China’s fourth-largest retailer, Suning Holdings Group, has revealed its strategy for 2020, with plans to invest at least RMB40 billion (USD5.7 billion) next year in new technologies, logistics and 10,000 new stores.
With this move, the consumer electronics specialist with growing ambitions in food, health & beauty and apparel, aims to enhance its shopping experience to cater to the new generation of Chinese consumers. The emergence of new, more aspirational and affluent shopper groups, along with growing purchasing power in China’s lower-tier cities, drives a “consumption upgrade” in the country, creating attractive opportunities for international brands to tap into the growing base of newly addressable population and maximize customer lifetime value. Alibaba recently announced a new focus on its growing customer to manufacturer (C2M) business to help with consumer demand.
Brands looking to pursue differentiated distribution strategies beyond shopping festivals with their often-short-lived effects should partner with Suning to drive scale, particularly in lower-tier cities. As Suning pushes O2O integration, automation and experiential retail in its extensive portfolio of brick & mortar stores as part of its “Smart Retail” concept, brands must be ready to support with tailored online content, suitable packaging, and innovative merchandising.
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