Entrance at a HEMA in Guangzhou

Our team went to China for consumer, brand and retail immersion. We’re not new to the international retail scene but there is so much press about China, we were more excited than usual. We visited HEMA in two different cities.

HEMA is a Chinese retailer, owned by Alibaba. It’s part of Jack Ma’s “new retail” strategy. “New retail” blends online and offline. But what struck me as interesting is that the store is strikingly analog. No digital screens in stores, no one really on their phones (surprising in China), people just shopping regular products. I’ve been reflecting on our visit to HEMA for a few days now.

What was interesting is the selection of live seafood and the multiple little restaurant stations.

I met up with a local friend who said he will either order food online and get it delivered or go into the store, pick out his food, select ingredients and have HEMA make it and deliver it to his house. I went to the one in Guangzhou on a Saturday and the one in Shanghai on a Friday.

In Guangzhou, the eating area was full, families eating, selecting live seafood and lots of hustle and bustle.

When people check out, they still wait in queue, scan their QR payment code and bag their food.

If you want to pay cash, there is a cash station. Although we used WeChat and Didi, we couldn’t sync up our Alipay or WeChat payments since none of us has a Chinese bank account. Needless to say, we waited in the cash payment line. We were later told only old people pay cash.

So what’s my takeaway? From a tech standpoint, the biggest one is that Jack Ma’s team is just trying to remove friction for the customer. He is making the experience simpler. It seems like most US retailers are on the path to adding more, not less.

It is nicely designed store with ample assortment. There are a variety of dine-in options (mini-restaurants) driving traffic and energy levels. The stores are bustling with people eating and shopping. The stores are smaller and more intimate, feeling easier to navigate and shop. The two we visited were in malls likely helping that traffic flow.

As much as we tried to live and behave as insiders, we were really outsiders, not plugged into the Chinese fabric. But even still, it didn’t seem like Ma was doing anything crazy and out of the ordinary. He is putting the customer first and focused on where he can eliminate pain in the shopping process or journey.

Amazon says they do that but if you’ve shopped their Amazon Books, that’s arguably not the case. They make people do more things with their phones that are additional steps that don’t add value.

So I would say U.S. retail has work to do in order to build around the customer (except Starbucks and maybe Apple). Btw, I’m not blind to the fact that Ma created a nice concept with a beautiful, simple design at a time when some of the other players’ efforts are dated.

In this case, my advice would be to not overcomplicate your efforts to drive your retail business. It’s not always about what you add. Sometimes there’s more power in deciding what to remove.

If you want to chat more about this, just shoot me an email, I’m open to debate: raj.shroff@pinesd.com.

The PINE team has been spending some time in China. In our industry there is a lot of press and discussion on China. Alibaba, Ten Cent, Bingo Box, 1.4 billion people, cashless society and more.

We had been to China before but hadn’t seen the most recent changes. We decided to invest in ourselves and make the trip. If we aren’t willing to invest in ourselves how do can we sit across from clients asking them to invest in working with us? And if we don’t have rich experiences at a global level how will the work we are doing be the best possible for our clients? Somewhat rhetorical questions but you get the point. We lined up dates, found an Airbnb and bought our plane tickets. We knew the experience would take us out of our comfort zone, stretch us and help us grow.

For those who don’t know us, we are consultants. We advise brands in the areas of research, strategy and design; adding value that drives their businesses. We know consultants’ outputs are only as strong as their inputs; experiences, projects and problems solved. The answers and inspiration to impact a business aren’t on Google, they are not in the news and they are definitely not on social media.

So far, we’ve spent time with locals, business heads and old b-school friends and have tried to weave ourselves into the society during our stay (breakfast at Family Mart), with one of us indulging in the local delicacy of Chicken feet. All the while staying on top of our project work (the beauty of a connected world).

We even got the chance to facilitate a research session with an MNC exploring the Chinese Post 95 (those born after 95) consumer. The China they were born into is vastly different than previous generations.

We still have plans to spend time with some expats living in Shanghai, visit some more local Chinese retail and go to Hangzhou to visit the headquarters of Alibaba. Expect to hear more from us on what we have learned and if you have anything you think we should check out before we leave definitely let us know.

Btw, none of us has had the guts to try pig snout.

I am writing this from Shanghai, actually sitting in an Indian restaurant, enjoying some free wi-fi. The lunch crowd has disappeared, the techno music is still blaring, it feels more like my private club now, not a buzzing restaurant. I love Chinese food but after a week, needed a little spice.

I spent last week in Guangzhou and got to check out a newer mall called K11. Having traveled the world and seen lots of high end retail, I was surprised and impressed by the store designs in this mall. At the top of my list was this bookstore, still working on the name.

It was buzzing with shoppers. This store seems new, modern and exciting.

Compared to this, the Amazon Books I saw a few weeks ago in NYC is a dull relic of the past, a Barnes & Noble 1.5.

This bookstore is analog. No bar codes to scan, no member prices to be redirected to. Sure, you can pay quickly, you just use one of the payment apps, no big deal, no fuss, no press releases about their amazing technology, its just the ecosystem here.

The store has a fun kid’s space, a café, an art studio, a plant store and several other small shop-in-shops.

Definitely glad I stumbled upon this gem. And hope this provides some inspiration to my designer friends. Stay tuned for more observations, lessons and thoughts from China. RBS.