The Chinese Retail Market: Pop-up Stores and Massclusivity

There was a time in New York, a couple of decades ago, when new music clubs tried out a somewhat unorthodox technique to lure in customers. On Friday and Saturday evenings, the DJ would play music so loud it made the entrance doors pump to the beat, while right outside the club gorgeous Ferraris and Lamborghinis filled the street. Surely, queues of curious partygoers formed in front of the club, but when trying to go in, they were told the club was full and to come back another time.

In reality, the club was empty and those fancy cars outside were just rentals for show. It was all part of a marketing technique which, as you may suspect, proved to work perfectly when the club actually opened its doors to the public.

While this technique is questionable, if not plain wrong, it does teach us one thing which many in retail are acutely aware of: exclusivity is attractive.

Developments in the Chinese market

In a country containing such a vast population with a newly emerging middle-class, exclusivity is especially magnetic. While long queues are generally associated with inconvenience, in China queues generate curiosity and excitement.

Pop-up stores, which are a textbook example of hunger marketing, fit such a consumer culture perfectly. Delivering on the ‘fear of missing out’ and providing customers with a unique, limited-time only experience, it is in their nature to create excitement and a sense of exclusivity.

This match made in heaven between Chinese consumer culture and the pop-up phenomenon is one of the reasons why pop-up stores have been on the rise in China. In fact, the compound annual growth rate of pop-up retailing has exceeded 100 percent since 2015 and estimations tell us that by 2020 over 3,000 pop-up stores will have been launched in China.

Moving towards massclusivity

What we are seeing in China, and across Asia in general, is actually a movement from ‘masstige’ to ‘massclusivity’. Whereas the former is about infusing mass-market products with prestige elements to give more consumers a taste of luxury, the latter is a form of premium consumption. It is about making the truly exclusive available to everyday consumers.

With masstige consumption becoming more commonplace as millions join emerging middle-classes, massclusivity is the new innovative. It is no longer about products and services that are slightly better, but displays of taste and sensibilities, exclusive locations, rare and unusual experiences.

In recent years, as brands have been responding to these opportunities for innovation, massclusivity has been showing its many faces.

• For China’s Tmall.com’s partnership with New Zealand Trade and Enterprise which enables Chinese consumers to order fresh seafood from New Zealand, massclusivity means the-extremely-hard-to-access delivered to the doorstep in short notice.
• For US-based Vogmask, which collaborated with Chinese body painting collective Face Slap, to launch a fashionable pollution mask, massclusivity meant stylish functionality.
• Offering a luxury-goods shopping experience at discounted prices and including a theme park with Silk Road-inspired architecture, a gallery and an outdoor theatre, Suzhou Village by Yang Cheng lake defines massclusivity as experiential and intriguing retail spaces.

What massclusivity can mean for your brand is something that can only be discovered in practice and the pop-up is a great way to find out.

Launching a pop-up store in China

When entering the Chinese market, pop-ups are a way to test the waters. Although temporary, they leave a long-term, lasting impression with your audience. In case your brand already has a presence in China, pop-ups are still an attractive way to display the latest product lines, explore new locations and engage millennials.

If you’re thinking about popping up in China, here are four things to take into account:

1.Working with malls

It is important to know that unlike in the US and the UK where pop-ups are often on the street, pop-ups in China are mostly set up in malls because of strict regulations. This works to your brand’s advantage.

Shopping malls attract high foot traffic and the right demographics. They offer convenient setups and have facilities already in place. Furthermore, as pop-ups are increasingly recognized as benefiting the malls, mall owners are more than willing to work with your brand. In addition, China has an abundance of malls. Increasing at a rate of over 600 malls a year, an RET report predicts that by 2020 there should be as many as 10,000 shopping malls in China.

2. Entering the market as a foreign brand

If you wish to set up a pop-up store in China as a foreign brand, it is good to be well-informed about China’s regulations. If your brand aims for direct sales, but does not have a corporate presence in China, it is possible to engage in sales through partners, distributors or agents.

If direct sales are not the main objective, a pop-up store can also serve to simply reach out to Chinese consumers and enable them to experience products. If samples are sufficiently enticing, consumers can always place orders online.

3. Drawing on Social Media

Another thing to bear in mind is that when it comes to social media, WeChat is by far the most popular platform. From conversations and payments to sharing moments and sharing locations, WeChat is part of everyday life and when launching a pop-up store this must be considered.

Providing visitors with incentives such as gifts or complimentary services in exchange for posting pictures online is a way to drive brand exposure and attract more visitors.

4. The centrality of food

One final thing is that food is incredibly important to Chinese culture and is part of the social fabric. What Chanel’s Coco Café in Shanghai has already shown: whether selling skin-care, cosmetic or fashion products, combining food and beverages with the overall pop-up experience will work wonders to draw in more crowds.

China’s economy is growing at a remarkable rate and although China’s market has been opening up for quite a while now, not all brands know how best to approach it. Eager crowds await to be dazzled and pop-up stores are the sure way to go.

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