Flash back on the 8 week ReStart Live Series

Today,  Conversation Highlights of the 2nd LIVE: “Covid19 vs Retail Renovation : The Asian Response” with Intersport and Suunto, which took place April 15

  “Covid19 vs Retail Renovation : The Asian Response”  

“ Asia is already the second biggest sports market in the world and will overtake the USA, and now with COVID-19 and its different impacts, it might be even faster ” ROBIN TREBBE – MANAGING DIRECTOR CHINA & APAC, INTERSPORT

Among the top ten countries considering the sport market size (in B$), four of them are in APAC (China, India, Japan, Korea). “These markets will grow over the next years and APAC is definitely the place to be for sports. All the big sports event from 2018 Winter Olympics in Korea, 2021 Tokyo Olympics (now cancelled), 2022 Winter Olympics in China, all the biggest sports events in the world are happening in Asia actually”

In China, Sports retailers share price went down 36% when Sports brands took a -27% drop in the first quarter of 2020. “It’s interesting that retailers suffer more from the crisis than brands. That’s not really surprising, brands are strong at e-commerce and have a certain brand equity”

But in parallel, consumer confidence in the economy recovery increases. “What is interesting on an APAC view is that the consumer optimism came back. Just recently there was this research, we see that only 5% of people in China are pessimistic and think that Covid-19 will have a long last impact on the economy. In China, almost 50% are optimistic, it’s quite similar in India and Indonesia but different elsewhere in APAC. It’s different because China is in a later stage”. Consumer optimism likely tracks the stage of Covid progression.

This reflects also in the media consumption which is a good indicator. In China, during the lockdown, TV consumption increased from 1.5 to 7 hours per day, and social consumption increased from roughly 2 to 5 hours per day. [This is the way forward] to connect with consumer, increase brand loyalty, livestreaming to be used as a ‘new’ way to sell”

What kind of opportunities have been leveraged in China?
One of the biggest impact might be the shift from offline to online. It’s not a short-term but a long-term trend. My parents don’t shop online but they learned to shop online because they had to and they find it quite convenient“. The online channel was already the biggest one in terms of sales share in China, and it will continue to grow with the influence of the Covid. Focusing on the sports industry, some categories won a lot (boom in virtual training classes, gym goods). Why ? Because “people want to be ‘productive’ and what can they do at home, sports“.

“It’s no longer a convenience to buy online, it has become a necessity; this necessity is going to become a behavioral pattern. I can guarantee you, people don’t change behaviors. Once they get rewarded for it or they start realizing that it’s working for them“

APAC e-commerce landscape is dominated by a few players and the most important ones are the Chinese homegrown platforms, Alibaba Group and JD.com, which represent 1,4 Billion active users over the 1,9B in the APAC region. (Alibaba represent 950 Million alone, JD has 352M, Amazon, 200M, Rakuten 111M, Tokopedia, 90M, Lazada, 50M, Naver has 42M, and Zalora, 26M). “On e-commerce platforms, consumers traditionally purchase lifestyle products, premium products, consumer electronics. Since the lockdown started in China, and APAC soon after, there’s been a purchasing boom on these platforms“

The wearable industry is a massive market in the APAC region where the sports wearable market plays an important role. (Details per country at 11”34).

“In the sport industry, apps have become a very integral part of the ecosystem that is evolving now worldwide. In the entire sports app market, 315 Million consumers come from China. That’s a massive whopping number in today’s world with the COVID-19 situation. How we can leverage these apps will become even more powerful and interesting“

“In 2019, the wearable market grew by 89%, but with the covid situation, 2020 predictions are that the market will only grow by 9%. Indeed the supply chain of this market is mainly supported by China. We are still going to have some serious headwinds to deal with. And that’s why it becomes even more critical how we spend our money”.

“On the wearable market, more consumer are looking for smart products. In the online context, the ‘smart’ word is going to play heavily in our strategy because the devices became smarter, and retail shopping is going to take a big chunk of the market” (Details about wearable market forecasts from 18”10 to 20”10)

Asian e-commerce platforms such as Lazada for instance understood these consumer crisis needs… “Platforms have moved their attention to what a consumer is actually asking whether it’s masks, sanitizers or food products (…) Lazada is now inviting SMEs to come and sell online encouraging them to come at the forefront where consumers can avail their products without charging.”

“ As a brand that is more digital, it is actually the perfect time to accelerate consumer acceptance of the digital world. Consumers are not going to walk into the physical space so fast, so look at the options available to create awareness and conversion online. It’s priceless because during the next 90 days, you won’t need to split your investment between online and offline channel.”

>More detail about consumer journey : 51”12→ 53”20




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