With ONS figures out today showing retail spending slowing both on and offline, UK retailers will need to look further afield to beat the sales gloom – and they will have to use marketplaces to help them gain access to these markets.
In January 2018, the underlying pattern in retail sales, as suggested by the three-month on three-month ONS measure, is one of slow growth with the quantity bought increasing by 0.1%; the lowest growth since April 2017.
Ecommerce saw a slowing in growth from 19.1% this time last year to 9% – this means that ecommerce in January accounted for 16.5% of all retail sales, down from 18% in December.
Brexit uncertainty and imminent inflation rises are making shoppers tighten their belts in the UK, but growth in other regions – especially China – could help retailers out of the gloom.
Chinese New Year is of particular interest. The past year has seen a 38% year-on-year increase in orders for advertisers during the core three day period of Chinese New Year, according to the data insights from Rakuten Marketing.
Delving into the UK market, Rakuten figures suggest that Chinese shoppers generated a 17% bump in completed transactions during Chinese New Year alongside a 37% increase in traffic across travel sector affiliate websites. This suggests the focus on family and friends during Chinese New Year is increasingly about visiting and treating each other with experiences
Analysts at PCA Predict concur.
There is a huge opportunity for UK retailers to capitalise on the Chinese ecommerce market around New year, especially as it is estimated more than a fifth (23%) of consumers in China will make at least one cross-border purchase via the internet in the next year,”
– Chris Boaz, Head of Marketing of PCA Predict
However, retailers need to pay attention, as the report reveals that during the festival consumers aren’t looking for any old brand, with orders made to luxury and high-end stores shot up by 32% around Chinese New Year, affirming more premium purchase interests from these audiences.
“It’s crucial to remember these global sales moments are both a time of heightened demand and competition,” comments Mark Haviland, executive vice president at Rakuten Marketing Europe. “Brands must use insight to ensure they get in front of the right global audience segments, with the right message on the right channel.”
One of the key methods for tapping into the Chinese market is to leverage marketplaces such as Alibaba. For brands and retailers, marketplaces offer an ideal way to overcome cultural, language and even logistics issues and provide a rapid point of entry into new markets.
Perhaps, while waiting to see how Hard Brexit and wealth of new territory trade deals that Britain will be “at the front of the queue for”, retailers and brands should tap into these new markets using their own initiative. Worth a try: next month’s ONS figures are unlikely to provide any cheer.
