Editor’s Note: Elaine Jiang is Aptos’ regional director for China. In this exclusive Q&A, Elaine discusses the challenges and opportunities confronting China’s retailers and how Aptos is helping their transformational journey to the next generation of retailing.
Q: When did Aptos establish its presence in China?
EJ: We established our presence in China relatively recently, in 2016, but we immediately made China home. Our existing global customers opened stores in China and brought us here, but instantly we realized that local retailers had huge opportunities as well. We entered the Shanghai area first, where we also settled our offices, and we then expanded our operations throughout the country. Today, our customers in China include tier 1 retailers of the calibre of DFS, Fast Fish and Metersbonwe, who rely on Aptos as their transformational partner.
Q: Is China a strategic market to Aptos? If yes, why?
EJ: China is extremely strategic to us, and we are highly committed to investing and driving innovation in the region. We have been appointing sales, consulting and project delivery leaders to bolster business development and operations in China, including external hires with local expertise as well as internal transfers. This mix ensures a balance between localized domain knowledge and deep experience with Aptos solutions and customers, both critical to long-term success. Deep transformation in Chinese retailing has further increased the demand for our planning solutions, as well as for our team of retail experts.
Q: What challenges are confronting China’s retailers?
EJ: Over the past 30 years and until recently, Chinese retailers have been experiencing exponential growth; it was common for them to grow by double-digits and open hundreds of stores per year. This continuous expansion got Chinese retailers to a point where many challenges started to emerge in terms of managing inventory and assortments, as well as in maintaining margins. Many of China’s retailers have been expanding rapidly to a certain level but are now struggling to grow beyond that threshold. The whole industry is going through a bottleneck and needs to move to the next generation of retailing, where the focus will be on building their brands, gaining new efficiencies and increasing margins.
Q: How are the buying behaviours of Chinese consumers evolving?
EJ: Chinese shoppers, like consumers in many markets around the globe, are empowered with information and more demanding, and their buying behaviours have changed radically. They have more options to choose from (local brands, international brands, online and offline), they have generally more spending power, and they are extremely tech-savvy and informed, making extensive use of apps to follow global trends, compare products and buy. In store, they increasingly look for digital experiences that seamlessly connect online and offline worlds. Finally, and this is especially true among the younger generations, Chinese shoppers have a preference for brands that are iconic and highly recognizable, representing a lifestyle and the social and cultural values they identify with.
Q: How can retailers satisfy modern shoppers and move to the next stage of maturity?
EJ: In order to succeed in this competitive scenario, retailers need to know their customers better, put the right products in front of them and build loyalty. The traditional operating models, which were very much about being responsive to demand (‘this product is selling, let’s do more of it’), don’t work any longer. China’s retailers acknowledge that they cannot grow their brand and expand further if they just ‘react’ to demand. They need to gain accurate customer insights, be better at planning their collection strategy and localize their assortments to the specific wants of their customers. Growth will come from building the brand and offering the best assortment and differentiating experience to consumers.
Q: How is Aptos responding to the needs of retailers in China?
EJ: Aptos’ advanced technology provides the merchandise and assortment planning sophistication that Chinese retailers are looking for. But we are not just a software vendor. We help retailers in China overcome the current industry bottleneck, achieve transformation and move to the next stage of maturity. This is our mission. We bring to China the best practices that we matured in Western countries, where retail merchandising is a much older practice, while adapting these fundamentals to China’s unique situation: a much bigger population, a faster pace of retailing, a different online market and closer supply sources.
To learn more about Aptos’ continued focus and expansion in China, contact Elaine Jiang on WeChat (ID: jingyomoment) or LinkedIn.