BY DAVE LIN, HEAD OF CONSUMER
With the Olympic Games comes an incredible melting pot of cultures. The way a country prepares the physical, cultural, commercial and digital infrastructure to support visiting citizens from the scores of competing nations around the world for almost three weeks is nothing short of breathtaking. Each night, cafes and bistros are turned into multi-cultural viewing parties – of course, heavily weighted with French participation and flair, but still unique to see French hosts alongside Nigerians, Chinese, Ukrainians, Spanish, Canadians, and the other nations of the world. The constant diversity provided a simple way to survey how consumerism is fairing today and what interesting observations may be driving both current and future trends. Here are three of my most unexpected takeaways after attending Paris’ 2024 Summer Olympic games:
Brand still matters, but with declining significance overall.
‘Big Brands’ used to be everything. An oligopoly of big brands defined what consumers understood to be consumer goods. McDonald’s represented hamburger and fries (perhaps, a bit of America, itself)! Adidas equaled athletic gear. Nestlé represented coffee and chocolates. While this still holds true, consumer models such as DTC and private labeling have eroded the brand primacy of these once-iconic pronouns for everyday consumer goods. I saw Five Guys (an East Coast burger chain in one Parisian side street) drawing customers seeking an anti-fast food burger experience and countless better-for-you brands commanding more shelf space in the Carrefours across Paris. House brands were also an attractive alternative because of their lower cost and local ingredients. Consumers are now seeking more value for their dollars, both in mainstream and high-end product segments. We have even begun to seek out local brands to support smaller vendors and to support brands that represent local values on sustainability, sourcing, workforce, and social values.
Luxury and prestige consumer products seem to be the least impacted by this erosive effect. Luxury buyers who have the capital to purchase the very best in every product category will still seek out brand, legacy, ingredients, and design. There’s nothing wrong with that, as brands inherently represent their products history of quality and innovation. However, as consumer models evolve, the rise of new brands will undoubtably continue to grow.
Super Apps may never take over the world.
Super apps are mobile applications that integrate multiple digital services into a single app. In China, WeChat has built on top of its social messaging platform a wide variety of services, including shopping (live and asymmetric), payments, gaming, and countless other functions. Users can even be notified of parking fines in real-time as parking meters expire as street cameras, car ownership data, and payment data are all integrated into a WeChat notification message. Similarly, Yassir has aggregated ride sharing, food deliveries and grocery shopping services across 15 countries in Africa, Europe (France) and North America (Canada). Grab and Gojek are doing something similar in regions of Asia while Uber is doing so in America, Europe, and various other regions.
Super apps seem to perform the best in three verticals: fintech, e-commerce and social networking. Here the utility of the service and the size of the user base augment the overall value of the product. However, beyond these three large functional areas and perhaps a handful of unique regional markets, the omnipotence of super apps has somewhat plateaued, despite millions of new venture capital investment attempting to innovate and disrupt established markets. In France, Lydia has raised $270M since 2013 (according to Pitchbook) to build a peer-to-peer financial payments platform and recently launched Sumeria to become a “banking super-app” per its website. Nevertheless, I didn’t see a single such super app invitation during my trip. I don’t recall seeing any grocery store activation opportunities or QR code payment opportunities at all. I’m used to seeing PayPal or Affirm payment alternatives at the checkout POS systems of most American retailers and was constantly incentivized to open a Chinese bank account to accept the social payments that my friends on WeChat were sending to me for Lunar New Year. But will we ever see a true super app that extends beyond a single killer feature like payments? So far the success and scale of WeChat has not been replicated in many other markets and my belief is that it likely won’t without another major use case shift driven by social and technological innovation.
Value is winning the day.
During the Paris Olympics, people lined up for the events (of course), their favorite restaurants, and Louis Vuitton! Hermes and others would have hour long lines out the door as well, if not for an online lottery system that sees 30,000 people a day vie for 30-60 leather goods appointments to purchase one of their famous handbags.
However, outside of high-end luxury and the biggest wallets, mass value seems to have all the momentum in France and beyond. We see Picard in France offer high value through retailing frozen meals. We see Pinduoduo in China (and its American-subsidiary, Temu) reaching peer status with Alibaba by selling $10 shoes, $2 shirts and other ultra-low-cost products. Meanwhile, Costco’s growth in America has helped its stock reach all-time highs in recent quarters. There seems to be a natural correlation between value and mainstream as we all look to optimize the purchasing power of our capital.
While this may seem like an obvious point in my current framing, I’ve found the point forgotten in recent times when equity-financed growth was all too common, and as a result, find it important to honor the general durability of value across the consumer world. I find that in uncertain times where businesses may lack clarity into pricing strategy or product positioning, it’s often safe to lean toward the notion that increasing product value is good for consumers and business.
Paris 2024 brought an interesting diversity of perspectives on current consumer trends to complement the grand sporting tradition that we all know and love. With every Olympics, we see new records broken that demonstrate the continuous growth of human potential and I believe the same will be said about how consumerism evolves in years ahead.