Traditional offline shopping may have been hit hard by the explosive success of e-commerce in China, but there is still hope for it yet.
Venture capital firm Matrix Partners China and indoor location services provider Rtmap on Wednesday jointly published a report on consumers’ offline shopping behavior in China.
The report gathers data from 239 million offline shopping experiences over five years, covering 2,023 offline shopping stores, among which 62% are department stores and 32% are shopping centers.
Perhaps due to the impact from e-commerce, Chinese consumers’ preferences and motives for offline shopping are showing new characteristics, offering insights as to how offline commerce can prosper.
In terms of the number of shopping centers and department stores, second-tier cities have an obvious advantage over first-tier cities. In addition, the number of offline shopping places in third-tier cities is also developing rapidly. This may be due to the fact that rentals for offline stores are comparatively lower in less developed cities.
When it comes to the frequency of visiting offline shopping places and the time spent per visit, offline commerce also performs better in second- and third-tier cities than in first-tier cities.
While the average time for each offline shopping trip is 97 minutes in first-tier cities, it is 139 minutes and 121 minutes in second- and third-tier cities respectively.
Simply offering a place for customers to buy what they need no longer fits the picture. Instead, shopping centers are becoming popular for offering consumers one-stop services that include catering, entertaining, and other services, as well as just shopping.
The report shows that 80% of offline consumers are young, and that consumers aged between 26 and 35 years old are more willing to purchase the more expensive items or brands. For example, 62% of the buyers of clothes that cost between RMB 500 (USD 73) to RMB 3000 are consumers aged between 26 and 35.
In addition, female (62%) consumers seem to favor offline shopping more than males (38%). Females aged between 25 and 45 years old are the major force supporting offline shopping. 61% of them prefer high-end international brands; among their favorites are the likes of Sephora, Nike, Zara, and Burberry.
In respect to the occupations of the major offline-shopping population, the top five fields are banking/insurance, funds/securities/real estate, IT/cars/electronic industries, trading/retail/services, and research and government agencies.
Those with an annual income of between RMB 410,000 and RMB 500,000 contribute the most to offline shopping, followed by those with an income of over RMB one million, and those with an income between RMB 310,000 and RMB 400,000.
According to the report, offline shopping places that clearly target a certain group enjoy higher ratios of returned customers.
For example, urban shopping centers that target buyers of luxury items may have a stable, almost fixed income, with a returned customer ratio of around 80%. Aside from this, some community shopping centers with cinemas, karaoke clubs and supermarkets also enjoy a decent ratio of returned customers.
Peak time for shopping appears during spring and fall. Additionally, the report shows that the top 3 brands that attract the most consumers are Starbucks, Apple, and ZARA.
Offline commerce may have suffered a blow from online e-commerce; however, the former has been recovering from the hit by cooperating with the latter. The report shows that 18% of offline consumers would log onto the WI-FI of shopping centers for product-relevant information, while 40% would use online payments to complete an order.
(Top photo from Baidu Images)