Written by Leigh-Anne Russell, Creative Services Manager @ The Silk Initiative
At The Silk Initiative (TSI) the work we do often dives deep into understanding consumer desires to find connections and insights that enable identification of business opportunities of which our clients can take advantage.
Recently we’ve been trying to understand Chinese consumers’ desire for more mobility and connectivity. We’ve been looking at how one of the hottest mobility and connectivity trends sweeping through China right now might create opportunities for beverage innovation in 2017.
China’s bike-sharing revolution
The bicycle was once undeniably the most popular mode of transportation in China. In China’s cities, commuters on bicycles enjoyed a freedom of mobility that was gradually lost with the advance of car culture. As two-wheels went out of fashion, the number of Beijing commuters who rode bicycles to work went from 63% in 1980, to now less than12%, according to figures provided by the Beijing Morning Post in 2015 and citizens have paid a high price in increased congestion and air pollution as a result.
[IMAGE Chinese urban cyclists commuting in the 1980s vs today]
Emergence of innovations that combat congestion and pollution
Public bike-sharing schemes have existed in China for a decade, but they haven’t been widely adopted because people had to pick up and park the bicycles at designated docking stations. However, after Chinese President Xi Jinping announced incentives for sharing-economy and internet-empowered innovations, we have seen an explosion of investment in bike-sharing startups.
This recent emergence of dockless bike-sharing programs initiated by private companies targets the younger smart phone-savvy generation and takes advantage of GPS tracking technology.
There has been recent major financial investment in the top two players, Mobike, and Ofo, by both Chinese and Silicon Valley backers and the subsequent planned scale of the roll-out means China’s urban dwellers will soon see hundreds of thousands of new sharable bicycles on their streets. There are already an estimated 100,000 Mobikes on Shanghai streets alone.
How bike-sharing is winning consumers’ hearts
Bike-sharing provides consumers with greater freedom and convenience, for example, in providing a way to get somewhere faster and with less effort when they are feeling too lazy to walk.
Bike-sharing is a 24hr option for people when travel needs to during times of the day when public transport isn’t an option.
For people that want to avoid a stuffy commute on crowded public transport or when they just want to explore their city, bike-sharing provides the answer!
Finally, bike-sharing provides peace of mind from constantly worrying about and dealing with the high incidence of bike theft in China, as well as peace of mind that they are making a healthier, more environmentally friendly choice with their mode of transport.
So where are the opportunities for beverage innovation?
We figured that since people will be moving more, they’ll probably be drinking more.
Beverage industry trends in China last year pointed to consumers’ general increasing desire and capacity for spending on products that enhance health and wellness. We saw innovations in the drinks sector that delivered in those areas, such as more choices of beverage products high in fibre to aid digestion, probiotics and other drinks for better gut function.
As bike-sharing goes mass, we predict that this will create an interesting space for beverage product innovation and brands can consider new business opportunities.
Are avid fans of bike-sharing, especially commuters who are on-the-go, going to seek better, trendier and more convenient ways to rehydrate and replenish their energy levels than the current offerings? Might these needs differ by season given increases in exercise and movement?
In terms of beverage packaging and design innovation, how might bike-sharers find those rehydration and reenergizing products conveniently accessible to them while waiting at a traffic light? What might be new forms of disruptive sales channels that appear across China as a result?
Some bike-sharing apps already allow their users to post their riding distances on China’s popular social network, Wechat. How could beverage brands collaborate with bike-sharing startups to tap into the target consumer demographic’s keenness for social networking and gaming?
Some user complaints are about the bikes’ design not giving them a basket or place to put their bags – is there a way for a beverage brand to solve that problem with an all-in-one device to clip easily onto bike frames designed for beverage and bags? How might we see product placement occur on these bikes as beverage manufacturers start to see these new riders as mobile billboards for their brand ads?
8 ways we can think of how beverage brands and marketers could take advantage of this trend and capitalize on this bike-sharing frenzy:
- Position beverage products more on hydration
- Emphasize that packaging better suits bike rides
- Position on fun/leisure/pleasure or convenience/mobility aspects of their brands to go with predominant motivations behind bike riding
- Tie ups with bike sharing companies for marketing purposes
- Come up with innovation specific to bike riders e.g. premium product that enhances the experience of riding a bike or makes it easier to ride
- Marketing centered around connectivity (apps) and social media
- CVS focus for product distribution
- Segment specific innovation e.g. gender specific composition of the product or packaging
TSI’s rising global profile in food and beverage expertise
At the 13th InnoBev Future Growth Forum to be held in Frankfurt at the end of April, TSI Managing Director, Andrew Kuiler, will be a keynote speaker and a judge in the event’s InnoBev Awards. This two-day conference focuses on (non-alcoholic) global beverage market growth and innovation insights, plus networking with industry leaders and entrepreneurs from around the world.
Andrew will present on the topic of “What Chinese consumers are looking for in beverages” for which TSI will be commissioning panel research to get quantitative data about changes in behavior around beverage consumption in China and dive deeper into find insights and answers to some of the questions we have posed in this article.
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