The new retail service complex Huoshaolianying and Hurun Research Institute jointly released the "Hot Win-Win HurunchinawareTail Report 2023" today. The 64-page report covers the analysis of the development path and current situation of retail industry in China, the overview of retail industry development from Hurun list, the changes of consumer demand and trends after the epidemic, such as the rapid development of instant retail, the improvement of consumers’ quality of life, the reconstruction of consumption in the meta-universe, and the imagination of future retail scenarios driven by technology.
In March 2023, the State Council’s "Government Work Report" proposed to focus on expanding domestic demand and give priority to restoring and expanding consumption. Focusing on "improving consumption conditions, innovating consumption scenarios, creating consumption atmosphere and boosting consumer confidence", the Ministry of Commerce has positioned 2023 as "the year of boosting consumption".
Since the beginning of this year, local policies have intensively introduced and implemented a series of policies and measures to restore and expand consumption to meet the diversified needs of consumers, combined with their own resource endowment characteristics, actively cultivated new consumption formats and new scenarios while optimizing traditional consumption supply, and led supply innovation with consumption upgrading, which added new vitality to the consumer market and promoted the rapid growth of consumption. According to the economic data released by the National Bureau of Statistics, in the first three quarters, the total retail sales of social consumer goods exceeded 34 trillion yuan, a year-on-year increase of 6.8%. On the whole, the market recovery trend is still continuing, commodity consumption is steadily recovering, service consumption is growing rapidly, cultural and entertainment consumption continues to expand, and consumption potential is accelerating.
New retail refers to the deep integration of online and offline through the Internet, big data, artificial intelligence and other technical means to reshape the form and mode of retail industry. The new retail has the following characteristics:
1. Digitalization: The core of new retail is digitalization, which drives business decision-making and operation through data to improve efficiency and service quality.
2. Personalization: Consumer demand is becoming increasingly complex. With the help of big data and artificial intelligence technology, new retail can accurately understand consumer demand and provide consumers with personalized products and services.
3. Integration: The new retail emphasizes the integration of online and offline, breaks the traditional channel boundaries and realizes omni-channel sales and marketing.
4. Intelligentization: Through artificial intelligence, Internet of Things and other technologies, new retail can realize intelligent operation, intelligent decision-making, operation and service, and improve efficiency and customer experience.
5. Socialization: Social media will become one of the important channels for new retail. Enterprises need to establish close ties with consumers through social media to achieve accurate marketing and word-of-mouth communication.
6. Greening: With the improvement of consumers’ awareness of environmental protection, new retailers also need to pay attention to green development. Enterprises need to take environmental protection measures, promote green products and services, and improve corporate image and brand value.
7. Supply chain optimization: New retail needs to optimize supply chain management to achieve efficient collaboration in procurement, inventory and logistics. At the same time, with the help of big data and artificial intelligence technology, the supply chain is intelligently managed to improve efficiency and reduce costs.
Application of 8.5G technology: 5G technology will bring more opportunities and challenges to new retail. For example, high-speed, low-latency data transmission is realized through the 5G network, which improves the customer experience and service quality; At the same time, with the help of the large bandwidth and low delay characteristics of 5G network, remote control and intelligent operation and VR real+virtual application scenarios are realized.
Cao Desen, Chairman of Xuetan Technology, said: "I am very pleased to jointly publish the White Paper on New Retail in China with Hurun Research Institute, the world’s leading authority on the study of high net worth individuals in China. With the rapid development of science and technology and the increasing complexity of consumer demand, the traditional retail industry is facing great challenges. In order to meet these challenges, the retail industry in China is undergoing a profound transformation towards a new retail model that is more intelligent, efficient and personalized. The’ China New Retail White Paper’ aims to deeply explore all aspects of this change and provide reference for new retail development trends and strategies inside and outside the industry. "
Hurun, Chairman and Chief Investigator of Hurun Report, said: "Hurun Report has been tracking the wealth history of China and the world for more than 20 years, and we found that the retail industry has always been one of the top five industries with the largest number of billion-dollar entrepreneurs in the world. In terms of total wealth, consumer goods and retail are the top two industries with the highest total wealth on Hurun’s global rich list this year, accounting for more than 20% of the total wealth of global entrepreneurs with a billion dollars. Interestingly, the younger generation of entrepreneurs are also keen on new retail tracks. Among the nearly 300 entrepreneurs in Hurun U30 China last year, new retail became the fourth largest track for entrepreneurs under the age of 31 in China after enterprise technology, advanced manufacturing and education. "
"From our global unicorn list, the retail industry is the fourth largest industry subverted by global unicorn enterprises. After financial services, enterprise management solutions and medical health, the retail industry has been subverted the most, with e-commerce as the main one. Driven by the Internet, big data, artificial intelligence and other technologies, the retail industry began to transform from the traditional model to digital and intelligent. The biggest breakthrough recently may be in the new retail of cross-border e-commerce, including fast fashion cross-border e-commerce Shein, etc., which has achieved rapid development through comprehensive supply chain+digital Internet retail+international express delivery. "
"In 2022, China’s digital economy will reach 50 trillion yuan, accounting for 41.5% of GDP, and digitalization will become the engine of China’s economy. Under the background of digital economy, the new retail business model has become the inevitable trend of retail development. As the government accelerates the deep integration of the digital economy and the real economy, and the promotion of a new generation of digital technology, digitalization has penetrated into all aspects of the retail industry, which has also caused tremendous changes in consumer behavior and shopping habits. "
"The new retail model driven by digitalization is empowering the entire industrial chain, profoundly affecting and significantly improving retail efficiency, thus helping the retail industry achieve high-quality growth. At present, China’s economy is in the process of recovery. We think it is necessary to observe the development status and consumption trend changes of the retail industry in China. I am very happy to jointly publish this’ White Paper on New Retail in China’. I hope the report can help all sectors of society understand the development status of the new retail industry and tap the imagination of future retail. "
The main findings of the report are:
Retail industry is the source of wealth for global entrepreneurs.
Looking at the Hurun list, the white paper analyzes the most successful entrepreneurs in the world, and it can be found that the retail industry has performed steadily and has always been the Top5 industry, the wealth source of global billion-dollar entrepreneurs. According to the Hurun Global Rich List in 2023, consumer goods (9.2%) and financial services (9.1%) are the top two industries of the world’s billion-dollar entrepreneurs, while medical care (8.4%) and retail (7.7%) rank third and fourth. In terms of total wealth, consumer goods, retail and financial services industries are leading, accounting for more than a quarter of the total wealth of entrepreneurs with a billion dollars.
When the consumer and retail recovery is going on, high-end consumption highlights resilience.
According to the economic data released by the National Bureau of Statistics, in the first three quarters of 2023, the GDP was 91.3 trillion yuan, an increase of 5.2% at constant prices. The total retail sales of social consumer goods was 34.2 trillion yuan, a year-on-year increase of 6.8%.
China’s high-end consumer market still presents a series of striking phenomena. According to "2023 Hurun to Excellent Products-Brand Tendency Report of High Net Worth People in China", the scale of high-end consumer market in China has reached 1.65 trillion yuan. Accordingly, the overall level of consumer prices of high-net-worth individuals in China has risen steadily, and their consumption power has continued to develop. In 2022, the consumer price index (LCPI) of high-net-worth individuals in Hurun China increased by 6.5% year-on-year, the highest increase in ten years.
Insight into consumption concept in 2023: the demand for quality upgrading remains unchanged, but more attention is paid to real demand.
According to the data of this survey, 41% of the respondents indicated that their consumption demand is still there and has not shrunk, but the consumption structure will be adjusted according to the changes of demand. This consumption structure, which is adjusted and upgraded according to their own actual needs, reflects the quality upgrading and rational consumption attitude. More than 40% of the respondents said that the annual household income has increased since 2023 compared with the same period last year. Among them, 59% of the respondents indicated that they would increase the total annual household consumption in the coming year, an increase of 2.6 percentage points compared with 2022.
Insight into consumption structure in 2023: tourism enthusiasm is high and health is still the primary concern.
In terms of consumption structure, tourism enthusiasm is high. Nearly 50% of the respondents plan to spend more on tourism in the coming year, followed by health care and black technology electronic products, with 45% of the respondents each planning to increase. It is expected that collections and gifts will reduce spending more, with 12% and 11% of respondents saying they plan to reduce spending. Among the subdivided consumer groups, Generation X (44 years old and above) has the strongest willingness to consume and upgrade "health care".
Insight into consumer behavior in 2023: Generation Z has higher requirements for immediacy and likes to explore the unknown, while Generation Y pays attention to experience and Generation X pays attention to green sustainability.
According to the survey data, immediate ownership (33%), green consumption, reducing the negative impact on the earth and society (31%) and trying new brands and new consumption patterns (30%) are the three main consumption styles of the respondents. From the perspective of consumer groups, Generation Z (18-28 years old) pays primary attention to instant ownership and experience, followed by being different (personalized) and trying new things, while Generation Y (29-43 years old) and Generation X (44 years old and above) have in common that green consumption is the primary starting point, and in addition, Generation Y pays more attention to instant ownership and experience. It is noteworthy that high-net-worth individuals with total assets of more than 10 million are keen to buy electronic products and experience cutting-edge technology, which accounts for 33%.
Digitalization has become the engine of China’s economy and is reconstructing the consumption scene. According to the survey data, when consumers are interested in buying a certain product, their research channels are mainly e-commerce platforms/shopping apps, shopping malls/physical stores, live broadcast rooms, short videos and evaluation apps. 80% of the respondents said that the most commonly used purchase channel is online channel, among which e-commerce platform/shopping APP has become their first choice, accounting for 42%. This shows that the epidemic has had a long-term impact on the continuous warming of online shopping trends. At the same time, the brand is constantly promoting the digital transformation and upgrading of enterprises, constantly catering to and continuing consumers’ online shopping habits.
Nearly 80% (79%) said they were willing to share their satisfactory consumption experiences. Three sharing forms, namely "sharing with friends and relatives", "sharing with social media (Weibo/Little Red Book/fan community, etc.)" and "sharing with WeChat friends circle", were commonly used by them, with obvious deep interaction and deep social attributes.
Facilitate the demand, activate the real-time retail trillion track, and lead the quality of life to upgrade.
The outbreak of instant consumer demand promotes the vigorous development of instant retail, which is the product of the upgrading of consumer experience. Instant retailing refers to the service that consumers place orders on the online trading platform, and offline physical retailers carry out door-to-door delivery through third-party (or retailer-owned) logistics. The products provided include food and beverage, fresh fruits and vegetables, digital 3C, beauty care and other commodities, and the delivery time is usually 30-60 minutes. According to the data of this survey, nearly 80% (78%) of the respondents said that instant retailing highly meets the immediate and convenient consumer demand, and that when shopping through the instant retail platform, it can enhance the shopping experience and meet their own consumption upgrading needs (75%).
Judging from the platforms that respondents choose to spend within half a year, the most commonly used ones include: Meituan take-out, JD.COM’s arrival at home, Meituan’s grocery shopping, box horse shopping, hungry, Ding Dong’s grocery shopping and so on.
From the consumption time of instant retail platform, afternoon tea is the most frequently consumed time. Today, afternoon tea has changed from a social way to a way to enjoy life.
From the structure of instant retail consumer goods, it has basically covered all the needs of consumers, showing the change of consumption trend of "everything comes home". More than 30% of the respondents said that they had bought fresh fruits and vegetables (43%), leisure snacks (40%), grain, oil and non-staple food (36%), drinks (34%), meat, eggs and poultry milk (30%) on the instant retail platform.
Real-time retail distribution is still based on traditional human transportation, and unmanned distribution is used as a supplement to distribution scenarios and technical empowerment. More than 10% of the respondents have experienced the unmanned distribution mode.
Category richness and timeliness are the two most important reasons for choosing instant retail platform for consumption. Among the three generations of consumer groups, the first two motivations they choose for instant retail consumption are: Z generation’s "quick delivery" and "being able to buy outside normal business hours", Y generation’s "rich categories and complete varieties" and "online and offline integration of retail stores", and X generation’s "rich categories and complete varieties" and "quick delivery".
77% of the respondents indicated that they would increase shopping on instant retail platforms in the future, providing broad space and motivation for the future development of the instant retail industry. China Chain Store & Franchise Association predicts that by 2024, the size of the instant retail related market will exceed 1 trillion yuan.
How will the metauniverse reconstruct the consumption scene? -immersive experience, real interaction, and a social circle with thousands of people.
The field of consumption is an important scene in the application of metauniverse. Breaking the boundary between virtual and reality will bring more new products, new scenes and new experiences, and will also bring great impact, change and greater development opportunities to the consumer industry. According to the survey data, 79% of the respondents said that the Meta-Universe can help them understand and plant more innovative and high-quality goods, 77% said that the Meta-Universe can make them happy to share their consumption experiences, and 76% said that different scenes in the Meta-Universe bring them more interesting shopping experiences.
Technology Affecting Future Retail: People-oriented
Artificial intelligence-intelligent customer service to solve customers’ worries;
XR-virtual reality, which makes customers immersive;
Cloud computing platform-"goods follow the heart" and "connect with customers";
Digital Logistics: Internet of Things-Pursuing the ultimate "price ratio" for customers;
Flexible supply chain-"what you think is what you get", guiding production with customer demand.
? Research methods:
The research results of "2023 Huoshao Lianying Hurun China New Retail White Paper" come from the joint project of Huoshao Lianying and Hurun Report. This report focuses on the analysis of the current situation of retail industry in China, exploring the changes of consumer demand and trends after the epidemic and the imagination of future retail scenarios. The report answered four questions: What are the characteristics of China’s retail development? What are the core findings of the retail industry through the Hurun list? The change and invariability of consumer demand and trend after the epidemic? Driven by technology, what are the imagination spaces for future retail scenes?
The research methods of the white paper include desk research and special investigation. First of all, the project team fully tapped the research results of Hurun Report for more than 20 years, and relied on the database of Hurun Report’s high-net-worth people to explore the consumption trend of high-net-worth people in China. In the way of special investigation, the project team adopted a combination of quantitative and qualitative research methods to ensure the depth and breadth of the research. The project team invited 6 experts in the retail industry to conduct qualitative interviews and 300 high-net-worth people to conduct quantitative research, and gained a wealth of first-hand information, based on which an opinion output with research value and significance was formed.
