Afternoon tea market promising in China

Prospects for China’s afternoon tea market look promising, with young women aged between 18 and 24 continuing to be the main consumer group, according to a recent report released by Chinese e-commerce giant Alibaba Group’s local life service company.

With demand for afternoon tea exceeding supply, the market continues to grow, the report said. Citing data from Eleme, Alibaba’s flagship takeaway-order app, the report showed that the number of afternoon tea business owners in March 2021 increased by 33 percent year on year, while the market saw the highest net profit growth of 57 percent.

Geographically, afternoon tea orders in new first-tier cities and second-tier cities accounted for 52.5 percent of the total nationwide, while the orders grew at an average rate of 35 percent in cities below due to soaring demand.

Customers are also paying more for afternoon tea. The average transaction value increased from 28.9 yuan (about $4.52) between July and September 2019 to 30.8 yuan in the same period in 2020.

The top seven choices for afternoon tea are bubble tea, juice, fried chicken, coffee, desserts, braised food, cakes and pastry, and fruits. Out of all of these options, bubble tea was the favorite of most consumers.

In terms of customers’ most popular combinations, bubble tea and juice pair well with desserts, while cakes and pastry are suited to coffee, and braised food lovers prefer to try it with fruits.

Technologies bring retail revolution

Smart retail, partly represented by new advances such as unmanned supermarkets, mini-program shopping and virtual fitting rooms, are offering consumers a variety of personalized products and services.

E-commerce is a form of smart retail that requires a keen understanding of what consumers need. Driven by big data technology, e-commerce platforms can remember consumers’ habits. Based on this information, they can offer recommendations to them when they shop online, enabling them to directly come to the goods they are about to buy without having to search for them.

A POS (point-of-sale) kiosk by Hisense is seen at the Retail’s Big Show 2020 in New York, the United States, on Jan. 12, 2020. Equipped with cutting-edge products and innovative services, a group of Chinese companies made their presence at the annual retail expo this week in New York, with ambitions to tap into the U.S. market with smart retail solutions. (Xinhua/Wang Ying)

For instance, on opening a mini-program on the instant messaging app WeChat, a consumer surnamed Zhang from Shanghai was recommended a kind of fruit tea she often bought on the app. After placing an order, the drink arrived at her doorstep half an hour later.

There are three kinds of players providing smart retail solutions – internet companies, software and service providers, and traditional retail enterprises, according to Bai Feng, Vice President and CEO for Smart Retail at BOE Technology Group Co., Ltd., an IoT company that provides intelligent interface products and professional services for information interaction and human health.

Experts believe that the retail sector can provide personalized services for consumers through behavioral analysis with the use of big data. At the same time, by using the results of the behavioral analysis to improve procurement and delivery, the retail sector can achieve flexible and efficient production and supply at much lower cost.

Smart retail could not have been realized without the help of artificial intelligence (AI) technologies such as computing vision algorithm, big data analysis, robots, and voice recognition. Many department stores and supermarkets have realized digital intelligence with the help of such technologies.

A department store in Chengdu, southwest China’s Sichuan province, has launched a smart parking app that efficiently guides vehicles to unoccupied spaces through a three-dimensional navigation system.

Technologies play a key role in realizing these scenarios, the first being the construction of internet infrastructure, including the popularization of 5G technology and the Internet of Things (IoT), said Bai. The processing ability of big data and algorithms for optimization, as well as the popularization of the hardware and software equipment are also important, he added.

Today’s smart retail is no longer just about customer flow or sales volume, but has become highly intelligent both online and offline. When it comes to physical stores, smart retail boasts precise decision-making and higher operation efficiency.

Leading Chinese retail company Suning Holdings Group has been making constant efforts to achieve digitalization of the supply chain by accelerating technology-backed transformation and increasing technological investments.

“Traditionally, it took us about three hours to distribute parcels from one warehouse, but now we spend only three to five minutes on average handling each parcel, and can handle 2,000 parcels an hour at full capacity. This optimizes inventory structure, accelerates circulation of parcels and lowers the incidence of goods being stuck,” said Jing Wei, Suning Technology Group’s vice president.

“In smart retail, the business owners do not operate based on how they feel or according to their experience,” said Lin Yuanqing, founder of Aibee, an AI company that focuses on applying digitalized and intelligent AI solutions to the physical world.

Lin further noted that intelligent technologies can help avoid inaccurate and inefficient data analysis, which means they no longer confuse salespersons with customers, but reflect the flow of customers in a more precise manner. In addition, all goods on the shelves become traceable, including their basic information and when they are sold.

An electronic price tag developed by BOE has been adopted by some supermarkets in China. By scanning the QR code on the price tag, consumers learn more about the product, and are guided to the store’s online market.

Experts pointed out that the digitalization of every link in smart retail creates great value as it helps operators understand consumers’ behavior, manage their production according to demand, and adjust the supply chain and the manufacturing process.

Customized goods thrive online in China

Customized products, ranging from T-shirts, mobile phone cases, headphone boxes and hand bags to mugs, pillows and key rings, have become increasingly popular among Chinese consumers on various e-commerce platforms.

Retailers offering customized goods on Taobao(Photo/Taobao.com)

Last year saw the emergence of a new market worth 10 billion yuan — the production of customized goods based on pictures provided by customers. Taobao, a major online shopping destination in China, is home to more than 100,000 retailers offering customized goods and 10 million kinds of these commodities.

“Even a niche market of mobile phone data cables with personalized patterns can be filled on our platform,” said Zhang Rui, head of the enterprise services division on Taobao.

Buyers of customized commodities can be divided into two categories: small and medium-sized enterprises or individuals. The first type of consumers usually order such products for large-scale activities such as new project openings, team-building events and annual meetings, whereas individuals place orders for graduation ceremonies, birthdays, weddings and other important occasions.

In addition to small items including mugs, calendars and pillows, customized products also involve fields such as clothing, wedding planning, automobiles and home decoration.

On an online garment customization platform, users can carry out clothing customization through the following procedure: first, select specific information such as fabric, collar type and cuff requirements , and then enter the height and weight data. They can then receive their personalized clothes within 15 working days after successfully placing an order.

“I have a great sense of achievement when I receive my clothes whose design I participated in. They fit me very well, and are very comfortable to wear,” commented a consumer on the platform.

“In the past, most buyers chose conventional styles, and the customized patterns were relatively simple. However, now they have more ideas and tend to communicate with designers multiple times in order to enhance the design,” explained Wang Hang, head of an online store that opened 14 years ago and provides custom-made clothes on Taobao.

High consumer demand for personalized products has also facilitated the upgrading of sellers’ services. Wang disclosed that his store now needs to employ more designers than before and has to use more advanced manufacturing equipment in order to reach the higher standard of craft requirements for customization.

Smart fitness facilities make exercise fun

Smart fitness facilities in parks and gyms across China are making exercise more fun and science-based and helping people enjoy exercise in a healthier way.

The smart running track in a park in Honggutan district in Nanchang. (Photo/Xu Yuting)

Honggutan district in Nanchang, capital of east China’s Jiangxi province, recently opened its first smart running track in a park to the public, attracting many exercise enthusiasts. Mr. Wang, a native of Nanchang, is one of them, and said that he felt very comfortable running on the track.

The 800-meter long track can record runners’ speed, steps, running distance, and calories burned. The track is also equipped with supporting smart facilities, such as smart screens, facial recognition equipment, and smart lockers, delivering a smarter and more convenient experience for runners.

The equipment of the smart running track in a park in Honggutan district in Nanchang. (Photo/Xu Yuting)

Smart facilities installed in many parks in Shenyang, capital of northeast China’s Liaoning province, not only display real-time exercise data but also offer users instructional videos.

Similarly, smart facilities installed in gyms and sports centers in Hangzhou, east China’s Zhejiang province, allow sports lovers to make reservations on WeChat mini-programs, enter sports venues using facial recognition, and save users from having to queue up for sports equipment.

Experts noted that as a novelty, smart facilities will boost enthusiasm among a wider range of people for sports and help them do exercises in a more scientific way.

Some enterprises have offered smart solutions for the construction of sports parks. According to Wuhan Haokang Fitness Equipment Co., Ltd. in Wuhan, central China’s Hubei province, smart fitness equipment in a sports park can collect users’ exercise data, detect inappropriate habits while doing sports, and offer instructions accordingly, so as to help them exercise correctly and avoid injuries. The company’s smart solution won the silver award for smart outdoor sports equipment at the 2021 China International Sporting Goods Expo, held in Shanghai from May 19 to 22.

The smart fitness industry enjoys bright prospects, according to a report on people’s exercise and consumption in 2021 conducted by China Sporting Goods Federation. The report shows that there is high demand for smart sports facilities, and consumers are willing to pay for them. Meanwhile, 89 percent of the respondents believed smart fitness facilities are necessary, while nearly one third of those surveyed have spent money on the relevant facilities.

According to a document issued by China’s General Administration of Sport in March, the country will build a number of smart sports centers and sports parks with smart outdoor fitness equipment.