Plain and simple, we are seeing more American retail and brand companies from Starbucks to Walmart tie their growth prospects to the rising middle class in Asia, and China in particular. We here at Tematica are not surprised given prospects for discretionary spending to be had compared to here in the US where debt service is taking a greater and greater bite out of disposable income for consumers that are undersaving as they live longer.
Pretty much a no brainer as we see the cross roads of our Cash-strapped Consumer, Aging of the Population and Rise of the New Middle Class investing themes. What we’re seeing is a Harvard Business case study in the making.
American retailers are heading east: They’re opening the doors to brick-and-mortar stores in China, while listing on China’s dueling marketplaces — Tencent and JD.com. Walmart, for example, brought a small-format supermarket to the city of Shenzhen as the popularity of “small retail” grows in China.
And, like many retailers in China, Walmart’s small-store rollout comes with a digital payments option. Shoppers can pay for items using a program within Tencent’s WeChat while shopping.
Walmart is hardly alone in its brick-and-mortar and eCommerce efforts. Brands from L Brands — which counts Victoria’s Secret in its portfolio — and Ralph Lauren, as well as Starbucks, are bullish on China. Here are their executives on how they plan to build their brands in the country.