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SHANGHAI Trends / Retail / Marketing / Digital
THE NEW ELDORADOFOR YOUR BRAND
What’s inside?◆ Foreword …………………………………………………………………………..p 3 !//1. The Youth of Shanghai: who are the young?......………………………………...5 //2. Socio-Trending: a city that marches to its own beat……………………………13 //3. The Digital Boom: the WeChat phenomeon and other specifics......................20 //4. Retail: new types of in-store consumption……………….…….........................38 //5. Ecology and Well-Being: changing mentalities…..……....................................49 //6. Western Beauty: the current beauty standard………………………............59 //7. The Western Model: the most influential countries and cities……….…….66 //8. Case Study: Farine Bakery: the Western concept of the art of food.................75 //9. Merchandising: trends and observations…………………………………………87 //10. Let’s go outside: getting around in Shanghai…………………………………102 //11. Iconic Shanghai: becoming a world leader..………………..…………......….115 ◆ Summary: what to remember..................................................................118
!◆ Contact: we’re here for you!.………………………...…............................122
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Foreword◆ All the big brands are rushing to China, the Western world’s new Eldorado, but
many stumble due to a lack of experience and inadequate information. The purpose of this guide is to bring you true facts about Chinese consumers and their habits, to showcase the « best practices » as well as emerging trends and influential movements in Shanghai. These will help you in the development of your brand and business strategy in China, covering the full spectrum - from the point of sales to digital. !
◆ To prepare this guide, we spent over 9 months on the ground in Shanghai from March 2014 to January 2015. Why choose Shanghai as an example? Because it’s the largest city in China with a population of 23.5 million, and one of the biggest cities in the world. Shanghai is also on an exceptional economic and cultural dynamic. It is the Chinese city that acts as a benchmark for new trends, concepts and innovations. It is therefore a ‘must be’ destination city for today’s brands.
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Foreword◆ We observed Shanghainese consumers as well as the youth of Shanghai, who you
will see live and behave very differently from their parent’s generation. We found and researched the trends which are building and evolving brands. From all these sources of inspiration, we have chosen, summarized and kept the best: the most striking trends and observations to take into consideration and quickly include in your strategy for China. !
◆ Some observations and trends may not be pertinent to your particular line of business, which is only normal. The goal through this guide is to present insights which will help you, inspire you and renew your thinking in a disruptive manner and bring the best examples emerging from Shanghai and China for your success tomorrow. For a study of your business or a personalized collaboration, please contact us: [email protected]
Enjoy the read.
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// 1. THE YOUTH OF SHANGHAIWHO ARE THE YOUNG?
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# THE SPECIAL ONES◆ YOUNG CHINESE BORN IN
THE 1980’s AND 1990’s !Today’s Chinese youth are seen as the golden generation. The new generation of students and young professionals are much more aware of their opportunities and abilities in today’s society thanks to the Internet. They are more confident and demanding than their parents or grand-parents. Having grown up in a quickly evolving society - an economic boom and changing mentalities – today’s young are modifying attitudes in terms of work, fashion, life and consumerism. 6
// 2. SOCIO-TRENDINGA CITY THAT MARCHES TO ITS OWN BEAT
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# BACK IN TIME◆ THE SHANGHAINESE DISCOVER
VINTAGE !Even as the city is overflowing with innovations, vintage has appeared, apparently for good. This trend shows that the Shanghainese, like Westerners, are drawn towards progress and the future, but at the same time desire to reconnect with their roots and a past which provides a sense of comfort and authenticity in face of an uncertain future. !Expats tuned-in to this trend have literally brought it in their suitcases. Some have even opened actual boutiques. These stores use WeChat to promote their latest products and collections and to connect with the lively vintage community of Shanghai.
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// 3. THE DIGITAL BOOMTHE WECHAT PHENOMENON AND OTHER SPECIFICS
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The digital revolution◆ China is the country with the most internet users (632+ million in June 2014). These
numbers shed light on the business opportunities which account for millions of dollars.
!!◆ Most internet users are connected through their mobile phones (527+ million, or
87% of internet users), which partially explains the exploding success of WeChat, the instant messenger service owned by TenCent. !
◆ The Chinese sector of e-commerce is the most dynamic in the the world. Just about everything can be purchased online through numerous platforms (TMALLcom, JD.com, Taobao, Yihaodian etc.). Online purchasing is more and more common, especially among the young. E-commerce has even become a hobby in China: a method to relieve the pressure of work for some, and for lower tier consumers, the only form of entertainment.
!◆ We have noticed a slight decline in the use of social networks (-7,4% compared to
last semester) due to the enforcement of repressive measures (recent manifestations in Hong Kong) against Sina Weibo (the equivalent of Twitter in China) and WeChat. 10
# THE PHENOMENON WECHAT◆ THE INESCAPABLE CHAT APP !Introduced by the local web giant Tencent, WeChat is a phenomenon in Chinese society. !It has become the ‘absolutely must have’ app on your smartphone. All the tasks of daily life are done via WeChat: communicating with friends, ordering a taxi, buying products online. !A cheap copy of WhatsApp at the onset, over time Wechat was perfected to the point of taking over the famous American app owned by Facebook. This is due to the non-stop addition of new functions.
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# A FORM OF EXPRESSION
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◆ Like all Western social networks, WeChat is a platform on which people post their daily acitivities, today’s youth being the most avid posters. The trend of ‘self-expression’ has only increased the phenomenon. !
◆ It is a treasure for brands who are hungry for knowledge about what their young consumers eat, what brands they buy, and where they like to hang out.
// 4. RETAILNEW TYPES OF IN-STORE CONSUMPTION
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# SENSORIAL DISCOVERY
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◆ SENSORIAL PLEASURE !
The Chinese consumer is in a full discovery phase. Each week new brands and products are introduced to the market. These brands are found online but also in stores. !An opportunity to touch, look at and feel. Growing in popularity, this manner of introducing products has made it difficult to develop loyal customers. It is a tough battle and every aspect related to a product is tested: the packaging and merchandising being hugely important. !Think about the sensorial impact and personalization of your products geared to the Chinese consumer. How can you surprise them?
# POP-UP STORES
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◆ Many « pop-up stores » are emerging in Shanghai as well as brand specific stands. These allow consumers who are on the lookout for the latest thing to discover new brands.
Here is an Estee Lauder stand at the entrance of a shopping mall in the Jinghan area of Shanghai. !A Western model – a beauty reference for local Shanghainese women – applies make up at the entrance of the mall in front of a captivated audience.
// 5. ECOLOGY AND WELL-BEING CHANGING MENTALITIES
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Awakening ◆ With the unstoppable economic growth combined with intensified urbanisation and
a general increase in the quality of life, the Chinese are little by little awakening to their health and the environment. !
◆ The regular pollution spikes in Shanghai serve only to reinforce those who criticize the government and industrial giants regarding the matter. Despite the measures taken by the government to control the problem, the Chinese population is dissatisfied with what they consider to be insufficient progress. !
◆ There are still very few awareness campaigns, but they will become more frequent as the population becomes more sensitive to the problem – especially in top tier cities. !
◆ The environment as well as natural and artisanal products are therefore interesting resources that could be exploited by foreign businesses who have an advantage in this area over local Chinese brands.
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# NATURE IN THE CITY◆ Skyscrapers blocking the sky, very little greenery and unbearable pollution at
times, Shanghai truly is an urban jungle. !
◆ Brands give the Shanghainese consumer a chance to escape by means of merchandising and ‘nature oriented’ communication campaigns. !
◆ The most striking example is the boutique Central Central in Shanghai that installed grassy pasture scenes in their storefront window.
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// 6. WESTERN BEAUTYTHE CURRENT BEAUTY STANDARD
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# BEAUTY CRITERIA
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Western aesthetics and design codes are still sought after by the Chinese consumer and remain the beauty standard.
◆ As seen on the left, Western beauty is still the standard for the Chinese population. Foreign brands can exploit this advantage – with or without the common cliches. !
// 7. THE WESTERN MODELTHE MOST INFLUENTIAL COUNTRIES AND CITIES
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# UNION JACK◆ THE UNION JACK IS
EVERYWHERE !In the game of highlighting and enhancing Western countries, the Union Jack is probably the most widely used emblem. !On practically every street in Shanghai, you will come across a car, a scooter or someone wearing a t-shirt with this British icon.
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# THE BIG METROPOLISES
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◆ New York, Paris and London have a large presence in tier 1 cities across China. In high profile brands, they have found a vehicle to convey their aura. You can find their distinctive idiosyncracies in stores, merchandising and advertising campaigns, as well as on clothing.
To engage with customers who are becoming more demanding, offer a more original look shifted toward these big cities or imagine how your brand can portray Shanghai as a city that can hold its own against these mega cities.
// 8. FARINE BAKERY THE WESTERN CONCEPT OF THE ART OF FOOD
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# CASE STUDY: FARINE◆ Clichés, notably those of France, are abundant in China. The affluent and
sophisticated population of Shanghai are no longer fooled anymore. Immersed in a global culture they desire to engage in the most authentic and refined experiences as possible. !
◆ In this particular context, how does one transmit a modern image of France, while preserving the classic French characteristics that are world-renowned?
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// 9. MERCHANDISING TRENDS AND OBSERVATIONS
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What’s New?◆ Shanghai has made tremendous progress in terms of in-store concepts,
merchandising and in creating a multi-sensorial experience for customers. !
◆ The city may not yet be on par with ‘world capitals’ such as New York, London, Tokyo, Milan or Paris, but it is rapidly catching up. !
◆ In terms of trends, Shanghai is a follower rather than a trendsetter city. Nevertheless, things are changing rapidly and we were able to uncover some strong merchandising trends unique to Shanghai. !
◆ Of equal importance is the presence of global merchandising in Shanghai. Big brands, like Nike, use global guidelines for their strategic merchandising, which they alter only slightly according to key countries and cities.
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// 10. LET’S GO OUTSIDE GETTING AROUND IN SHANGHAI
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# TESLA / UBER: ‘ECO CHIC’◆ TESLA: THE ART OF
STANDING OUT !
When launching its latest luxury sedan – the Model S – in Shanghai, Tesla partnered with Uber, the app for private chauffeurs. Uber clients could test drive the Model S for 15 minutes around the streets of Shanghai.
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There is no doubt that the Model S will be a success in the important cities of China, due not only to its intrinsic qualities as an automobile, but also because it is a prestigious status symbol. Owners of a Tesla will be viewed as chic and sophisticated individuals who care about the environment, which is very important to the well to do Chinese class who wish to stand out from the masses. !
// 11 ICONIC SHANGHAIBECOMING A WORLD LEADER
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# ICONIC SHANGHAI
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◆ With its newly acquired status as a bustling economic and cultural power house, Shanghai has become a magnet for advertising. The biggest brands are now using it more frequently as a new backdrop for their campaigns.
!◆ Luxury brands, which are often trend-setters, are not mistaken about Shanghai.
Yves Saint Laurent has just launched « Black Opium » with a multi-channel campaign set in Shanghai destined only for the European market. It showcases the city’s hotels, streets as well as the famous psychedelic tunnel on the Bund.
To view the campaign: http://bit.ly/1phsvm0
// 12. SUMMARYWHAT TO REMEMBER
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// 13. CONTACTWE ARE HERE FOR YOU!
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CONTACT◆ Urban Sublime is a trend agency and marketing consultancy committed to
pragmatic innovation. Based in France and connected worldwide thanks to a network of experts in New York, Milan, London, Berlin, Singapore, Shanghai and Florence, we forecast and detect trends, innovations and emerging movements. We can help you adapt your strategies and your customer relations in a pragmatic manner according to evolving markets and consumer habits. In short, we can help you become the best and ensure you remain the best. !!
Laetitia FAURE CEO [email protected] !◆ “Trending” is a one day workshop. It is a targeted analysis to help you integrate in a
pragmatic manner the trends of your business. Contact us!
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Alex Cortey Senior Trend Analyst [email protected]
