(+10.6%2)dramatically exceeds that of global(+3.8%2).As we see from the market size of the travel industry,China has recorded 8.7%1 CAGR growth from 2015 to 2019.The travel industrys substantial growth has gi

25、ven consumers more choices for new experiences in domestic and international scenic spots.+5.8percentage pointIncrease of urbanization rate from 2015 to 2020 in ChinaCAGR of the travel industrys market size from 2015 to 2019 in ChinaCAGR of expenditure on leisure and recreation from 2015 to 2019 in

26、China+10.6%+8.7%Source:1.National Bureau of Statistics of China;2.Euromonitor research based on desk research and trade interviews.06Innovative CommunicationsCorporations utilize new marketing techniques such as digital celebrities to bond with consumers.Experience More means that consumers seek a c

27、omprehensive experience throughout the purchasing journey.Engage virtually,immersive experience,and innovation communication are the three most essential sub-trends identified under Experience More.07EXPERIENCE MORE|SUB-TRENDSEngage VirtuallyBrands engage consumers virtually in an online environment

28、 with approaches such as live streaming.Immersive ExperienceTechnology-enhanced experience has captured the attention of multiple industries,such as travel,real estate,and game.Brands leverage new technologies,e.g.,Virtual Reality,to provide a more immersive experience in shopping,travel,and gaming.

29、E-Commerce Mega Trends to WatchSource:1.The 47th China Statistical Report on Internet Development published by the China Internet Network Information Center in February 2021;2.East Money News;3.Euromonitor research based on desk research and trade interviews.Tangible goods will always be in demand.H

30、owever,the thrill of experiencing something is beginning to outweigh the traditional buying cycle ending in purchasing goods.To provide a seamless consumer service experience aside from conventional offline engagement,Chinese brands also try to engage consumers virtually in an online environment.08E

31、NGAGE VIRTUALLY1WHAT DOES ENGAGE VIRTUALLY LOOK LIKE IN CHINA?Virtual engagement is growing in China as leading e-commerce and social media players make heavy investments.Live-streaming e-commerce,dedicated online chat groups,and customized virtual assistants are the three most trending ways compani

32、es engage with customers.Live-streaming is a new way of direct,in-time interaction and an increasingly crucial sales channel in China.In 2016,live-streaming was first COVID-19 has further fueled Chinas live-streaming business since 2020.With the lockdown keeping consumers at home,live-streaming beca

33、me a way to shop.As of December 2020,the number of live-streaming users in China reached 617 million1,accounting for 62.4%1 of the entire internet users.Among them,the number of live-streaming sales users reached 388 million1,accounting for 39.2%of the total internet users.E-commerce live-streaming

34、GMV in China reached 443.8 billion RMB in 2019 and was estimated to reach 971.2 billion RMB2 in 2020,representing a 119%y-o-y growth.Live-streaming is an efficient tool for connecting consumers and brands and enhancing the shopping experience where popular and trusted KOLs and celebrities directly i

35、nteract with consumers as facilitators.Meanwhile,dedicated online chat groups on social media have become essential for brands to attract and manage private customer traffic.Brands/retailers consider online chat groups an effective way to communicate with consumers directly.Some brands have introduc

36、ed online chat groups where brand staff can promote products and collect customer feedback in the group chat.Brands consider online chat groups vital to interact with customers directly and benefit products future innovation.E-commerce platforms provide consumers with tailored promotion information

37、and Q&A service by virtual AI assistants.Customers automatic product recommendation messages based on previous shopping history can be analysed and sent to customers by virtual assistants,which improves customer stickiness for brands.617 million1Of live-streaming users as of Dec 2020+57million1As co

38、mpared with Mar 2020388 million1Of live-streaming e-commerce users as of Dec 2020+123million1As compared with Mar 2020Live-streaming E-commerce GMV in China ,Billion RMB 19.6135.4443.8971.2202004006008001,00020020FEXPERIENCE MORE|SUB-TREND DEEP DIVEE-Commerce Mega Trends to Watch2Source:1

39、.Ministry of Industry and Information Technology of China;2.China Academy of Information and Communications Technology.Using technology as an enabler,brands strive to provide an immersive experience that appeals to the senses more.The pandemic has re-orientated the way that consumers shop,including

40、how they discover and eventually purchase.More businesses experimented with immersive virtual experiences during the crisis,using this approach to drive engagement with consumers who were spending more time at home.Virtual experiences will become more commonplace in the digital-first,post-pandemic e

41、ra.09IMMERSIVE EXPERIENCE2WHAT DOES AN IMMERSIVE EXPERIENCE LOOK LIKE IN CHINA?792,00015G base stations in China as of the end of Feb 2021+74,0001As compared with the end of Dec 2020260million15G terminal connections in China as of the end of Feb 2021+60million1As compared with the end of Dec 2020Di

42、rect/Indirect Economic Yield of 5G in China ,Trillion RMB 24843,3006,3001,2006,30010,60004,0008,00012,00020202025E2030EIndirect Economic YieldDirect Economic YieldVR technology is introduced in multiple industries in China to enhance consumers experiences,including FMCG,housing,gaming,and even exhib

43、itions/fairs.As the worlds leading 5G technology rolls out in China,VR allows e-commerce customers to preview products or experience services even at home and provides a better experience.For example,by attending a live-streaming,viewers could view products up close and from different angles around

44、the store simply through switching camera angles.It is an immersive interactive experience that can make users feel as if they are handling the products.The tourism and real estate industries are also becoming significant users.Travel experiences will be increasingly connected to technology,offering

45、 more visual and convenient travel guidance throughout.For example,VR+Tourism enables consumers to experience local scenery virtually before designing or selecting travel plans.VR technology is also deployed more widely in diverse commercial scenarios for an improved experience,e.g.,gaming,exhibitio

46、ns and fairs.The games industry has been leading in user-experience innovation.As a result,demand in China has expanded for VR/AR game headsets and software for in-home use and VR game centers.China is also rethinking transforming physical events into virtual exhibitions and fairs.New exhibition for

47、mats of a virtual art show,virtual versions of traditional museums,and commercial fairs on the cloud all provide experiential transformation.EXPERIENCE MORE|SUB-TREND DEEP DIVEE-Commerce Mega Trends to WatchSource:1.IQIYI-”Virtual Idol Observation Report 2019”An increasing number of companies manage

48、 customer communications using various techniques to provide added experiences and target consumers and audiences.10INNOVATIVE COMMUNICATION3WHAT DOES INNOVATIVE COMMUNICATION LOOK LIKE IN CHINA?User Base of the Animated Industry in China ,Million1Brands from the beauty,apparel,and packaged food ind

49、ustries consistently make efforts in communications innovation.Virtual endorsers,co-branding,and KOL promotion are the top three popular ways brands get connected with their target customers.Having been born and growing up in a digital era,the younger generation holds different opinions regarding vi

50、rtual and real-life.Virtual endorsers are taking on the traditional roles held by people on social media.In 2019,the animated industry in China attracted an audience of 390 million1,of which 100 million1 were core users.Brands find that working with virtual celebrities is an effective way to connect

51、 with younger consumers.Virtual idols,as characterized by more distinctive personalities and looks,are looked up to and trusted by young consumers and have become an efficient communication tool.As Gen Zs purchase power and demand for more interactive and immersive entertainment experiences grow,vir

52、tual influencers role in the media will likely continue to expand.Co-branding has also rapidly developed in China,especially between local and international brands,to create buzz.The cooperation between two seemingly unrelated brands effectively attracts attention.Famous IPs,traditional cultures,int

53、eresting presentation forms and other kinds of innovation are gaining increasing attention.With the internet changing traditional social circles,KOL marketing is becoming extremely important in China.Brands consider KOLs an essential voice to consumers and now consider KOL promotion a standard part

54、of marketing communications.Apart from KOLs with the biggest follower base,2020 also saw more brands recognizing the value of micro-KOLs.Also called KOCs(Key Opinion Customers),they convey greater authenticity and seem more“real”to audiences.EXPERIENCE MORE|SUB-TREND DEEP DIVE908000100200

55、300400201720182019AudienceCore UserE-Commerce Mega Trends to WatchSource:Euromonitor research based on desk research and trade interviews.11EXPERIENCE MORE|REGIONAL ASPECTSHOW DOES THIS MEGATREND VARY FROM REGION TO REGION?Regional expenditure on travel,leisure,and recreation per capita 2020 in USD

56、APACEUROPENORTH AMERICALATIN AMERICAMIDDLE EAST AND AFRICAThe rapid growth of e-commerce facilitates virtual engagement such as live-streaming sales to support seller-to-buyer interactions.Influenced by Japan,VR games and technology also spread quickly into the leisure space in exhibitions and game

57、centers.Meanwhile,ACG(animation,comic,game)culture is also well-developed.Like APAC,the Experience More trend is also observed in Europe and showing great potential.Leading retailers and brands have started to offer live video shopping services.Some brands have recreated the in-store experience virt

58、ually.However,a virtual endorser is rare,but consumer communications through KOLs and co-branding have become a common practice by brands.Engaging virtually manifests itself primarily in AI customer service for self-service and Q&A,In addition,AR/VR technology is highly adopted in retailing,such as

59、virtual fitting rooms and AR makeup mirrors.However,a virtual endorser is rare,but consumer communications through KOLs and co-branding have become a common practice by brands.Minimal cases like an AI-driven online experience for beauty products are observed.The trend is still at a very early stage.

60、Only a niche trend is seen in tourism,such as virtual safari campaign or a virtual museum visit in South Africa.Experience More is a prevalent trend in relatively developed regions such as North America and Europe but is more offline-driven.E-commerce and technology-driven experience seem to be rapi

61、dly rising in China and APAC.175.4APAC(China excluded)74.8Middle East and Africa4,554.7 North America328.3Latin America 1,556.3Europe475.0Chinese mainlandAPAC(China excluded)EuropeNorth AmericaLatin AmericaMiddle East and AfricaChinese mainlandE-Commerce Mega Trends to Watch12EXPERIENCE MORE|IMPLICA

62、TIONSExperience More will continue making a substantial impact on e-commerce development in China and the world,especially in economically developed regions.IMPLICATIONS FOR THE LOGISTICS INDUSTRYCHINAGLOBALTools that allow brands to interact with consumers in an online environment are upgraded cont

63、inually for an enhanced and technologically advanced experience.At the same time,more brands will use the power of virtual tools proven to be highly effective in todays commercial space in China,such as live-streaming.Despite a relatively early development stage,the world does witness an increasing

64、adoption of digital experience enhancement,such as 3D online shops and AI-powered recommendations to help brands connect with consumers,especially in APAC,Europe,and North America.Technology such as VR/AR will extend its applications to more scenarios.More responsive logistics system with a leveled-

65、up capability1Flexible and customizable delivery for an enhanced experience2The rise of live-streaming necessitates a more responsive logistics system that can accommodate a significant number of orders in a short period to ensure smooth e-commerce business operations.When shopping online,consumers

66、are seeking a seamless experience where deliveries adapt to their schedules.Increasing delivery flexibility to fulfill consumer demand will become commonplace.E-Commerce Mega Trends to Watch02 Shopping ReinventedBroad internet penetration and a highly developed digital space redefine the consumer jo

67、urney in China.As a result,most consumers in China are enjoying a convenient and technologically advanced shopping experience.KEY DRIVERS BEHIND THE MEGATREND:Consumers in China are becoming more tech-savvy and open to a digital-driven shopping journey and a more elevated shopping experience.57.9%1

68、of the Chinese population bought an item or service through mobile at least weekly in 2020.The e-commerce channels growth reinvents consumer shopping habits from conventionally offline to online,attracting consumers by its product options and convenience.The e-commerce retail value in China witnesse

69、d a 25.9%1 CAGR growth from 2016 to 2020.With the penetration of mobile-end payment,the number of e-payment users reached 805 million1 by mid-2020.The rapid increase of e-payment penetration has diminished using cash and diverts shopping to being highly mobile-centric.57.9%Of the Chinese population

70、bought an item or service through mobile at least weekly,2020Users of e-payment in China,mid-2020CAGR of e-commerce retail value from 2016 to 2020 in China+25.9%805MSource:1.Euromonitor research based on desk research and trade interviews.13Shopping Reinvented means consumers are switching from conv

71、entionally offline to online,driven by the convenience and quality of online purchasing.A seamless shopping experience,omni-channel marketing,and offline shopping upgrade are the three most important sub-trends identified under Shopping Reinvented.14SHOPPING REINVENTED|SUB-TRENDSOffline Shopping Upg

72、radeTraditional offline outlets embrace digital transformation,such as AI assistants,for better capability and enhanced experience.Seamless Shopping ExperienceOnline and offline shopping channels work together to provide consumers with an effortless cross-channel shopping journey.Omni-channel Market

73、ingBrands use a combined digital-physical syndicated marketing ecosystem where channels work together to create a unified message.E-Commerce Mega Trends to WatchOnline and offline are no longer separate channels.Consumers can obtain offline products and services seamlessly online and the other way a

74、round to enjoy an effortless shopping experience across channels.15SEAMLESS SHOPPING EXPERIENCE1WHAT DOES A SEAMLESS SHOPPING EXPERIENCE LOOK LIKE IN CHINA?Driven by the developed e-commerce environment and changing consumer shopping habits,traditional retailing channels no longer develop separately

75、.Online and offline experiences can be complementary.O2O operations,new omni-channel retailing,and smart vending machines are the three most influential sub-trends.Business formats covered by O2O operations are continually evolving in China.While online has become a vital traffic portal for offline

76、business,multiple industries have adopted the online to offline operations model to enhance efficient customer management.With the O2O trend flourishing in China,omni-channel retailing driven by e-commerce platforms offline expansion becomes a trend.Chinese e-commerce giants apply their technology i

77、n data-driven operations systems to offline stores to build a smooth link between online and offline.The“new retail”concept now has become a reality in China.Under the“new retail”concept,offline stores operate on cutting-edge innovations which allow customers to scan barcodes for personalized recipe

78、 suggestions and information on everything available through the stores mobile app.The offline stores also double as a distribution center that delivers fresh produce to customers within about 30 minutes.Companies strive to provide customers with greater convenience by making offline stores smarter.

79、One good example is convenience stores smart vending machine on which customers can select items and purchase via QR code.The traditional vending machine is upgraded with an interactive touch screen,digital payment system,and multi-temperature storage space.The future of grocery retailing in China w

80、ill realize more comprehensive service offerings and leverage big data to carry out precise online marketing and effective community operations.SHOPPING REINVENTED|SUB-TREND DEEP DIVEO2O Operations ModelNew Omni-channel Retailing Operations ModelOrderProducts/ServiceConsumers order online,and consum

81、ption happens in offline stores.MerchantsConsumer through APPsSupplements offline traffic when consumers order online for in-store inventories.Offline stores encourage consumers to download the APP/scan QR code to persuade consumers to shop online.Brands Online Store/AppBrands Offline StoreReciproca

82、l channel benefitE-Commerce Mega Trends to WatchSource:1.2020 China Digital Marketing Trends released by Miaozhen Systems.A rising number of brands start to build a marketing ecosystem using traditional and emerging media,e.g.,CRM,offline events,and social media.New technologies are introduced to co

83、nnect different marketing channels.16OMNI-CHANNEL MARKETING2WHAT DOES OMNI-CHANNEL MARKETING LOOK LIKE IN CHINA?A complete channel marketing ecosystem,AR facilitated interaction,and experience centers/stores have become the three most trending ways that brands adapt to attract and retain customers.M

84、ost brands and advertisers consider the complete channel marketing ecosystem to be effective.About 93%1 of advertisers recognize that omni-channel advertising delivers better results than a single channel.Brands increasingly adopt a holistic approach towards marketing,incorporating digital and offli

85、ne,and before sales to after-sales.Emerging online brands,such as beauty brands and coffee brands,have been significantly increasing offline marketing efforts,achieving a marketing strategy that covers not only their online flagship stores,social media,but also offline retailing and offline flagship

86、 stores.To make linking online and offline fun and effortless,brands introduce AR-facilitated tools.Consumers scan signs in offline events and get connected to online marketing pages.For example,digital players,such as e-commerce platforms and social media,build experience centers/stores to fill the

87、 gap of offline touchpoints and achieve fullcoverage of consumers shopping journeys.Hence,in China,a cohesive brand image across different media/channels is vital for brands to conduct an effective marketing campaign.SHOPPING REINVENTED|SUB-TREND DEEP DIVE93%1Of advertisers in China consider that om

88、ni-channel advertising delivers better results than a single channel.59%1Of business clients in China select omni-channel execution as one of the top six elements to improve the client experience.Holistic Marketing Channel CoverageOnline Flagship StoresOfficial Social Media AccountOffline Flagship S

89、toresOffline RetailingE-Commerce Mega Trends to WatchSource:1.Euromonitor Passport Database.For many people,shopping in an offline store is not enjoyable,given the traffic congestion and crowds.If they can find ways to avoid it,they will.Therefore,offline stores are undergoing a digital transformati

90、on for an enhanced shopping experience and operations efficiency.17OFFLINE SHOPPING UPGRADE3WHAT DOES OFFLINE SHOPPING UPGRADE LOOK LIKE IN CHINA?Smart retailing stores,the cloud shelf,and AR makeup mirrors make shopping in offline stores more exciting for customers.Store-based retailing value accou

91、nted for 76.7%1 of the total retailing value in China in 2019 and continues to lose share.Though people might think that online sales is the channel of the future,brands still believe that the shopping experience in a physical store is irreplaceable.Therefore,brands turn to new technologies to impro

92、ve store efficiency and the shopping experience to attract customers.Offline is still a prominent channel to build brand image.Offline retail stores undergo a digital transformation based on big data,artificial intelligence,and other technologies.Furthermore,cloud shelves and AR makeup mirrors are t

93、wo common elements that brands use to upgrade their offline stores.Brands place cloud shelves in stores so consumers can view available SKUs with detailed information.Cloud shelves are usually a virtual display of products with detailed information and online shopping links.Customers can purchase di

94、rectly via cloud shelves without walking around to find the product they want.Cloud shelves also have no shelf space limitations and so are welcomed by companies with considerable storage needs.AR makeup mirrors are popular among color cosmetics see the effect on brands and retailers.Customers can s

95、elect products and directly their faces without testing lipsticks,foundations,eye shadows,and other cosmetics.Digital transformation will facilitate more efficient and professional interactions with consumers to improve product understanding and the pre-purchase shopping experience,eventually leadin

96、g to a purchase.SHOPPING REINVENTED|SUB-TREND DEEP DIVERetailing Value in China1,Billion RMB82.8%79.4%76.7%72.0%17.2%20.6%23.3%28.0%0%50%100%201720182019 2020E Store-based RetailingNon-Store RetailingE-Commerce Mega Trends to WatchShopping Reinvented is a more significant trend in regions where e-co

97、mmerce and e-payment have high penetration.Europe and North America are at the top due to strong e-commerce players embracing digital transformation.However,the APAC region is influenced by China,where leading e-commerce players are eager to expand their networks towards southeast Asia.Source:Euromo

98、nitor research based on desk research and trade interviews.18SHOPPING REINVENTED|REGIONAL ASPECTSHOW DOES THIS MEGATREND VARY FROM REGION TO REGION?Regional proportion of e-commerce retail revenue to total retailing 2020APACEUROPENORTH AMERICALATIN AMERICAMIDDLE EAST AND AFRICAThere is a growing tre

99、nd of players enabling merchants to set up online stores easily,especially in Southeast Asia.Rising brands focus their marketing on official websites and take an integrated approach to customer engagement across different channels.The seamless shopping experience is adopted by many major supermarket

100、s in Europe.Most color cosmetics brands have made a virtual try-on service available using AR at stores.Marketing becomes more digital and smarter.AI technologies is usually applied to produce personalized digital information for consumers.An increasing number of brands adopt online order and offlin

101、e pick-up options.Major retailers commonly adopt in-store technology,with some of retailers allowing store associates to complete transactions from anywhere on the showroom floor.Marketing efforts are increasingly holistic.Online videos and personalized associate services become more vital than befo

102、re.Related innovation is noticed.Some supermarkets now allows customers to pay for products by scanning QR codes with the supermarket APP in-store.Leading beauty and apparel brands conduct marketing activities across channels with a unified marketing message.The trend is slowly gaining momentum and

103、is supported by retailbeauty and apparel brands also conduct marketing activities across channels with a unified marketing message.10.3%2.7%19.7%8.8%12.8%27.3%APAC(China excluded)EuropeNorth AmericaLatin AmericaMiddle East and AfricaChinese mainlandE-Commerce Mega Trends to WatchAPAC(China excluded)

104、Middle East and AfricaNorth AmericaLatin America EuropeChinese mainland19SHOPPING REINVENTED|IMPLICATIONSShopping Reinvented is prominent in China and facilitated by e-commerce development,while offline digital reform is also taking place worldwide.IMPLICATIONS FOR THE LOGISTICS INDUSTRYCHINAGLOBALO

105、nline to offline integration in marketing and retailing is a relatively mature practice in China that provides consumers with a seamless shopping experience.At the same time,technologies that upgrade the offline shopping journey are broadening their coverage.Online and offline are still mostly disco

106、nnected channels at the global level.However,facilitated by the prolonged pandemic,an increasing number of brands embrace digital transformation,especially in regions where e-commerce is gaining presence,such as North America,Europe,and APAC.Establish strategic collaboration with e-commerce players.

107、1Integrated system for online and offline inventory.2E-commerce is gaining prominence in retailing.Strategic collaboration with leading e-commerce players in supply chain and data will help guarantee more sustainable growth for the logistics industry.Under an increasingly integrated retailing system

108、,the logistics industry also expects to have a more integrated supply system that realizes data sharing.E-Commerce Mega Trends to Watch03 Smart Cities and Smart HomesTechnology development supports the construction of information infrastructure in China,building a more intelligent living environment

109、(in-home,at work,and others)for its citizens.KEY DRIVERS BEHIND THE MEGATREND:An expanding 5G user base,popularization of controlling devices,and investment in AI technology drive smart cities and homes.5G is the bridge connecting the physical and digital world,enabling improved efficiency and the s

110、ustainable development of the physical world.The number of 5G users expects to see a 200.0%1 growth from 2020 to 2025 due to Chinas rapid pace with 5G technology,creating enormous opportunities for smart home players.In addition,the popularization of controlling devices such as smart speakers and sm

111、art TVs has been a catalyst to Chinese consumers embracing connected appliances in the home.The retail value of wireless speakers has seen a 62.0%CAGR2 growth from 2016 to 2020.Furthermore,autonomous and personalized solutions highly rely on AI technology.Growing AI technology in China has stimulate

112、d smart services and appliances.+200.0%Anticipated increase of 5G users in China from 2020 to 2025Direct investment in AI technology in China during the first half of 2020CAGR of retail value of wireless speakers from 2016 to 2020 in China+62.0%40.1Source:1.“5G Economic and Social Impact White Paper

113、”published by China Academy of Information and Communications Technology;2.Euromonitor Passport Database.20million RMBSmart Cities and Smart Homes arent just a dream of the future.Technologies are transforming traditional elements of city life-like commuting,studying,and making a payment.Smart life,

114、education technology,and contactless delivery are the three most important sub-trends identified under Smart Cities and Smart Homes.21SMART CITIES AND SMART HOMES|SUB-TRENDSContactless DeliveryPackages,food,and other deliveries are without face-to-face interaction.Smart LifeEssential life services s

115、uch as payments and transportation have become increasingly digitized.Education TechnologyNew technology enables online education to be more interactive,customized,and intelligent,resulting in comprehensive online education coverage.E-Commerce Mega Trends to Watch854 million1Of online payment users

116、in China as of Dec 2020+86million1As compared with Mar 2020853million1Of mobile online payment users in China as of Dec 2020+87million1As compared with Mar 2020215million1Of online medical service users in China as of Dec 202021.7%1Of total internet users using online medical services in ChinaEssent

117、ial life services,including finance,transportation,health care,and government services are becoming more digitized for higher efficiency and personalized solutions.Smart Life is now everywhere in China.22SMART LIFE1WHAT DOES SMART LIFE LOOK LIKE IN CHINA?Long before COVID-19 impacted our lives,China

118、 had already become the stronghold of mobile payment.As of December 2020,the number of online payment users in China had reached 854 million1,accounting for 86.4%1 of the total number of internet users.The number of mobile online payment users reached 853 million1,accounting for 86.5%1 of mobile int

119、ernet users.Since mobile payment is widely accepted in China,leading platforms extend their business coverage and provide various services online to build comprehensive financial services platforms.They continue to build broader product portfolios and introduce new technology-enhanced initiatives to

120、 the market.However,as regulations strengthen,new platforms are anticipated to cooperate with traditional financial systems further as a technology supplier.When it comes to travel,tickets for public transportation,such as the metro and bus,and scenic spots have also been digitized into QR code or I

121、D card scanning forms.Apart from financial and travel activities,Chinese consumers are now enjoying the convenience of seeing a doctor online.As of December 2020,the number of online medical service users reached 215 million,accounting for 21.7%of the total internet users in China.The government con

122、tinues to encourage the expansion of online medical services and promotes the coordinated development of online and offline medical services.As of the end of October 2020,China had more than 5,500 hospitals that can provide online medical services.Online Health Care APPs that provide health care ser

123、vices,including consultations,hospital reservations,online prescriptions,and medicine sales and delivery,are also booming in China.SMART CITIES AND SMART HOMES|SUB-TREND DEEP DIVESource:1.The 47th China Statistical Report on Internet Development published by China Internet Network Information Centre

124、 in February 2021.E-Commerce Mega Trends to WatchThe online education industry has become a battleground for technology giants.New technology enables online education to be more interactive,customized,and intelligent.As a result,both supply and demand of online education have rapidly developed acros

125、s categories and age groups.23EDUCATION TECHNOLOGY2WHAT DOES EDUCATION TECHNOLOGY LOOK LIKE IN CHINA?Online course platforms,questions database/search,and intelligent education facilitator are the three most influential sub-trends changing peoples educational habits in China.Compared with traditiona

126、l offline education models,online education has outstanding advantages.Online platforms provide structured courses in video recordings and live-streaming and usually include AI-facilitated interaction to improve user engagement.As of December 2020,the number of online education users in China reache

127、d 342 million1,accounting for 34.6%1 internet users.At the same time,the number of mobile-end online education users reached 341 million1.With the progress in the prevention and control of the COVID-19 epidemic,the number of online education users dropped compared with March 2020 but still increased

128、 by 109 million1 compared with June 2019.Furthermore,platforms using Optical Character Recognition(OCR)to provide a question search or review service allow users to scan a question to find the answer steps in the platforms database or scan their answers to get grading.The technology can also facilit

129、ate teachers work,help in curriculum design,homework assignments,homework review/grading,and track students progress.SMART CITIES AND SMART HOMES|SUB-TREND DEEP DIVESource:1.The 47th China Statistical Report on Internet Development published by China Internet Network Information Centre in February 2

130、021.2:www100EC.cn.342 million1Of online education users in China as of Dec 2020+109million1As compared with June 2019341million1Of mobile-end online education users in China as of Dec 2020+123million1As compared with Mar 2020Online Education Market Size in China2,Billion RMB156.5200.3251.8322.6400.3

131、00500200192020E-Commerce Mega Trends to WatchMarket Size of Food Delivery in China1,Billion RMB The rocket-fast food delivery service in China has saved many small restaurants.Technologies including delivery robots,smart food lockers,and other contactless delivery have been evo

132、lving amid social distancing instead of human interaction during the delivery process.24CONTACTLESS DELIVERY3WHAT DOES CONTACTLESS DELIVERY LOOK LIKE IN CHINA?Chinas delivery service platforms are evolving from food lockers and parcel lockers to delivery robots for contactless delivery.According to

133、Meituan Research,Chinas food delivery market size reached 653.6 billion1 RMB in 2019.In such a vast market that relies on delivery,contactless food lockers first appeared to improve delivery efficiency and then gained greater attention because of COVID-19 after Chinas National Health Commission reco

134、mmended in February 2020 that deliveries limit contact.Leading food delivery platforms have introduced smart food delivery lockers to improve efficiency and support the steady growth of Chinas food delivery market amid the COVID-19.With food lockers,customers can order remotely mostly on their mobil

135、e phones and restaurant employees seal the meals in bags and put them in a special locker for pick-up without human contact.In parcel deliveries that previously would have involved one person handing a package to the other,the courier now puts the parcel in a smart locker for recipients to pick up.R

136、ecipients collect the package with a pre-sent code and sign off on the delivery.The market for contactless delivery to a single consumer will also continue to expand.In addition,contactless delivery for community group purchase of fresh foods is also set to develop.The future of contactless delivery

137、 is promising in China.Delivery Robots are introduced and deployed to conduct in-building deliveries to avoid contact between the delivery person and the consumer.Restaurants,hotels,office buildings,hospitals,internet cafs,KTVs,and shopping malls have used indoor autonomous robots,and have vigorousl

138、y promoted them to prevent and control the COVID-19.For example,hotel delivery robots are replacing redundant,low value-added human work such as delivering food,mail,and amenities ordered by hotel guests.However,smart lockers have not yet formed a mature profit model,which needs to be explored furth

139、er.SMART CITIES AND SMART HOMES|SUB-TREND DEEP DIVESource:1:Meituan Research with China Hospitality Association.2.Euromonitor research based on desk research and trade interview.125.8305.3469.2653.6020040060080020019E-Commerce Mega Trends to WatchMore technologically advanced regions are

140、undergoing a more robust trend of smart cities and smart homes.AI-enabled smart appliances power smart homes and have a higher penetration in more technologically developed areas.In addition,the prolonged pandemic has fostered an online-driven lifestyle,facilitating the development of online and con

141、tactless services worldwide.*Ownership of wireless speaker per 1000 capita=regional retail volume of wireless speakers/regional per thousand population25SMART CITIES AND SMART HOMES|REGIONAL ASPECTSHOW DOES THIS MEGATREND VARY FROM REGION TO REGION?Regional ownership of wireless speakers per 1000 ca

142、pita*APACEUROPENORTH AMERICALATIN AMERICAMIDDLE EAST AND AFRICAThe trend is reflected mainly in transportation and urban construction.For example,Singapore is testing autonomous public transport.COVID-19 has also upended education across the Asia Pacific.Online education Apps enable students to lear

143、n from home.Contactless delivery is also on the rise more delivery companies launched contactless delivery options.The trend is rising as many life services start to move online,such as online medical consultations and online car parking booking platforms.There is also a boom of online education-fro

144、m sports to the full education curriculum.Contactless delivery witnessed growing demand.Leading players have already established mature locker systems and more retailors are joining this field.Smart homes are prominent in this region.Consumers can operate different smart appliances of various brands

145、 on one single platform.Meanwhile,there are many emerging online education platformsfor customers to choose from.Driven by COVID-19,contactless delivery is rapidly developing.A leading smart locker provider even reaches 100-million deliveries by smart locker.Government and banking APPs are evolving

146、to provide more online services and alternative payments than only credit cards.Contactless delivery has also been realized mainly through placing parcels at an open pick-up point rather than in a locker.The trend is at a very early stage,but financial systems are on the rise.3.53.2153.313.152.836.5

147、APAC(China excluded)EuropeNorth AmericaLatin AmericaMiddle East and AfricaChinese mainlandE-Commerce Mega Trends to WatchAPAC(China excluded)Middle East and AfricaNorth AmericaLatin America EuropeChinese mainland26SMART CITIES AND SMART HOMES|IMPLICATIONSWhile the trend is still premature,the Chines

148、e are modernizing their lives to be smarter,especially in less developed regions.IMPLICATIONS FOR THE LOGISTICS INDUSTRYCHINAGLOBALMany life services and infrastructure are operating digitized in China,supported by the emergence of super APPs such as Alipay and established digital-driven lifestyles

149、among the population.Smart Cities and the Smart Homes is a stronger trend in more technologically developed regions such as North America and Europe.Nevertheless,the principal indication is the adoption of smart appliances at home.Smart Cities is still under development.Contactless delivery will bec

150、ome a new norm.1Digitized delivery service is in demand.2Contactless delivery is improving last-mile delivery efficiency and a service in increasing demand under the pandemic.Continuous innovations in smart delivery options such as robots and parcel lockers are essential to maintaining competitivene

151、ss.Consumers are expecting increasingly accurate parcel tracking and a delivery service easily ordered through a smartphone.These are all calling for a more digitized logistics system.E-Commerce Mega Trends to Watch04 Connected ConsumersFast-paced IT development and high internet penetration rates e

152、nable comprehensive connectivity among Chinese consumers.KEY DRIVERS BEHIND THE MEGATREND:Expanding the internet user base,forming online-centric social habits,and growing smartphone ownership drive connected consumers.Chinas population has developed communications and social habits based online,dem

153、onstrating unprecedented online connectivity.Increased internet penetration has enabled people to acquire information,communicate,and connect.According to Euromonitors Passport Database,86.4%1 of the Chinese population owned smartphones in 2020.Mobile internet has become a lifestyle for the Chinese

154、and a vital media to break physical boundaries between consumers and companies for seamless connectivity.+12.2Increase of population percentage using the internet in China from 2015 to 2020Smartphone possession in China,2020of the Chinese population visit or update social networking sites every day,

155、202056.6%86.4%Source:1.Euromonitor Passport Database.27percentage pointsConnected Consumers means that the individual,empowered customers are increasingly connected on the internet,creating and maintaining relationships virtually.Mobile-only,social commerce,and virtual community are the three most e

156、ssential sub-trends identified under Connected Consumers.28CONNECTED CONSUMERS|SUB-TRENDSVirtual CommunityPeople with similar interests gather online to share their opinions and findings on dedicated online media/platforms.Mobile-OnlyThe mobile phone becomes the only device that fulfills all the con

157、sumers daily needs.Social CommerceEmerging new e-commerce models leverage customers social networks to grow,such as group or community purchases.E-Commerce Mega Trends to WatchSource:1.Euromonitor Passport Database.In many places,if you leave the house without your wallet,youll be in a tough spot al

158、l day.However,you dont need a wallet in China,just your smartphone.Payments and life services are all performed through mobile phones,which has fostered a wallet-less lifestyle among the Chinese.Your mobile phone is the only thing needed to survive.29MOBILE-ONLY1WHAT DOES MOBILE-ONLY LOOK LIKE IN CH

159、INA?Smartphones are not only about making contactless payments in China.Super APPs,life-service platform APPs,and functional mobile APPs have fundamentally changed how Chinese people live,work,and play.Super APPs with multiple functions allow consumers to live(shop,chat,play,eat)with only a mobile p

160、hone and help users manage their lives by continuously extending their service scope.A broad smartphone user base supports the continuous growth of Super APPs.As the development of society,super APPs have become essential tools for living in China with various features,including transferring money,p

161、aying bills,booking tickets,and calling taxis.As customers are enjoying the convenience provided by these APPs,relevant consumer data in return become important resources.For example,super APPs provide advertisers with high-quality user data based on which marketers can define their target audience

162、according to demographic characteristics.In addition to 2C services,super APPs will provide traffic support for new business modules in the form of a platform in the future.Mobile APPs for life services also increase the functionality of mobiles.Users can enjoy different life services such as home s

163、ervice,recruitment,and second-hand sales with only one mobile APP.Service providers also aim to provide users a functional mobile APP on which users can manage essential life services,such as banking and currency exchange and other life services all on one APP.CONNECTED CONSUMERS|SUB-TREND DEEP DIVE

164、Possession of Smartphones in China1,%of households77.9%81.3%84.1%86.4%00.40.8201720182019 2020E E-Commerce Mega Trends to WatchSource:1.B 2020 Q3 Financial ReportVirtual communities connect people with similar interests,breaking physical boundaries.People increasingly communicate through online medi

165、a.Consumers are also crafting their self-identity in virtual communities.30VIRTUAL COMMUNITY2WHAT DOES MOBILE-ONLY LOOK LIKE IN CHINA?A virtual community is a group of people with similar interests and ideas connected over the internet.Lifestyle-sharing platforms,user-generated content platforms,and

166、 knowledge-sharing platforms are the three most significant types of virtual communities for Chinese consumers.Lifestyle-sharing platforms seem to be nothing new to many people.However,China is taking life-sharing platforms to a higher level.Chinese consumers do thorough pre-purchase research.Theref

167、ore,lifestyle-sharing platforms have become a new battleground for brands because brands find it easier to target their customers with shared interests and achieve sales on these platforms.Some lifestyle-sharing platforms have also embedded e-commerce functions to allow users to get commodities they

168、 like after seeing a post without switching to another APP.These virtual communities will further upgrade their technology capability to tag users more accurately for specific content and product recommendations.User-generated content platforms are those platforms that mostly share user-generated co

169、ntent with a particular theme/topic,such as TV reactions,video games,and restaurant reviews.Such platforms are developing well in China with the number of active users on some top platforms even reaching about 200 millions.During the COVID-19 pandemic,many brands first appeared on user-generated con

170、tent platforms for live-streaming.Similar to other types of platforms,these platforms are also adding shopping functions but are still at a very early stage.Knowledge-sharing platforms are also evolving in China.For example,gourmet recipe-sharing communities can transform into a type of e-commerce p

171、latform with a shopping function for fresh goods.CONNECTED CONSUMERS|SUB-TREND DEEP DIVEE-Commerce Mega Trends to WatchMarket Sizes of Social Commerce in China1,Billion RMBSource:1.Pinduoduo.The emergence of e-commerce platforms emphasizes social nature,involving social media and online media that s

172、upports social interaction and user contributions to assist in online buying and selling products and services.31SOCIAL COMMERCE3WHAT DOES SOCIAL COMMERCE LOOK LIKE IN CHINA?Social commerce is the combination of social networking and e-commerce and has become increasingly popular in China.Social com

173、merce can range from recruiting friends for discounted group purchases to live-streaming shopping by combining shopping and entertainment.E-commerce developed based on customers social networks,and e-commerce set by social media platforms are two mainstream social commerce.The market size of social

174、commerce reached 1,055.0 billion1 RMB in 2020 and is expected to reach 1,657.8 billion1 RMB in 2021.The primary application format of social commerce is e-commerce platforms that leverage users social networks as a critical growth driver.New customer recruitment relies on existing customers sharing

175、and recommendations in exchange for lower prices or free products.At the same time,leading social media is also building self-owned commercial capability to fully utilize the existing social networks.Previously,product placement on social media was linked to 3 -party e-commerce,so that consumers cou

176、ld conduct purchases on separate e-commerce platforms.Now,social media platforms have started to develop their own stores to keep consumers whole shopping journey on their platform.CONNECTED CONSUMERS|SUB-TREND DEEP DIVE 500.0 1,000.0 1,500.0 2,000.0 2,500.0 2001920202021EMarket SizerdE-C

177、ommerce Mega Trends to WatchNorth America and Europe come in first in Connected Consumers for their high internet penetration.The internet is a critical infrastructure that allows consumers to experience and interact with digital content and access services.The trend is a niche in the Middle East an

178、d Africa.32CONNECTED CONSUMERS|REGIONAL ASPECTSHOW DOES THIS MEGATREND VARY FROM REGION TO REGION?Regional expenditure on travel,leisure,and recreation per capita 2020 in USDAPACEUROPENORTH AMERICALATIN AMERICAMIDDLE EAST AND AFRICAThe trend is rising with the adoption of e-wallet.Virtual community

179、is also growing.where users can share the latest insights and articles on specific fields.However,social commerce is still at an early stage without clear leading players but do note brands that place shoppable ads on social media.Virtual community is a commonly observed trend.A leading social app a

180、nd content-sharing platforms have high penetration.Functional APPs are gaining presence while social apps are developing more functions like shopping.More brands are born and scaled through social media,especially for beauty brands.Virtual community is also common.Leading social APPs have a very hig

181、h penetration rate,and some payment platforms are gaining presence.Meanwhile,there is an increasing number of brands that adopt social commerce practices to increase the stickness of customers.The trend is at a very early stage.Only some leading APPs are trying to explore more and add new functions

182、like games,music,and shopping in order to become super APPs.The trend is at a relatively early stage.However,more companies are paying attention to this area.Its expected that a super APP will be created next year for South African consumers to shop online,pay bills,and send money to family.In addit

183、ion,the ongoing partnership between businesses also reveals this trend in the future.43.2%38.5%86.3%66.0%80.1%62.5%APAC(China excluded)EuropeNorth AmericaLatin AmericaMiddle East and AfricaChinese mainlandE-Commerce Mega Trends to WatchAPAC(China excluded)Middle East and AfricaNorth AmericaLatin Ame

184、rica EuropeChinese mainland33CONNECTED CONSUMERS|IMPLICATIONSConnected Consumers will continue to lay a foundation for e-commerce development in China and the world,especially in economically developed regions.IMPLICATIONS FOR THE LOGISTICS INDUSTRYCHINAGLOBALChina is optimizing the value and benefi

185、ts of a connected consumer base through apps like WeChat,which offers social options and realizes commercial value for brands.The trend is expected to maintain strong momentum in China.International social platforms increasingly connect consumers worldwide.However,most populations still rely heavily

186、 on offline services and commercial models,such as social commerce,which is much less prevalent,even in North America.Innovation in the logistics model to cater to social commerce operations.1Super APPs as a portal for consumer recruitment.2Social commerce is renovating the traditional e-commerce mo

187、del.Compared with leading e-commerce giants such as Tmall and JD.com,which have competitiveness in shipping efficiency,social commerce platforms may need to improve further and upgrade to ensure customers shopping experience.Super APPs with a large user base and multiple service offerings should be

188、considered as an essential portal for logistics players to gain users for delivery service.E-Commerce Mega Trends to Watch05 Shifting Market FrontiersBusinesses in China are devoting more resources to lower-tier cities and designing specific business models targeting consumers in lower-tier cities.T

189、he rapid growth in demand for services and goods in lower-tier cities reveals excellent market potential.KEY DRIVERS BEHIND THE MEGATREND:Due to consumers higher income levels,top-tier cities have been the primary target of big corporations in China,especially MNCs.However,developed city markets are

190、 saturated after years of market development.Brands eagerly seek new demand to fuel future growth.Disposable income in rural areas in China grew 11.5%1 annually from 2016 to 2020,exceeding the annual growth rate of 6.3%1 in urban areas.Rising income levels and lower living costs allow rural consumer

191、s to pursue a greater diversity of products and services than ever before.Meanwhile,an easily neglected fact is that most of the nations population lives in low tier-3 and below cities.There is a considerable potential consumer base waiting for brands to explore.At the same time,the development of i

192、nfrastructure also strongly supports deeper market penetration.According to Euromonitor Passport Database,the e-commerce logistics industry in China grew 26.1%2 annually from 2015 to 2019.Continuously improving the logistics systems and penetrating a wider geographic area in China supports business

193、expansion in lower-tier cities.+11.5%+26.1%CAGR of rural disposable income per capita from 2016 to 2020 in ChinaCAGR of the e-commerce logistics market size from 2015 to 2019 in ChinaOf the population from below tier-one cities in China,202094.8%Source:1.National Bureau of Statistics of China;2.Euro

194、monitor Passport Database.34Shifting Market Frontiers means that businesses in China are shifting attention from saturated high-tier cities to less-developed areas and devoting more resources to lower-tier cities.The mom-and-pop economy and price wars are the two most significant sub-trends identifi

195、ed under Shifting Market Frontiers.35SHIFTING MARKET FRONTIERS|SUB-TRENDSMom-and-Pop EconomyBrands directly connect with small businesses(mom-and-pop stores)through 2B e-commerce platforms.Price WarsE-commerce platforms compete heavily on price to attract consumers from lower-tier markets.E-Commerce

196、 Mega Trends to Watch75%1of traditional grocery shops were in tier-3 and below cities in 2018120million1Customers were served by those traditional grocery shops per day318.5million1Number of individuals registered in wholesale and retail industriesMarket Presence of Leading B2B2C Platforms in China,

197、Million of Stores Covered2.Source:1.Ministry of Commerce of the Peoples Republic of China;2.Blue Book of Characteristic Towns,LST,JD XTL.Brands are eager to connect with small businesses(mom-and-pop stores)in China,whose potential can be further explored given their high penetration.36Mom-and-Pop Ec

198、onomy1WHAT DOES THE MOM-AND-POP ECONOMY LOOK LIKE IN CHINA?Small retailers and restaurants still play a vital role in consumers daily life and the nations economic development.According to the Ministry of Commerce of China,about 75%1 of traditional grocery shops were in tier-3 and below cities in 20

199、18,serving 120 million1 consumers each day.And the number of individuals registered in wholesale and retail industries reached 318.51 million.However,the operations model remains outdated.Small business owners continue to purchase and sell traditionally.On the other hand,brands are eager to connect

200、with consumers of undeveloped areas.And so,2B e-commerce platforms that serve small independent business owners,such as mom-and-pop stores and unchained restaurants,emerged.B2B2C,as the name suggested,connects brands (B)to small retailers(B)to consumers(C).Small business formats,such as mom-and-pop

201、stores,have been long neglected by brands.However,their high volume of transactions and large consumer base have drawn the attention of industry-leading brands and e-commerce giants.With their help,digitization will further penetrate the capillary of Chinas economy.Some leading players built specifi

202、c purchasing platforms targeting small businesses,such as mom-and-pop stores,with integrated ordering,procurement,logistics,marketing,customer management,and other functions.On the one hand,such platforms directly connect brands with small retailers and support small business owners to run their sto

203、res.On the other hand,these digital systems collect information that used to be neglected,record and analyze customer transactions to help small businesses run in a more efficient way.Another type of emerging 2B platform mainly targets independent restaurants.Restaurant owners purchase fresh goods,c

204、ondiments,soft drinks,and other supplies on the platform.Emerging 2B e-commerce platforms improve the efficiency of the operations of small businesses and help brands reach and better serve consumers who had been left behind by Chinas online retailing reform.SHIFTING MARKET FRONTIERS|SUB-TREND DEEP

205、DIVE1.511.52LSTJD XTLOther PlatformsUncovered6 millionSmall retailing storesE-Commerce Mega Trends to Watch560million1People living countryside in China,2020Market Size of Community Group Purchase in China2,Billion Source:1.National Bureau of Statistics of China;2.DATA.100EC.CN.E-commerce platforms

206、targeting price-sensitive customers are competing heavily.Coupons are released frequently and in large volume to attract these consumers,especially in lower-tier cities.37Price Wars2WHAT DO PRICE WARS LOOK LIKE IN CHINA?Gaining new users has become increasingly challenging and concerns most of the l

207、eading e-commerce players.Price-sensitive consumers in low-tier cities and rural areas are regarded as the next opportunity for growth.According to the National Bureau of Statistics of China,the number of Chinese people living countryside reached 560 million1 in 2020.E-commerce platforms targeting p

208、rice-sensitive customers are competing heavily by launching community-based group purchases,coupons,and special discount version APPs.Community group purchase leverages the broad network of local community leaders to reach and serve local consumers.It is prevalent among consumers in lower-tier citie

209、s for its low-price offerings and is welcomed by the capital market.A total of 132 platforms in the community group purchase in China received financing investment in 2020 of over 14.98 billion RMB2.Community group purchase results in a win-win situation.The community leaders save the platform costs

210、 regarding user recruitment,logistics,and storage,which in turn allows for lower-price offerings to consumers.Despite covering an already large number of areas in rural and lower-tier cities,such platforms have a low penetration rate in villages,indicating there is still considerable potential.At th

211、e same time,e-commerce platforms use aggressive subsidies and coupons to acquire price-sensitive users and increase customerstickiness.Coupons are released frequently and in large volume to attract these consumers,especially in lower-tier cities.Special Discount Version APPs are those through which

212、consumers select(unbranded)products with lower prices,mainly in the C2M(Consumer-to-Manufacture)mode,providing complete category offerings at much lower prices.The points gained from multiple purchases can be deducted directly from the customers next total purchase price.SHIFTING MARKET FRONTIERS|SU

213、B-TREND DEEP DIVE3472880020E2021E2022EE-Commerce Mega Trends to WatchSource:Euromonitor research based on desk research and trade interviews.multinational companies transfer their efforts towards developing countries.Less market frontier trend.As some developed regions of the g

214、lobe become over-farmed,over-populated,or otherwise reach their maximum potential,disposable income in less developed areas such as Africa grows,exposing still considerable unexplored potential.38SHIFTING MARKET FRONTIERS|REGIONAL ASPECTSHOW DOES THIS MEGATREND VARY FROM REGION TO REGION?Regional CA

215、GR of disposable income from 2016 to 2020 APACNORTH AMERICALATIN AMERICAMIDDLE EAST AND AFRICAAt the regional level,relevant applications are rarely seen out of the APAC region.Leading e-commerce players mainly influence the trend in China.Some connect domestic suppliers with small to medium busines

216、ses in the APAC region.Leading e-commerce players use discounts,coupons,vouchers,and increasingly frequent sales activities to attract consumers.Emerging platforms connect small local retailers and offer delivery services.In addition,there are emerging platforms trying to capture the rural market th

217、rough lower prices.The trend is on the rise in LATAM.There has been platforms allowing traditional retailers to join them and offer their products delivered through hyperlocal delivery.EUROPEThe trend is at a very early stage in Europe.None cases are observed.Platforms connecting small-scale farmers

218、 to customers have emerged in South Africa and Nigeria.1.0%4.3%2.9%-3.8%0.6%8.0%APAC(China excluded)EuropeNorth AmericaLatin AmericaMiddle East and AfricaChinese mainlandE-Commerce Mega Trends to WatchAPAC(China excluded)Middle East and AfricaNorth AmericaLatin America EuropeChinese mainland39SHIFTI

219、NG MARKET FRONTIERS|IMPLICATIONSA shifting market frontier is gaining momentum in less developed regions globally,providing opportunities for e-commerce players.IMPLICATIONS FOR THE LOGISTICS INDUSTRYCHINAGLOBALLower-tier cities and rural areas in China still have considerable potential under rising

220、 disposable income.As a result,e-commerce players are attempting to gain market share in these regions through low-price offerings.Less developed regions such as the Middle East,Africa,and APAC have become new emerging markets to explore because of their still rapidly-growing disposable income and u

221、nexplored landscape.Cross-border logistics is a rising focal point.1Logistics networks expand into lower-tier cities.2Domestic suppliers are eager to connect with small to medium businesses in less developed regions for unexplored business opportunities.Accompanied by the increasing penetration of e

222、-commerce players into lower-tier cities and rural areas,logistics players must also extend their networks for broader coverage.E-Commerce Mega Trends to Watch06 Sharing EconomyMore than half of Chinese consumers are estimated to have participated in sharing economy by 2019.Sharing economy continues

223、 to penetrate the China market and gradually becomes an integral part of consumer habits.KEY DRIVERS BEHIND THE MEGATREND:The key concept behind sharing economy is“Access but not Ownership,”with the relatively advanced digital development in China giving consumers greater“access”to various products

224、and services.Rising urbanization continues driving the user base for sharing economy.Shared services are most accessible in urban areas and supported by more advanced infrastructure.86.4%1 of the total Chinese population owned smartphones in 2020,enhancing the availability of shared products and ser

225、vices.From the industry end,sharing economy is continually receiving investment from major technology firms.Fast-paced urban life drives increasing demand for convenience.Companies across categories note the significant potential of providing consumers with“access”instead of“ownership”to bring them

226、a more convenient life,leading to trend growth in China.+5.8%Increase of urbanization rate from 2015 to 2020 in ChinaDirect investment in the sharing industry in China,2019Population possessed smartphones in China,202086.4%71.4Source:1.Euromonitor research based on desk research and trade interviews

227、.40Billion RMBSharing Economy is gradually becoming an integral part of consumer habits in China,driven by Chinese peoples call for convenience.41SHARING ECONOMY|SUB-TREND DEEP DIVECall for ConvenienceShared products or services gain popularity among consumers due to the conveniences they offer.E-Co

228、mmerce Mega Trends to WatchOf sharing economy of life services in 202010+%11,617.5millionRMB1Y-o-y growth rate of sharing economy of life services in China,predicted for 2020 to 20257,060millionRMB2GMV of the Shared Power Bank market in 2020Source:1.“Report on Chinas Development of Sharing Economy”p

229、ublished by the State Information Centre of China;2.Euromonitor research based on desk research and trade interviews.Technology-facilitated and easy access to products or services gain popularity among consumers due to the conveniences offered.Nowadays,people in China can easily find available renta

230、l cars,bicycles,and even power banks with only their smartphones whenever they need one.42Call for Convenience1WHAT DOES A CALL FOR CONVENIENCE LOOK LIKE IN CHINA?Car-sharing,power bank-sharing,and bike-sharing are the three most prominent sub-trends that make Chinese peoples life more convenient.Te

231、chnology,such as big data,has changed the traditional rental industry to be more efficient,saving both time and effort for end-users.According to the State Information Center of China,the market size of sharing economy in life services reached 1,617.5 million1 RMB in 2020.Car rental service in China

232、 is experiencing rapid digitization for a swifter lease process and a more extensive user base.Digital systems help users find the nearest car quickly and accurately.Besides,the cooperation with leading e-payment providers facilitates user data sharing,which guarantees user credibility for a service

233、 provider and benefits users with free deposits.The rental process becomes easier and more efficient.A more advanced model of sharing economy allows consumers to complete the process autonomously.Consumers scan the QR code on the sharing bikes or power banks and then complete the rental process auto

234、nomously.The self-service system supports the rapid expansion of sharing bicycles and power banks.Smart locker and location systems also help customers to rent and return autonomously.Sharing power bank companies that place shared power bank stations in various retail spots and allow customers to re

235、nt power banks by mobile APPs.Users can return at any available station at any location,and the rental fee automatically deducted from the bound payment account.SHARING ECONOMY|SUB-TREND DEEP DIVEEntertainment:KTV,Internet cafs and CinemasRetail scenario:Shopping malls,Shopping centers,BookstoresThe

236、me Park:Shanghai Disney ResortBusiness travel scenarios:Ancient towns,Resorts and other new scenesFoodservice:Restaurants and Milk tea shopsE-Commerce Mega Trends to WatchSharing economy is more accessible and viable to operate in regions with high smartphone ownership.Globally,sharing economy is es

237、timated to reach a 335 billion USD market by 2025.Most popular sharing economy forms increasingly rely on smartphones to actuate self-service and reach a wider audience,such as car rental,clothing rental,and bicycle sharing.43SHARING ECONOMY|REGIONAL ASPECTSHOW DOES THIS MEGATREND VARY FROM REGION T

238、O REGION?Regional proportion of population possess smartphone 2020APACEUROPENORTH AMERICALATIN AMERICAMIDDLE EAST AND AFRICAThe megatrend is mainly reflected in shared bikes,cars,and power banks.The megatrend is emerging,particularly in urban areas sharing bikes and cars/electric scooters.Power bank

239、 rental stations also are emerging in the UK.The trend is at a relatively early stage.Sharing cars and accommodations,however,is more mature.The trend is at a relatively early stage.Sharing cars and accommodations,however,is more mature.The trend is at a relatively early stage.Sharing cars and accom

240、modations,however,is more mature.72.9%65.5%87.0%70.7%78.2%APAC(China excluded)EuropeNorth AmericaLatin AmericaMiddle East and AfricaChinese mainland86.4%E-Commerce Mega Trends to WatchAPAC(China excluded)Middle East and AfricaNorth AmericaLatin America EuropeChinese mainland44SHARING ECONOMY|IMPLICA

241、TIONSSharing economy saw higher penetration in China than other parts of the world in diversity and geographical coverage.IMPLICATIONS FOR THE LOGISTICS INDUSTRYCHINAGLOBALThe sharing economy in China is under rapid development with support from leading technology companies.As a result,consumers gra

242、dually form sharing habits for items with practical daily functions such as bicycles and power banks.The forms of sharing economy are still limited in more developed regions worldwide,mainly car rental services.Further development of sharing economy requires robust infrastructure,which still needs t

243、ime to be built in many areas,especially the Middle East,Africa,and Latin America.Sharing logistics is a trend on the rise.1Logistics support for Sharing Economy.2Several major cities are already heavily congested as population density increases with the growing population and cannot absorb more del

244、ivery vehicles.Shared logistics capacity among industries can resolve this challenge.For reallocation purposes of shared items such as bicycles to balance the supply in different parts of the cities,logistics companies will be the primary stakeholder to drive the service.E-Commerce Mega Trends to Wa

245、tch07 Buying TimeMore than half of Chinese consumers are estimated to have participated in sharing economy by 2019.Sharing economy continues to penetrate the China market and gradually becomes an integral part of consumer habits.KEY DRIVERS BEHIND THE MEGATREND:Rising disposable income is undoubtedl

246、y the primary driver behind buying time because consumers need increased purchasing power to save time through outsourcing tasks.Relatively rapid economic development makes life busy for the Chinese.An increasingly fast-paced lifestyle,especially among the younger generation,calls for a greater will

247、ingness to spend to save time.Consumers willing to spend money to save time increased by 11.6%1,reaching 58.9%1 in 2020 compared to 2019 in China.The global average is only 48.0%1.Consequently,services to save time have thrived in China.Food delivery has had strong growth and is one of the significa

248、nt forms of buying time,achieving 39.3%2 annual growth in 2019(27.8%2 in 2020),and continuously pushing the trend forward.+8.0%CAGR of disposable income per capita from 2016 to 2020 in ChinaY-o-y growth of the food delivery industry in China,2019Of the Chinese population shows a willingness to spend

249、 money to save time,202058.9%+39.3%Source:1.Euromonitor Passport Consumer Survey 2020;2.Report on Food Delivery 2020 published by Meituan.45Time has become a valued asset in China.As a result,Chinese consumers are showing a greater willingness to spend money to give themselves more time.Serviced Lif

250、e and Enjoy at An Instant are the two most important sub-trends identified under Buying Time.46BUYING TIME|SUB-TRENDSServiced LifePeople are increasingly willing to pay for life services,such as food delivery and running errands,to save time.Enjoy At An InstantConsumers are demanding fast delivery a

251、nd receiving products at an instant once they place an order.E-Commerce Mega Trends to Watch18.5 billion1Orders for running errands in China in 20190.95billion1Orders for running errands in China in 20134,498.5thousand1Monthly active users of platforms for running errands,August 20204,426.8thousand1

252、Monthly active users of platforms for running errands,December 2019+64.0%1CAGR growth of orders for running errands in China,2013-2019People are increasingly willing to pay for services covering all aspects of life,such as food delivery,household services,and other people running their errands to sa

253、ve time.47Serviced Life1WHAT DOES SMART LIFE LOOK LIKE IN CHINA?People are more willing to pay for life services,such as food delivery,running errands,and 60-minute same-city delivery than ever before to save time.The most representative type is purchasing another persons time to complete deliveries

254、,purchases,and other services for you.There are already many APPs providing the service of running errands in China.Customized shopping or delivery service is completed with only a few clicks.With the development of the delivery industry,leading players have extended their businesses to other catego

255、ries,including fresh foods,medicines,and daily groceries to serve consumers more comprehensively.And when you have no time or have urgent needs of parcel pick-up or delivery,60-minute Same-City Delivery is at your disposal.The service provides consumers with short-distance rapid delivery services an

256、d more common in the first and second-tier cities where consumers are more willing to buy time with money.Lastly,online home service platforms provide consumers with daily life services,such as laundry,housekeeping,and beauty salon services.By placing orders online,consumers can enjoy having the ser

257、vices provided at home.With professional help,consumers can save their time for work or enjoyment.BUYING TIME|SUB-TREND DEEP DIVESource:1.Aurora MobileE-Commerce Mega Trends to Watch3.1trilliontons1Tolerance for an extended delivery time is diminishing,and consumers are demanding fast delivery and r

258、eceiving products at an instant once they place an order.48Enjoy At An Instant2WHAT DOES ENJOY AT AN INSTANT LOOK LIKE IN CHINA?Consumers are demanding fast delivery and receiving products at an instant once they place an order.As a result,tolerance for an extended delivery time is diminishing.Accor

259、ding to the National Bureau of Statistics of China,Chinese residents fresh food consumption reached 3.1 trillion tons1 in 2019.Inspired by this trend and supported by improved logistics systems,fresh goods e-commerce emerged and thrived in China.ordering.The development of Chinas fresh goods e-comme

260、rce relies largely on cold chain logistics.The market size of cold chain logistics in China reached 485.0 billion2 yuan in 2020,representing a 21.5%2 y-o-y growth.By placing front warehouses close to consumers,fresh regions covered.In addition,with the expanded coverage,enlarged warehouses and furth

261、er digitization,the last-mile logistics model is under continuous upgrading to service more consumers even faster.Meanwhile,the most common form of enjoy at an instant in China is Food delivery.According to Meituans Takeaway Industry Report 2019,food delivery reached a market size of 654 billion ret

262、ail value and a y-o-y growth of 39.3%in 2019.Food delivery platforms specialize in providing consumers with instant food offerings,including meals,fast food,desserts,milk tea,and the like.Recently,the takeaway business has grown beyond food to reach more aspects of consumer life,such as medicine and

263、 daily supplies.BUYING TIME|SUB-TREND DEEP DIVESource:1.National Bureau of Statistics of China;2.China Cold Chain Logistics Committee;3.Euromonitor research based on desk research and trade interviews;4.Meituan Takeaway Industry Report 2019.Of fresh food consumption of Chinese residents in 201921.5%

264、2Y-o-y growth rate of the market size of cold chain logistics in China,2020 485.0billionRMB2Market sizes of cold chain logistics in China,2020E-Commerce Mega Trends to Watch4 4 Source:Euromonitor research based on desk research and trade interviews.Regions with higher disposable income are more capa

265、ble of buying time and have greater access to relevant services.Regions like North America and Europe show a greater willingness and the capability to outsource tasks for convenience and improved life quality.Around 45.5%of consumers in the US are willing to spend money to save time,according to the

266、 Euromonitor 2020 Consumer Lifestyle Survey.49BUYING TIME|REGIONAL ASPECTSHOW DOES THIS MEGATREND VARY FROM REGION TO REGION?Regional disposable income per capita 2020 in USDAPACNORTH AMERICALATIN AMERICAMIDDLE EAST AND AFRICAThere are local and regional players emerging under the trend.For example,

267、some provides a one-hour express delivery service for urgent items such as documents,flowers,and cakes.Fresh goods e-commerce is not noted.However,food delivery is relatively mature and facilitated by leading players.Aside from some classical famous companies,there is a home service observed.Consume

268、rs can request ds e-commerce is not seen.Food delivery is relatively mature and facilitated by leading players.Fresh goods e-commerce is not noted.However,food delivery platforms are relatively mature.Certain applications under the sub-trend are observed in the region,and platforms enriched their bu

269、siness offerings during COVID-19.2,954.71,890.745,721.34,467.514,739.06,918.7APAC(China excluded)EuropeNorth AmericaLatin AmericaMiddle East and AfricaChinese mainlandEUROPEPlatforms are reinventing to offer more diversified delivery services to include parcels,alcohol,groceries,and the like.Fresh g

270、oods e-commerce is not noted.Still,food delivery is relatively mature and facilitated by leading players.E-Commerce Mega Trends to WatchAPAC(China excluded)Middle East and AfricaNorth AmericaLatin America EuropeChinese mainland50BUYING TIME|IMPLICATIONSBuying Time will gradually become a mainstream

271、demand for both China and the world,and e-commerce anticipates playing a pivotal role in serving this purpose.IMPLICATIONS FOR THE LOGISTICS INDUSTRYCHINAGLOBALE-commerce in China plays a vital role in saving time for consumers,providing fulfillment of demand at a click.The further evolution of e-co

272、mmerce platforms aims to serve life needs holistically and realize even faster delivery services.Buying time is more prominent in developed regions in the world,especially in North America and Europe.Leading technology and e-commerce companies such as Uber are transforming to deliver not only food b

273、ut also groceries.However,the trend is still under formation for less developed regions.Expedited last-mile delivery.1Logistics support for Sharing Economy.2Urban consumers seek faster and more flexible delivery options and are willing to pay for them,which means that it is helpful to build an even

274、more localized network closer to consumers.For same-day and same-hour deliveries,route planning can leverage big data analysis and AI computing power to identify the most efficient route and improve delivery efficiency.E-Commerce Mega Trends to Watch51SUMMARYWe integrated all sub-trends to present a

275、 clearer picture of their current development stage based on internet users Search Index and Media Index.Mobile-Only,Social Commerce,Omni-channel Marketing,Smart Life,Seamless Shopping Experience,and Education Technology are currently at a mature stage with the average of Search Index and Media Inde

276、x exceeding 10,000,attracting widespread public attention and discussion.At present,Serviced Life and Mom-and-Pop Economy are at a relatively early stage with limited public attention and discussion.Engage VirtuallyImmersive ExperienceInnovative CommunicationSeamless Shopping ExperienceOffline Shopp

277、ing UpgradeOmni-channel MarketingSmart LifeEducation TechnologyContactless DeliveryMobile-OnlySocial CommerceVirtual CommunityMom-and-Pop EconomyPrice WarsCall for ConvenienceServiced LifeEnjoy at An Instant1,0002,0003,0004,0005,0006,0005,00010,00015,00020,00025,000Mature Stage -Index Average=10,000

278、Growing Stage-10,000 Index Average 1,000Early Stage-Index Average =1,000Media Index,Indicating publics attention on trend-related media reportIndicating publics active search on trend-related topicsSearch Index,Search Index:The index is calculated based on internet users search actions on Baidu of specific keywords.Media Index:The index is calculated based on internet users reads,comments,likes,and share actions towards Baidus news feed.Source:Euromonitor adjusts to retain data comparability based on the Baidu Index.E-Commerce Mega Trends to WatchThank you小程序