How can the “first launch economy” break through the circle and iterate? Young leading talents from Shanghai think tanks put forward three suggestions

In recent years, Shanghai has led a commercial revolution with its unique urban charm and commercial vitality. It not only launched the "National New Product Launch Site" activity, but also took the lead in proposing to vigorously develop the "first store economy." Driven by this strategy, Shanghai has become a gathering place for global brands, with many companies competing to open the world's first or flagship stores and launch new products.

At present, this business innovation not only includes the first store, but also the first launch, first show, and first exhibition. They promote each other and jointly build a complete brand display and market expansion system. Among them, the first store, as a physical space where the brand directly contacts consumers, is an important carrier of brand image and product experience; the first store, first show, and first exhibition are the brand's latest products and design concepts to the public through visual and experiential means. platform.

The vigorous development of Shanghai's "first launch economy" benefits from its strong economic foundation, open international vision and profound business tradition. Together, these factors have brought a steady stream of attention and traffic to Shanghai. At the same time, a series of innovative measures taken by Shanghai have also provided strong support for the rapid rise of the "first launch economy". Through multi-dimensional efforts such as policy guidance, market optimization, and brand support, Shanghai will further become an important window for domestic and foreign brands to display innovation and expand the market.

The "first store economy" originated from the first store and was originally used to describe the first store opened by an international brand when it entered the Chinese market. It not only covers the most representative brands in the industry, but also new types of stores formed through business format and model innovation. The "first store economy" evolved from the first store is a two-way relationship between the first store and the region where it is located. That is, the region attracts the brand's first store through specific resource advantages, maximizes the combination of brand and regional value, and has a positive impact on economic and social development. Influence.

With the continuous development of the "first store economy", its connotation does not stop at the literal meaning of "first store". The "Several Measures for Further Promoting and Expanding Consumption in Our City" promulgated by Shanghai has a richer interpretation of the "first launch economy", including "creating a first launch economic ecological chain from new product launches to first stores and headquarters" and "developing influential International brands and leading local brands for their global debut, first show, and first exhibition activities."

This shows that the significance of the "launch economy" is not only to bring a new product launch event, a brand display and catwalk, or a physical commercial space for Internet celebrities to a city, but more importantly, to create a new business model , that is, the chain development from the first launch, the first show, the first exhibition to the first store and then to the headquarters, and gathers around the first store and headquarters to form an industrial ecosystem, gradually forming a system network of new product research and development, release, display, promotion and sales.

Taking stock of the development history and current situation of Shanghai's "first launch economy", it has the following salient features:

First, in terms of quantity, Shanghai is in the leading position of the first phalanx.

In Shanghai, in recent years, more than 4,500 international and domestic brands have held launch events and introduced 5,840 first stores, ranking first in the country in terms of quantity and quality. After maintaining the "one city, one thousand stores" new scale for two consecutive years in 2021 and 2022, Shanghai achieved another quantitative breakthrough in 2023: 1,215 new first stores were added in the city, an increase of 13.2% from 2022 and an increase from 2021. 12.7%, maintaining a good growth momentum.

From a nationwide perspective, the number of newly added first stores has formed a development pattern with Shanghai, Beijing, and Chengdu as the first echelon, Chongqing, Shenzhen, and Nanjing as the second echelon, and Hangzhou, Suzhou, and Guangzhou as the third echelon. Among them, cities such as Beijing, Chengdu, and Shenzhen have significant growth momentum, showing strong attraction to new brands.

Second, in terms of energy level, brands that choose to appear in Shanghai generally have higher visibility.

Different from the strategy of some cities focusing on fashionable products and new species, Shanghai, in line with the strategic goal of accelerating the construction of an international consumption center city, continues to attract well-known brands to Shanghai to intensively develop new products through international activities and platforms such as "First Launch in Shanghai" and the China International Import Expo. First shows, first exhibition activities, and strive to settle in high-energy first stores.

In March this year, world-class well-known brands joined hands to stage launch feasts in Shanghai: Starbucks held a national launch event for the new Yi La Duo series, L'Oreal presented a high-end hair show, and Loewe's first-ever brand exhibition was unveiled. , Apple's highest-profile flagship store in Asia opened in Shanghai Jing'an... A series of eye-catching world-class brand activities debuted in Shanghai, once again confirming Shanghai's status in the global fashion and consumer market.

Looking at further data, a total of 168 high-energy first stores were opened in Shanghai last year, an increase of 23 compared with 2022. Among them, there are 3 first stores in the world, 1 first store in Asia-Pacific, 7 first stores in Asia, and 157 first stores nationwide or in mainland China. At the same time, the specifications for internationally renowned brands to open their first stores in Shanghai are also steadily increasing.

Third, in terms of location, the Shanghai business district has a significant head-turn effect.

Judging from the 2024 "First in Shanghai" spring series of activities that have just kicked off, Nanjing West Road Business District and Longhua West Bund Business District are shining brightly. The former attracted five events from international high-end brands, while the latter joined hands with L'Oreal and Tiffany. Among them, more than half of the brands choose to launch and display in their flagship stores or first stores in Shanghai. This also confirms the chain development path followed by the "first launch economy".

Last year, the number of new first stores in Shanghai's top ten business districts all exceeded 30. Data shows that the three major business districts of Nanjing West Road, Huaihai Middle Road and Nanjing East Road attracted 80, 76 and 71 businesses respectively. Although shopping malls are still the first choice for most brands, urban blocks and historical buildings are gradually favored by brands with first stores.

For example, Hengfu District will open 41 new first stores in 2023, helping Xuhui top the list of first stores in each district; Putuo District Global Harbor, Xuhui District Longhuahui and Jing'an District Financial Street Shopping Center are the most popular shopping malls for first stores, respectively. Introduced 36, 29 and 25 first stores, including 1 first store in Asia and 8 first stores nationwide or in mainland China.

Recently, Shanghai released relevant policies and measures for the "First Launch Economy" version 2.0 to better encourage and support the establishment of first stores and brand headquarters. This is a bellwether for the "first launch economy" to enter a new stage of development.

Looking back at the development history of the "first-office economy" in Shanghai, it is not difficult to find that it has gone from germination to rapid expansion, a large number of followers, fading away, and now it has gradually entered a stage of healthy development. The continuous collision and integration of brands and cities are creating new chemical reactions, which can be called the new trend and new trend of the "first launch economy" version 2.0.

In recent years, some well-known brands have paid more and more attention to improving the fit between product positioning and urban style in site selection, and are increasingly dissatisfied with the sameness. Due to its unique cultural heritage and scarcity, Shanghai's historical buildings have gradually become the favorite locations for brand first stores. These old buildings have been renovated, not only retaining their original features, but also injecting new commercial elements of the brand itself, while continuing the urban context and giving a new commercial form to the historical protected area.

The integration of the city's historical temperament and brand cultural concepts is creating new landmarks in Shanghai one after another. For example, Van Cleef & Arpels has set up its third jewelry art center in the world in the neoclassical-style Richemont Twin Villas. Australian brand Aesop, which advocates natural origins, chose to tell its story about Shanghai in an old bungalow on Dongping Road lined with sycamores. understanding of the city.

With the change in consumption concepts, consumers are paying more and more attention to service experience. This trend has given rise to some new business models, such as experience pop-up stores, concept award spaces, etc., which occupy an important position in the "first launch economy".

Through cross-border and mix-and-match strategies, the "first store economy" strives to create a unique sense of conflict and novelty in space design and product presentation, attracting consumers' attention and thereby stimulating consumption desire. At the same time, multi-functional experience centers have emerged that integrate retail, catering, culture, education, sports, family services, parent-child entertainment and other elements. For example, the country's first "Farm Concept Store" opened in Taikoo Li Qiantan, introduced the world's first "natural farm" and the tea workshop that debuted in mainland China for the first time, becoming a store focusing on "healthier and richer lifestyles" Brand representative.

With the development of science and technology, the "first launch economy" is ushering in greater development opportunities and space driven by innovation. Digital technology changes promote the integrated development of the "first launch economy" in physical space and digital space, expand the time and space boundaries of urban business districts, reduce the costs of building, updating, and publicizing brand merchants, and improve digital asset rights confirmation, pricing, and transactions. Under the premise that the mechanism is gradually improved, the transaction of digital products can be gradually opened to further tap the extended value of the "first launch economy".

At the beginning of this year, German brand MCM and Shanghai local brand Bright Dairy both used the zodiac "dragon" as inspiration, integrated traditional culture into virtual expressions, and respectively launched the "Zhenlin Nine Sons" Year of the Dragon limited digital collection and the first tradable digital asset " Long Yao chases the light and orders the light." The development of Yuanverse technology creates a more personalized and differentiated consumer experience, and can also promote the innovation of business models and bring consumers a more colorful shopping experience.

In recent years, Shanghai’s “first launch economy” has made rapid progress and achieved impressive results. In the first quarter of this year, with a series of launches, first shows, and first exhibitions, 450 more first stores were opened in Shanghai, a year-on-year increase of 55%, and both scale and quality hit a record high.

However, under the new situation, the development of the “first launch economy” may encounter certain difficulties and challenges. Especially as the global economic situation changes, consumer confidence and purchasing power are affected, which will directly affect the willingness of brands and merchants to launch new products and open first stores.

The young Generation Z is the dominant purchasing power behind the boom of the “first-time starter economy”. However, this group’s pursuit of personalized, experiential and social consumption characteristics also makes it easy for them to get up and down quickly. Many brands rely on novel brand images and unique business strategies to attract a large number of admiring consumers when they first enter the market. Through this "punch-in" consumption craze, we can quickly capture eyeballs and economic benefits. However, as consumers’ pursuit of novelty gradually cools down, those first stores that fail to continuously provide innovative content and in-depth experiences often face a steep decline in customer traffic, and eventually have to close their stores sadly.

It should also be noted that the entry of a large number of international brands has brought new vitality to Shanghai's accelerated construction of an international consumption center city, but it has also brought huge challenges to local brands. International brands are often able to quickly attract consumers' attention with their strong brand influence, mature operating models and abundant resources. If local brands want to gain a foothold in the competition, they must strengthen brand building, improve product and service quality, and pay more attention to the application of differentiation and localization strategies.

Recommendation 1: Introduce more powerful policies, create a good business environment, and help Shanghai truly become a global gathering place for the "first launch economy".

The “first launch economy” is a two-way journey between cities and brands. A city's strong attraction to brands reflects the strong stamina of the city's domestic demand economy and the diversification of its consumption power structure. Under the new situation, policymakers for urban economic operations must be committed to creating a good business environment, implement policies and measures to encourage the development of the "launch economy", further amplify the city's attractiveness, and gather more domestic and foreign brands to launch global new products and launch brands. The first store and corporate headquarters were established to help improve the industry level and lead consumer trends.

The incentive policies for the "first launch economy" must be systematic and form a combination. When formulating and implementing policies, it is necessary to build an interconnected and coherent policy framework. This framework consists of a series of policies that support, complement and connect with each other in terms of goals, content, implementation and effects. In terms of financial support, targeted rewards and funding will be provided for different forms of launch, first show, first exhibition and first store; in terms of functional ecological creation, we will create a launch economy that integrates new product release, display, transaction and operation. Professional service ecological chain; in terms of management services, we must give full play to the policy advantage of pioneering and piloting, actively explore and break through the blocking points and difficulties for brand companies to land in Shanghai, and export experience and samples.

The point of "launch economy" must be integrated with the overall business plan to form a community. It is necessary to take overall consideration into the integration of the development of the "first launch economy" and the city's overall commercial planning. At present, Shanghai has formed a new "4X2" business system and is building two major international consumption clusters in the east and west. While developing the "launch economy", it is necessary to rationally arrange commercial facilities and formats, promote the optimal allocation of various commercial resources, encourage the coordinated development of first stores, global new product launch landmark facilities and related commercial formats, and jointly create urban commercial and consumption centers .

In terms of business integration, it is necessary to further play the leading role of the "first launch economy". Through brand co-creation, joint marketing and other methods, we promote interaction and cooperation between brands to create a situation of complementary advantages and mutual benefit. On the basis of expanding the influence of the first brand, it will also drive the development of other commercial formats and fully realize the effect of "leading the first to the public".

Recommendation 2: Local brands should enhance consumer experience and participation and form a value community.

Relatively speaking, local brands lack the influence and popularity of internationally renowned brands, and are at an overall disadvantage in competition. However, the prevalence of national trend culture and the arrival of the WEB3.0 era have created new opportunities and markets for local brands. As stated in the book "Experiential Thinking", today's business value inheritance is far from being limited to ease of use, good looks and solving problems, but more focused on "meaning and relationship", which is what we call experience.

For example, a significant consumption characteristic of Generation Z is offline check-in and online sharing. Sometimes, their persona in the online world is created to be fuller and more exciting than their self in the offline space. As a result, they have become a major consumer force in the social media era. Local brands should seize this development trend, create an integrated business format between physical business districts and digital space, organically combine the national trend culture and two-dimensional culture that young people like, and encourage consumers to participate in or lead the "concept first store" Innovative construction, innovative manufacturing for "product launch", and innovative design for "IP debut" provide innovative vitality to the brand while enhancing consumers' participation and sense of belonging, further enhancing brand stickiness and forming "first-time users" as the core value community.

Recommendation 3: Commercial operators should pay equal attention to quality and quantity, and change initial traffic to main store inventory.

In recent years, the supply of commercial entities in Shanghai has been at a high level, and homogenization competition has been fierce. The rise of the “first launch economy” has provided opportunities for the transformation and development of commercial entities. For commercial operators, the supporting facilities of the commercial complex can be adaptively upgraded. For example, there should be a scene suitable for the first show of new products, and an independent space that is different from regular stores should be created.

The "launch economy" cannot be the same. We must avoid blindly pursuing short-term traffic and replicating the Internet celebrity model. Brand introduction strategies should change from simple investment thinking to thoughtful curatorial thinking. This means that when commercial entities introduce elements of the "first launch economy", they must grasp the balance between brand quality and quantity. They must not only pay attention to the brand's immediate appeal, but also evaluate its market potential, innovation strength and cultural value. At the same time, attention should be paid to balancing the relationship between emerging brands and mature brands to ensure the consistency of brand selection and commercial positioning.

Strengthening the full life cycle management of the "first launch economy" is the key to improving sustainable operating capabilities. Once the initial craze subsides, it is necessary to promote brand innovation and upgrade through continuous market adaptation and consumer demand analysis, and transform initial traffic into main store inventory.