A CU­BIC SALES FOR­MULA

An out-of-the-box mar­ket­ing idea puts tra­di­tional Shang­hai brands in a square ma­chine as part of ef­forts to boost vis­i­bil­ity and sales

China Daily (Canada) - - SHANGHAI - In Shang­hai wang_y­ing@chi­nadaily.com.cn

Shang­hai’s wan­ing time-hon­ored brands have lit­er­ally been given a help­ing hand — in the form of a ro­botic arm within a cu­bic vend­ing ma­chine.

A sur­vey con­ducted by the Shang­hai Acad­emy of So­cial Sci­ences shows that only about 10 per­cent of Shang­hai’s time­honored brands are prof­itable, while 70 per­cent of them can barely make ends meet. The re­main­ing 20 per­cent have had to shut down af­ter suf­fer­ing losses for years. There are 222 such brands in the city, rang­ing from food to clothes to ac­ces­sories.

To help ar­rest this de­cline, 2- me­ter- high vend­ing ma­chines that dis­pense Shang­hai’s clas­sic time-hon­ored prod­ucts such as White Rab­bit creamy can­dies and Tiger and Dragon Es­sen­tial Balms are be­ing rolled out across the city’s tourist hotspots. In con­trast to tra­di­tional vend­ing ma­chines that can only dis­play prod­ucts that mea­sure roughly the same di­men­sions, th­ese ma­chines al­low for a va­ri­ety of shapes and sizes be­cause they use a robot arm to re­trieve the mer­chan­dise.

More than 100 of such ma­chines will be avail­able across Shang­hai by 2016 and there could be as many of 1,000 within the next three years, ac­cord­ing to Feng Jionghui, deputy gen­eral man­ager of Sig­na­ture Life­style Co Ltd, the op­er­a­tor of this new project. Feng added that be­tween 20 and 30 of th­ese ma­chines will soon ap­pear in lo­ca­tions such as Nan­jing Road Pedes­trian Street and Yu Gar­den, both are ma­jor tourism spots in down­town Shang­hai.

“There are so many prod­ucts worth rec­om­mend­ing to do­mes­tic trav­el­ers and ex­pa­tri­ates such as Shang­hai Cof­fee and White Rab­bit can­dies but th­ese brands have en­tered an awk­ward bot­tle­neck in terms of de­vel­op­ment,” said Feng.

“Peo­ple out­side of Shang­hai and those from the younger gen­er­a­tion hardly know about th­ese brands to­day, so we de­cided to ap­proach the Time­Honored As­so­ci­a­tion and work to­gether to re­build their pop­u­lar­ity.”

The first ma­chine was set up at the Jing’an Tem­ple metro sta­tion where Lines 2 and 7 in­ter­sect. Con­sumers can pur­chase the goods us­ing their debit or credit cards. The ma­chine, which oc­cu­pies an area of just 2.5 square me­ters, re­quires min­i­mal main­te­nance and has al­ready at­tracted many cus­tomers.

“Since the ma­chine was made avail­able in Oc­to­ber, we’ve seen more than 20 or­ders ev­ery day for the prod­ucts, most of them priced be­tween 58 and 108 yuan,” said Feng.

Shao Yul­ing, sec­re­tarygen­eral of the Shang­hai Time- Hon­ored Brand As­so­ci­a­tion, said she was hugely im­pressed by the spend­ing power of Chi­nese con­sumers dur­ing the Novem­ber 11 Sin­gles Day on­line shop­ping spree. Yet, at the same time, this phe­nom­e­non spelled trou­ble for cer­tain busi­nesses as well.

“The boom­ing e-commerce scene has over­shad­owed tra­di­tional pur­chas­ing habits and the phys­i­cal stores for Shang­hai’s time-hon­ored brands have been im­pacted as a re­sult. It’s sad to hear that some of the flag­ship stores for fa­mous brands will be low­er­ing their shut­ters next year,” she said.

Shao added that she felt com­pelled to do some­thing to help th­ese ail­ing busi­nesses, and when her as­so­ci­a­tion was ap­proached by Feng’s com­pany ear­lier in June, she im­me­di­ately took in­ter­est in the idea of pro­mot­ing the city’s pres­ti­gious brands and prod­ucts through vend­ing ma­chines.

Based on mar­ket sur­veys, Feng’s team would choose the prod­ucts that will be fea­tured in the ma­chines. The se­lec­tion of goods will also be al­tered over time ac­cord­ing to fac­tors such as pur­chase fre­quen­cies, tim­ing and lo­ca­tion.

“Take the ex­ist­ing ma­chine for ex­am­ple. As its lo­ca­tion is adjacent to many high-end of­fice build­ings where many white-col­lar work­ers and for­eign­ers have the habit of drink­ing cof­fee, prod­ucts like Shang­hai Cof­fee are among the most pop­u­lar,” said Feng.

Ac­cord­ing to a poll con­ducted by Sig­na­ture Life­style, up to 54 per­cent of re­spon­dents said they would buy a sou­venir dur­ing their trav­els, with out­bound trav­el­ers be­ing more in­clined to do so. How­ever, not many peo­ple ac­tu­ally buy sou­venirs in China’s tourist hotspots be­cause most of them are sim­i­lar in ap­pear­ance and qual­ity — they are all made in Yiwu, a small city in Zhe­jiang prov­ince fa­mous for pro­duc­ing such com­modi­ties.

Feng said that their project can help change the sit­u­a­tion in Shang­hai as the ma­chines can make time-hon­ored goods more dis­tinc­tive via its unique sales plat­form.

“While the goods sold on on­line plat­forms enjoy good sales ev­ery year, there is no rea­son our high qual­ity prod­ucts can­not win over cus­tomers. We just need good plat­forms and th­ese vend­ing ro­bots are pro­vid­ing one,” said Shao.

Feng shared that a 12-mem­ber de­sign team, which is evenly di­vided into Chi­nese and for­eign de­sign­ers, is cur­rently work­ing on themed gift pack­ages, and the first batch would be avail­able be­fore the Chi­nese New Year in Fe­bru­ary.

Con­sumers can ex­pect to find themes such as “Sweet Shang­hai”, a pack­age pri­mar­ily made up of snacks for those with a sweet tooth, or “Cool Shang­hai”, which might fea­ture fans and min­eral wa­ter. Each of th­ese gift pack­ages will come in spe­cial wrap­ping to re­flect a mix of mod­ern and tra­di­tional Shang­hai el­e­ments.

The team at Sig­na­ture Life­style is also work­ing against the clock to set up a WeChat plat­form, a pop­u­lar Chi­nese so­cial me­dia plat­form, be­fore the Chi­nese New Year so that cus­tomers can browse, buy, and even ar­range for a time and lo­ca­tion to re­trieve their pur­chases. Be­sides Shang­hai, sim­i­lar vend­ing ma­chines will also be re­leased in cities such as Beijing and Shan­dong prov­ince in the near fu­ture.

“Our am­bi­tion is to make our team the na­tion’s No. 1 brand for cul­tural sou­venirs in the fu­ture. We look to op­er­ate up to 8,000 of such ma­chines across China in the next five years,” said Feng.

PHO­TOS BY WANG YING / CHINA DAILY

Mod­ern de­signs that re­flect tra­di­tional Shang­hai cul­ture will adorn gift pack­ages con­tain­ing time­honored mer­chan­dise.

A vend­ing ma­chine sells Shang­hai sou­venirs at a metro sta­tion.

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