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Experiential retail innovation evolving rapidly in China Maximising commercial opportunities and enhancing passenger experiences through technology K eith Chen, Head of Global Travel Retail, Luxury Jewelry, and Fashion BU, Xiaohongshu, shared market trends from an international and industry perspective and explored the possibility of cooperation. “Based on various indicators from Xiaohongshu’s internal data monitoring, we have summarised four major trends that an increasing number of users are actively reconnecting with the vibrant world, embracing authentic lifestyles, and willingly footing the bill for travel experiences that span the globe,” said Chen. “With a mentality of ‘wherever you play, you buy’, the act of shopping has gradually become a lifestyle. As the popularity of duty free shopping continues to rise, users are more inclined towards being directly informed on how to shop securely and effortlessly rather than just for convenience. According to Xiaohongshu’s internal data, the search popularity for duty free shopping in Hainan has nearly doubled in 2023, with further growth potential still evident.” In today’s rapidly evolving digital landscape, Chinese travelling consumers are increasingly turning to online platforms to guide their journeys. “According to TopKlout reports in 2023, 82% of travellers searched travel guides online from Xiaohongshu, which has emerged as a leading destination for this purpose,” Chen explained. “Through its comprehensive approach, Xiaohongshu seamlessly accompanies users from the initial stages of inspiration all the way to making travel decisions and embarking on their journeys. This journey is not only facilitated by the platform’s rich content, but also by the interactive nature of the user experience, which fosters word-of-mouth recommendations and reflects the authentic consumer decision-making process.” In China, experiential retail innovation is evolving rapidly, particularly with the emergence of platforms like Xiaohongshu. “We are dedicated in revolutionising the way users engage with brands and products,” Chen added. “Xiaohongshu not only serves as a comprehensive travel guide hub, but also facilitates immersive retail experiences by accompanying users throughout their entire journey, from initial inspiration to the final purchase. Moreover, the platform integrates offline stores seamlessly into its ecosystem, allowing brands to enhance the offline shopping experience through strategic engagement.” M a Yan, General Manager, Sino-Singapore Chongqing Airport Commercial Management Co. Ltd, explained that, over the past decade, Chinese airports have witnessed a remarkable annual growth rate of approximately 7% in passenger traffic, underscoring a robust and sustained demand for air travel. Yan commented that, during this period, over 70 airports were either expanded or newly-constructed, driven by three key trends: • Increased commercial space: “With the construction of new passenger facilities, a greater proportion of space has been dedicated to commercial use. The average commercial area allocated per million passengers has increased by around 40% in new terminals. This expansion reflects a strategic focus on enhancing non-aeronautical revenue streams through retail, dining, and other commercial activities.” • Focus on digital and IT solutions: “A significant emphasis during airport expansions has been on integrating IT and digital solutions to streamline the passenger journey. Biometric systems, self-service options, and advanced passenger information systems have been widely adopted across Chinese airports. These technologies boost operational efficiency and enhance the overall travel experience by making it more seamless and user-friendly.” • Development of satellite terminals: “Technological advancements have facilitated a shift towards more automated processes, reducing the reliance on traditional check-in counters. This has allowed airports to increase efficiency and capacity without necessarily expanding the core terminal structures. Instead, the development of satellite terminals has been prioritised, supporting the overall growth in passenger handling capacity without extensive physical expansions of the existing terminal buildings.” These developments collectively reflect a strategic evolution in airport design and management, focusing on maximising commercial opportunities, enhancing passenger experiences through technology, and optimising operational efficiencies. “Experiential retail in China has seen a significant transformation, which is largely driven by shifting consumer behaviours and heightened expectations for safety, convenience, and immersive shopping environments,” Yan explained. Progressive developments in experiential retail within China include a sense of ease and comfort at spending, hybrid commercial concepts, and the emergence of new segment niches. Keith Chen, Director - Global Travel Retail, Luxury Jewelry, and Fashion Accessories Business Group, Xiaohongshu: “Through features like Key Opinion Sales, Xiaohongshu enables brands to efficiently plant seeds of interest and engage in high-frequency interactions with consumers, ultimately guiding them to offline stores for hands-on product experiences. This integration exemplifies how experiential retail innovation in China is leveraging online platforms to enrich offline shopping experiences and foster deeper connections between brands and consumers.” Ma Yan, General Manager, Sino-Singapore Chongqing Airport Commercial Management Co. Ltd. (SSCACM): “Since the industry is highly regulated in China, the duty free opportunities for brands in Hainan or downtown areas are entirely dependent on the duty free policies and licensed operators. This strict regulatory framework dictates how brands can participate and benefit from the duty free market.” Wednesday 1 5 May 2024 7 T F W A D A I L Y