Continue to launch new stores, launch new products, live broadcast goods, foreign senior farming the world's second largest consumer market-
Investing in new consumption, foreign investment can be targeted! (Decoding new trends in foreign investment ①)
Our reporter Li Jie
In recent years, global cross-border direct investment has continued to slump, and the spread of the new coronary pneumonia epidemic has cast a shadow over it. However, China's foreign investment trend is stable. In April and May this year, China's actual use of foreign capital rose against the trend.
How attractive is the Chinese market? How can foreign investment seize new opportunities in this rich and diverse market that is constantly evolving and changing? Starting today, this edition launches a series of reports on "Decoding New Trends in Foreign Investment", focusing on new ideas, new explorations, and new layouts of foreign investment in China, and telling the story of the growth of foreign businessmen, foreign capital, foreign companies, and the Chinese market.
Starbucks invested US$129 million to build a coffee roasting factory in Kunshan, Jiangsu; Rosen announced an additional capital investment of 200 million yuan this year to invest in the Chinese market; Kaike's second store project in mainland China was launched; Toyota of Japan plans to cooperate with FAW to invest in Tianjin Build electric vehicle factories... There are frequent bright spots and new ideas, and consumption is undoubtedly the most popular field for foreign investment in China. What is the driving force behind it?
From catering, home appliances, retail to the beauty industry, many foreign companies interviewed said that the epidemic has a short-term impact, but it does not affect their confidence in the long-term development of the Chinese market. Iterative consumption upgrades, multiple demand bursts, accelerated integration of online and offline, as well as endless new business models and new models, are constantly activating consumer potential. Strengthening new consumption has become the direction that foreign capital is firmly focused on.
Consumption supplement, market confidence is not reduced
Create a "one-person food" package, develop the take-out business with the trend, launch the fresh steak retail business to meet the growth of the demand for cooking at home, lock in the celebrity ingredients "crayfish", taste innovation is still uninterrupted... The epidemic has impacted the catering industry However, Pizza Hut's restaurants under Yum China are seeking new ideas and changes under pressure.
“As of the end of April, about 99% of our domestic restaurants have resumed business partially or completely.” Yu Cuirong, CEO of Yum China, said that the restaurant passenger flow is still lower than the pre-epidemic level, and the recovery period is expected to be extended and in different regions , Time period and market segment recovery rhythm will also be different. However, since the outbreak, the take-away and take-away businesses have grown rapidly, and the increase in online orders has effectively curbed the decline in overall sales.
The new coronary pneumonia epidemic has brought many challenges to many companies, but the positive and effective response and the strong resilience of the market have given foreign companies sufficient confidence.
Suppressed consumption is being released--
This year's Dragon Boat Festival, Sephora opened three new stores in Nanchang, Changsha and Linyi at the same time, and was warmly welcomed by local consumers. "As the epidemic prevention and control situation improves, consumption is gradually returning to normal levels, and the overall high-end beauty market is showing a positive trend." The relevant person in charge of Sephora said that it can be seen that consumer demand always exists, and Sephora wants to What you do is continue to invest in China.
Upgrading consumption is still cultivating and growing-
"By June 29, Tianjin has opened 11 new stores, and the first store in Hebei is expected to open for business in mid-to-early July..." Che Wenhuan, deputy general manager of Rosen (Beijing) Co., Ltd., cited Rosen’s convenience this year The store's opening report card. Due to the decrease in passenger traffic around office buildings, schools and other areas, the operation of some of Rosen’s stores has been significantly affected by the epidemic, but the pace of launching new stores has not been suspended. "Under the background of consumption upgrade, the consumption power at this level of the city is very strong. Our idea of continuously launching new stores remains unchanged, and expansion will not stop." Che Wenhuan said.
The new consumption brought about by the epidemic prevention brings opportunities——
Since the outbreak, Vorwerk's sales not only did not decline, but increased slightly. "For home appliance companies that have already used smart new retail or omni-channel operations, the impact of the epidemic is minimal. Small appliances such as Meishan multi-functional food processor, Kebao vacuum cleaner, etc. of Vorwerk are catering to consumers' homes. The demand for homes has also become a gold category that is growing against the trend," said Cha Sheng, general manager of Vorwerk China.
Facing the epidemic, Vorwerk acted very early. In late February, Vorwerk officially started as the first batch of resumption enterprises in the Qingpu Industrial Park in Shanghai. "During this anti-epidemic process, we saw that the Chinese government has very strong control over the epidemic situation, which is the fundamental reason for our confidence in the Chinese market." Cha Sheng said.
Demand escalates, keeps plowing in China
In the short term, there are strategies to cope with the epidemic, while in the long term, it is to further gain insight into the consumption and deepen the layout and actions of the Chinese market.
On the one hand, the pace of development of foreign brands in China is still accelerating.
According to data from Tmall International, from January to March this year, more than 200,000 new products were launched on Tmall International, and the opening speed of overseas brands increased by 327% year-on-year. This year's "June 18" e-commerce shopping festival, a total of more than 25,000 overseas brands from 92 countries and regions came to "catch up", the first new import brands participating increased by 64% year-on-year, and the first new products exceeded 400,000.
"Due to the epidemic, offline channels of overseas brands have been blocked, and online platforms have become channels for global brand marketing. Many new overseas brands have accelerated the pace of marketing and seeking new growth in China." Liu, President of Tmall Import and Export Business Group Peng said.
On the other hand, the pace of cultivating the Chinese market has gone deeper and sunk.
"Monet" afternoon tea, 30th anniversary platinum menu, this is Pizza Hut's recently launched "new product." In the 30 years since it came to China, it has witnessed the change from the western food knowledge that initially brought consumers “pick up knives and forks” to satisfying the growing middle-income group's new demand for fashionable, diverse and high-quality life. "Pizza has repositioned the brand, seeking innovation in various aspects such as menus, restaurant formats, marketing, services, and product value, trying to continuously bring a refreshing experience to consumers." Qu Cuirong said.
At the same time, Yum China launched the "town restaurant" in Shangqiu Zhecheng, Zhoukou Xiangcheng and other places. The brand-new "town menu" matches local prices, which also allows fast food brand culture to enter the lives of more people. "For China's fifth- and sixth-tier markets, Yum China has conducted beneficial explorations in terms of dishes and consumption patterns." Qu Cuirong introduced that Yum China now operates nearly 10,000 stores in 1,400 cities. In 2019, 55% of KFC New stores and 50% of Pizza Hut's new stores are located in third-tier cities and below.
The story of consumption upgrading has already surpassed the first- and second-tier cities, reaching a wider area and a wider consumer group, and has become an opportunity for many foreign investors to see.
"We used to worry about the local market and consumption capacity when we opened new stores. Now this kind of worry does not exist at all. Taking big cities as the center to expand to surrounding cities and increasing investment in the whole country, this direction has never changed." Che Wenhuan said . Not long ago, Rosen announced that it will invest another 200 million yuan this year to invest in the Chinese market. They set a goal: to open 3,000 stores this year and exceed 10,000 by 2025. "I have confidence in accomplishing this year's goal." Che Wenhuan said.
Qu Cuirong said: "Despite the impact of the epidemic, Yum China is still optimistic about China's long-term development, and this year it still maintains the goal of opening 800 to 850 new stores."
New formats, tap potential online and offline
Temporarily replace the offline experience center with a virtual online store model, introduce products through live broadcasts and other interactive methods, and conduct online courses and consulting services... During the epidemic prevention period, Vorwerk has more inclined to shift its operating resources to online channels. But in fact, the layout of digital services has already begun.
"With the rise of digital consumption in recent years, consumers are increasingly looking forward to omni-channel shopping consumption and consistent service experience. People are not only buying, but also paying more attention to the healthy lifestyle brought by products, so we started building digital platforms very early , Rich content, so that consumers can not only complete cleaning and cooking through the product, but also learn new knowledge and make new friends." Cha Sheng said.
Online and offline integration is accelerating, and many foreign-invested companies are also tapping their consumption potential in new business formats and new models.
Recently, Sephora opened a flagship store on Tmall International, and began to explore the introduction of Sephora's cutting-edge overseas brands through cross-border e-commerce. "In the Chinese market, we are seeing more and more diversified consumer preferences, especially the younger generation’s increasing demand for personalized beauty, and foreign excellent niche brands are also beginning to be favored. We hope this way Multi-beauty lovers experience the latest and most cutting-edge overseas goods." The relevant person in charge of Sephora said that China’s online and offline retail markets are undergoing deeper integration every year, so they have also been committed to promoting the best Channel experience.
From Cartier and Giorgio Armani to Prada and Dior, this year, many international big names have accelerated the process of layout on the Chinese e-commerce platform. "Effectively reaching young consumers and rapidly expanding the geographical coverage of consumers is one of the most immediate results after the brand has settled in." Tanning Fashion staff member Jia Ning told reporters that the younger generation is more able to accept new online purchases At the same time, because many offline stores of first-tier brands are mainly concentrated in first-tier and second-tier cities, online sales have also welcomed more consumers in third-tier and below cities.
Yum China is constantly exploring the use of digital means to empower stores. For young consumers who are becoming the main force, establish a digital ecosystem with "Super APP" as the core; at the same time, launch personalized menus, coupons and dish recommendations based on AI algorithms to meet personalized needs. "Yum China is firmly optimistic about China's long-term development. The company will continue to invest in digitalization, technology and supply chain, build end-to-end digitalization, and use digitalization to empower stores." Qu Cuirong said.
From innovative "first stores" such as offline experience stores and concept stores, to online flagship stores, virtual centers, and smart retail new gameplay, the driving force behind them is diversified consumer demand, and more Positive judgment in the Chinese market.
"In the short term, small home appliances still have strong vitality and a broad market; in the long run, the Chinese home appliance market is upgrading from low-end to high-end, from price to value, and the combination of online and offline omni-channels is the future retail trend. We Further optimistic about the Chinese market." Cha Sheng said. Vorwerk has already signed up for this year's Expo, hoping to push the omni-channel digital shopping experience and new products to Chinese consumers.