Roaming though one of the many Shanghai
shopping malls one could not help but wonder where everyone was? The place was
empty, populated with the low paid workers tirelessly keeping it clean.
Meanwhile, a few fiber-optic wires away, a booming mall was busy catering to the 250m+ customers enjoying a hassle free
shopping experience. That mall was Taobao.
Whether it be a casual or luxury shopper–intellectuals (refined, less brand
focused), followers (doing just that), lovers (big brand, big logo), or the
laggards (last to keep up) the one stop shop that is the behemoth Taobao is
catering to them all with a great velocity.
Taobao is simply an online force of nature. Bigger than eBay, Amazon, and the
rest. There are a number of contributing factors behind it’s incredible
growth. The vast array of products, cheap distribution costs (average
delivery is $2), easy debit payment methods, transparency of sellers, the list
goes on. Just incredible to see how it captured a whole nation.
The latest push by TaoBao is to make the official ‘retail TaoBao Mall’ aligned
with Chinese offline retail standards. Licenses, professional fit outs,
online service and standards are now a pre-requisite in setting up a store.
But it’s all worth it. As many foreign brands are learning the key
to retail success in China
is vast becoming an online play. With brands such as Zara, Louis Vuitton,
Adidas all with online flag ship stores.
Traditional retail expansion is certainly a requirement for customers
experience. Yet the challenges that accompany gaining any real headway in
China’s retail industry requires millions of dollars in securing space,
government red tape and not to mention the staffing headaches make this only a
‘if we must’ strategy. China
has over 300 cities with 1m+
residents, that’s a lot of retail space to cover. One online store front
and a shift in marketing investment can support market development overnight.
Traditional thinking expects a shoppers would always consider the ‘touch and
feel’ retail experience a necessity. But as we learn more about the
Chinese ‘modern’ consumer they are more than comfortable to explore through
trusted online Chinese channels.
Andrew Collins is the CEO of Mailman.