Part 6: The popularity of food and retail “experiences”.
Chinese urbanites are enjoying a wide range of innovative and experimental retail opportunities.
Consumers in China are of course attracted to new products and competitive pricing in the retail sector — but they’re also seeking out new experiences in both food and retail. Brands and retailers have been only too happy to oblige. In Chinese cities today, consumers can enjoy a plethora of innovative and often experimental retail experiences.
Shanghai is considered ground zero for the launch of experience-based stores by global brands. For example, Nike launched its first House of Innovation in Shanghai, not New York. The Chinese city was also chosen for the launch of Starbucks’ second large experiential store, The Roastery, shortly after it opened the first in its hometown of Seattle.
“China is going to have more impact and grow faster than anything we’ve done in our history,” said Starbucks chairman Howard Schultz at the Shanghai launch. “And what we have seen in Shanghai with The Roastery not only gives us confidence but demonstrates the opportunity to be even larger than we once realized just a year ago.”
Several other operators have spotted this opportunity, too, and have set out to redefine the concept of shops, restaurants and food spaces. Some global brands are even experimenting with concepts that may be too risky or off-brand in their home markets. Technology-based stunts often drive this approach — like Pizza Hut’s robot-serviced restaurant, PH+, where robot waiters welcome diners and lead them to touch-screen tables, where they can design their own pizza toppings by dragging and dropping digital slices.
Other global brands have seen China as a testing ground for new concepts — such as KFC’s nutrition-oriented K-Pro stores, which are decked out like greenhouses and offer seasonal salads and juices, not fried chicken. This concept debuted in 2017, and uses cutting-edge technology such as Alipay’s “Smile to Pay” system, which relies on facial recognition.
Leading domestic brands have also emerged in this innovative environment and are looking to put China on the global map of food experiences. Seesaw Coffee, a specialty coffee chain founded in Shanghai, hopes to establish the reputation of Chinese coffee among connoisseurs, and has pioneered the use of beans from the southern province of Yunnan. “The coffee scene in China only really took off five years ago,” says Tom Zhong, founder and CEO of Seesaw Coffee. “It’s humbling to see that Chinese brands are starting to be considered and recognized globally. We are very proud that Seesaw is the first Asian coffee-shop to be invited by La Marzocco to run a pop-up store in Portland.”
Meanwhile, as China’s megacities grow denser and living spaces get smaller, the desire to spend time in “third places” will likely grow. According to IKEA’s 2018 Life at Home report, there has been a big increase in the number of people who say they feel more at home in places other than their residence. In fact, 35 percent of people feel more at home outside the home, and this figure has risen sharply in urban areas. Similarly, a report by Youthology, a Shanghai-based research company focused on Chinese youth culture, indicates that convenience stores like 7-Eleven and Family Mart provide an important “extra space” outside the home, and serve as “private spaces in the public to soothe empty stomachs and souls”.
Families with young children also welcome the extra space offered by food retailers. “In a city like Shanghai, there are few parks and it is not easy to do outdoor activities, but we want our kids to be out of the home too,” says June, a mother of two. “We are always looking for new places to eat, to play, and to do interesting activities for the entire family.”
Shopping malls and shops are rethinking their role in the age of e-commerce and food delivery, which has spawned a new breed of food-space-as-a-service concepts. Entire floors of shopping malls are dedicated to families with young children, where a range of food-oriented retail concepts can be found, from kitchen apparel to children’s cooking classes. For instance, Ant and Grasshopper is a pedagogically-designed playground located in a healthy French-inspired restaurant, while DayDayCook is a “cooking lifestyle” store, where friends can gather to take cooking classes, and eat together afterwards.
This is a 12-part series on Food Megacity: how urbanization and technology are changing the way China eats. The full series can be found here.
