
I’ve always had a love hate relationship with shopping. On one hand, I’m female and genetically programmed to want to accumulate a vast assortment of wares. On the other hand, my need for efficiency and quick decisions, and low tolerance for crowds is always at constant odds with the general experience of traditional shopping.
But that was before I started working in retail and learned of visual merchandising and productivity per square foot and assortment planning. Now every trip to any retailer is filled with learning. And nowhere more so than in China. I’ve been continually surprised (and often delighted) by retail here. Though it may appear on the surface that many of the same rules may apply as in North America, dig a bit deeper and what looks the same is actually run quite differently.
I’ve learned through exploration so in turn, here are 7 of my favorite and most telling Retail discoveries to share with you:
Starbucks - “retail to be seen”: When most people think of Starbucks, they think of a fast coffee concoction first, and warm inviting place to type up that essay afterwards. Not so in China. When last reported in 2008, over 90% of Starbucks purchases were being made to be consumed in-store. The US number was only 20%. Though I’m sure that figure has come down slightly, most people in the industry here believe it’s still around 80%. And that’s because Starbucks is a luxury brand in China. And you want to be seen sipping one of their fashionable offerings. It’s a sign “making it”.

IKEA – “retail to be lived”: When my husband and I walk into an IKEA, some rooms are so inviting that we can almost imagine living there – those inviting beds, those perfectly arranged living room settings. Well, in China, consumers don’t stop at “almost”. IKEA has been well recognized as being on the forefront of reimagining retail, with their artfully done showrooms effortlessly bringing vision to life. And inspiring millions in the process. When they expanded to China, they had similar ambitions, particularly as a company known to excel in small spaces, such as the ones Asian consumers face. But what they’ve seen so far is consumers treating the stores like an escape-from-reality themepark than a store. Countless families descend on these stores each day, to enact a degree of retail entertainment few had envisioned. In the beds, people are fast asleep. In the living rooms, families have spread out meals they’ve packed from home. The professional merchandised showrooms are used as backdrops for personal photoshoots. So while IKEA is currently remaining patient and waiting for these consumers to stop “escaping” and start “consuming”, for the meantime, retail here has taken on a life of its own.
Apple – “retail to be experienced”: Countless articles have been written on Apple, particularly their success in China, but it’s really hard to appreciate if you’ve never seen it firsthand. We live about 2 blocks from one of China’s 5 locations and there hasn’t been one time day or night, weekday or weekend when this store hasn’t been straight out packed. And I don’t mean, oh no, all the iPads are currently being demo’ed and I need to wait 2 minutes for someone to move on. I mean, get your elbows out if you mean to make any progress through the store. And I’d love to see some tests on the decibel levels of these stores. Truly ear-splitting enthusiasm for a brand and products that mean premium and the ultimate in desirability.
Taobao/myPiao/CTrip – “retail on delivery”: For those of us addicted to the convenience and choice afforded by online shopping, it’s easy to forget that once we were all very skeptical of giving our credit cards information to the mystical beyond. Well, in markets like China where there are legitimate concerns with providing payment information online, companies have innovated to allow for cash on delivery. Countless retailers offer this, from Taobao, China’s Amazon to myPiao, a Ticketmaster equivalent, to CTrip, the leading provider of airline and hotel arrangements. Retailers here have had to adapt their business models to accommodate security concerns, as well as consumers wary of paying for a certain product online and receiving a swapped, lower quality/ counterfeit product upon delivery. Payment in cash on delivery serves to alleviate many of these concerns and facilitate the rapidly growing online marketplace.

Luxury pop-up stores – “retail anywhere”: Go to any major commercial area in a top city and you are guaranteed to see event marketing on a scale you’ve never seen before. Every week, in the center of the Grand Gateway mall in Shanghai there are countless (usually luxury) retailers clamoring to erect a massive yet temporary shrine to their brand. These glossy, high profile showrooms usually employ an army of models and provide some sort of interactive element – whether a fashion show or a museum-like foray into the history of the brand. It takes the retail experience out of the stores and into the streets.
adidas/Nike – “retail everywhere”: I’ve mentioned before that distribution is key, particularly beyond the key Tier 1 cities of Shanghai, Beijing and Guangzhou. But few foreign retailers have managed to do what the sporting goods leaders of adidas and Nike have done, each boasting 6000-7000 stores across Tier 1-6 cities. This is no small feat and has required skillful partnerships with local franchisees to ensure the brand experience is preserved while expanding rapidly. Not perfect by any means, but they’re getting experience in Tier 4-6 business models while others are sorting out how to expand in Tiers 1-2.
Street retail – “retail for the masses”: Big brands aside, China’s retail still belongs to the merchants in and on the street. Often called high frequency for their impressive inventory turns amidst shoebox size store footprints, these retailers are truly closest to consumers trends and needs. Offerings in the food stalls change continually with the seasons and festivals. Apparel fashions are replicated and replaced with a speed that would impress “fast fashion” retailers such as H&M and Uniqlo. Important lessons on productivity, consumer demand and evolution all start here.
And for a bonus:
Fake retail – “retail to be replicated shamelessly”: Most of you will have heard of the fake Apple stores found earlier this summer in Kunming, a city in southwestern China that otherwise does not have access to the same caliber of brands as Shanghai or Beijing. But that was just the tip of the proverbial LV branded iceberg. Fake IKEA stores have been found operating under the similar name of “Shi Yi Jia Ju” (vs. IKEA’s Yi Jia Jia Ju). From the yellow and blue branding to the minimalist furniture outfitting mock showrooms, really the biggest difference has been the menu in the cafeteria, where Swedish meatballs have been replaced by Chinese braised minced pork. And still that’s not it. Fake Starbucks, McDonalds, KFCs to fake Disney themeparks. To ignore the fake retail market, both in goods and stores, is to turn a blind eye to the very motivations that drive retail today: consumer desire and the innovation to meet those demands.
Retail in China is one of the most fascinating industries to be working in today. Even as a consumer you can’t help but be amazed by the fast and furious evolutions. If you really want to see the innovations happening in the Chinese retail landscape, look beyond the inescapable wall of gleaming, bright shopping malls and past the lively, dimly lit local shops that line every street. Look into each little ecosystem of commerce and you’ll see how retail is being reinvented every day.