- China's consumers want to spend more money but they have cut down the time spent on the shopping journey, Chen Xiaodong, CEO of Alibaba-owned InTime said.
- InTime is one of China's largest department store operators and was acquired by the tech giant in 2017.
- At the moment, traffic to InTime's physical stores is relatively low and around 20% of current sales are coming from its online store.
In the aftermath of the coronavirus pandemic, China's consumers are spending less time on the shopping process — but they're spending more money than before, according to a CEO of an Alibaba-owned company.
Chinese shoppers are particularly willing to pay a lot of money on luxury goods and cosmetics, Chen Xiaodong, CEO of InTime, said Tuesday. His remarks came during CNBC's annual East Tech West conference, which is being held this year both remotely and on the ground in the Nansha district of Guangzhou, China.
InTime is one of the largest department store operators in China and was acquired by tech juggernaut Alibaba in 2017.
"Consumer intention is still there. The people want to spend more money compared with last year but the time they spend on a shopping journey (has shortened)," he told CNBC's Arjun Kharpal at the opening remarks of the conference.
Earlier this year, InTime temporarily shut 65 of its stores for a number of weeks as China went into lockdown to tackle the pandemic.
During this period, the company was able to make use of Alibaba's e-commerce expertise and logistics scale to shift its sales to the internet.
InTime used Alibaba's livestreaming platform, Taobao Live, to increase the number of streams where viewers had the option to directly place orders on Intime's online store. Several thousand sales associates from the physical stores were said to have been registered as livestreaming hosts to facilitate the streams.
Chen explained that InTime was already tapping into the trends around online shopping such as livestreaming before the pandemic hit. The virus merely sped up "the digitalization procedure for the physical stores," he said.
With the pandemic now relatively under control in China, customers are slow to return to physical stores due to safety considerations, Chen explained. He added that sales have recovered from a year ago and about 20% of it is coming from the internet at the moment.
Still, InTime has no plans to push customers in any one direction — either to the physical stores or the online store. It depends on people's habits, according to Chen. But he pointed out that livestreaming had its benefits where a sales associate could potentially serve a thousand or 10,000 people concurrently through the stream whereas in the physical store they can only serve a handful of customers at any given time.
"So, it's very convenient," Chen said.
China's retail sales for October continued on an upward trajectory, rising 4.3% year-on-year as more consumers opened up their wallets. Though the figure missed analysts' expectations, it was still growing at a faster pace than September's 3.3% increase.