DIpil Das
New Retail Briefings
What’s New in New Retail
Beyond Meat Enters Chinese Supermarkets Los Angeles-based Beyond Meat made its first foray into China’s supermarket sector by partnering with Alibaba’s Freshippo. The company launched its flagship Beyond Burger product—a plant-based meat burger that has similar texture and flavour to a meat patty—in 50 Freshippo stores in Shanghai in the first week of July 2020. The brand has plans to expand to other cities in China, such as Beijing and Hangzhou, in September. Beyond Meat will leverage Freshippo to provide a seamless, online-to-offline platform to reach consumers. The supermarket chain is known for its 30-minute delivery services for online orders, self-checkout kiosks and mobile-first strategy—shoppers can use their phones to access product information by scanning items. Approximately 60% of Freshippo’s gross merchandise volume comes from online purchases, according to the Alibaba Group’s fiscal year 2020 results, published on May 22, 2020. To better cater to Chinese consumer tastes, Beyond Meat stated that its Beyond Burger is not just limited to burgers, but can be adapted for use in Chinese recipes such as fried rice, noodles and dumplings. [caption id="attachment_113587" align="aligncenter" width="700"]
Beyond Meat’s plant-based dumplings Source: Alizila [/caption] Coresight Research insight: Beyond Meat’s China strategy is well positioned for Chinese consumers’ pursuit of a healthy lifestyle: In recent years, consumers have become more passionate about staying healthy, and the pandemic further accelerated this trend. According to a survey of Chinese consumers published by McKinsey in June, over 70% of respondents said that they wanted to spend more time and money buying safe and environmentally friendly products. The same survey revealed that approximately 75% of respondents plan eat more healthily after the crisis. Gas Bijoux Opens a Flagship Store on JD.com On July 3, 2020, French jewelry brand Gas Bijoux opened a flagship store on JD.com, selling earrings, rings and bracelets. The company stated that all the products are handmade in France, and gift packages and boxes are imported from France as well. Chinese consumers think highly of French-made jewelry products, as they often associate France with classic and elegant styles. [caption id="attachment_113588" align="aligncenter" width="700"]
Oliver Gas, CEO of Gas Bijoux, recorded a video to celebrate the launch of the brand on JD.com Source: JD.com [/caption] Many luxury brands turned to digital channels to sell their products during the pandemic, as brick-and-mortar stores were temporarily closed—a trend that has continued post crisis. JD.com reported that more than 40 luxury brands joined the platform between January and mid-June. Meituan Launches Community Group-Buying Platform Youxuan On July 7, 2020, Chinese food-delivery platform Meituan launched a community group-buying platform called Youxuan, which literally translates to “best pick”. Youxuan sells fresh food including fruit and vegetables, as well as alcohol and other beverages. Youxuan has already launched its service in Beijing, Dongguan, Guangzhou, Jinan, Shanghai, Shenzhen and Wuhan as of July 15. The working model of a community group-buying platform usually centers on a group of residents who live in the same residential compound. Youxuan recruits a community leader from a compound, who then creates a WeChat group with residents from the same community and regularly posts product links in the WeChat group. Consumers click the links to be directed to Youxuan’s WeChat mini program and can place orders there. Youxuan staff will deliver the orders to the designated collection point the following day. [caption id="attachment_113589" align="aligncenter" width="383"]
Youxuan WeChat mini program Source: WeChat [/caption] Coresight Research insight: Grocery demand increased during the coronavirus pandemic due to stockpiling trends and reduced use of food-service businesses. The pandemic also led to growth in online grocery shopping as consumers were required to stay at home under government measures. According to China’s National Bureau of Statistics, online food sales increased by 32.7% in the first quarter of 2020, compared to 24.6% in the same quarter last year. Appendix: New Retail Developments New Retail developments in China are listed in Figure 1.
Figure 1. New Retail Developments in China: Last 12 Months [wpdatatable id=348 table_view=regular]
Source: Company reports/Coresight Research Investments and Acquisitions in New Retail To expand New Retail abilities, Alibaba, Tencent and JD.com have invested in logistics firms, online marketplaces, content-creation companies and even brick-and-mortar stores. See selected transactions in the following tables.
Figure 2. Alibaba New Retail Investments and Acquisitions: Last 12 Months [wpdatatable id=349 table_view=regular]
Source: Company reports/Coresight Research
Figure 3. Tencent New Retail Investments and Acquisitions: Last 12 Months [wpdatatable id=350 table_view=regular]
Source: Company reports/Coresight Research
Figure 4. JD.com New Retail Investments and Acquisitions: Last 12 Months [wpdatatable id=351 table_view=regular]
Source: Company reports/Coresight Research