You can’t talk about the future of retail without looking to China, so it was fascinating to hear from China’s biggest retailers at Retail Week’s Tech show recently.
Chenkai Ling, Vice President of JD.com
The event kicked off with a keynote address from Chenkai Ling, vice president of JD.com and general manager of JD Retail Solutions. He spoke passionately of boundary-less retail – in which social commerce, content commerce and machine learning will combine to form potent collaborations between retailers, suppliers and wider stakeholders. ‘Smart commerce’ is all about connectivity, agility and openness to share information.
Did you know? JD.com has over 88 million daily active users
Yeming Wang, General Manager, EMEA, Alibaba Cloud
The themes of blending channels and enhancing consumer experiences through digital engagement also featured in Yeming Wang’s presentation. He says Western retailers interested in ‘New Retail’ can learn from and potentially benefit from the following areas of commerce (see below).
Leading Chinese retailers including Alibaba and JD.com have developed their own ‘ecosystems’ so that they can reach into credit finance, logistics, broadcast media and so on, explained Wang. In the case of Alibaba Cloud, becoming specialists on data infrastructure and storage has been a canny move also – Alibaba Cloud now powers huge swathes of business functionality internally and beyond. Remember there are over 300 companies just within Alibaba itself, Wang said.
The Chinese think big. Wang says that following on from New Retail the world can expect New Finance and New Manufacturing using the smart business thinking, underpinned with data driven infrastructures.
Singles Day spread is predicted
Alibaba has had phenomenal success with Singles Day – also known as 11/11 – held on November 11th. In 2017 Alibaba’s mobile wallet app Alipay broke the record for most transactions per second with 256,000. And in 2018 Alibaba saw its gross merchandise volume (dollar value of total transactions) reach $30.8 billion despite the company recording its lowest ever Singles’ Day growth rate.
Being adopted in more and more countries, many industry watchers believe Singles Day will become a European shopping event – similar to Black Friday and Amazon Prime Day – in a matter of years. However one leading retailer we spoke to said a huge percentage of purchases are later returned – raising questions about the sustainability of such an over-hyped sales event.
Cloud shelves are coming!
Pop-up smart stores allow Alibaba to test the latest technology and give shoppers the chance to try new ways to shop – all in the name of New Retail advancement. Wang spoke of ‘Cloud Shelves’ being developed – so that a product, say a shirt, is picked off a shelf – and adjacent screens or handheld devices display product and stock information instantly giving the shopper immediate rich content to enjoy. With the cloud storing product information ready to be accessed shelf-side it’s a simple step to making an in-aisle purchase on a connected app. QR codes linked to Alipay complete the purchase journey.
Did you know? Alibaba Cloud has 15.5% share of the global IaaS market (Infrastructure as a Service) with over 1 million users.
Cindy Wei, Head of China at Yext
Cindy Wei of Yext took a fascinating deep dive into consumer trends in China, again focusing on the obsession with mobile commerce and social influencers, and the power of big shopping events like Singles Day.
“Deeply integrated lifestyle apps on phones mean Chinese consumers are always connected to the big companies like Alibaba and Tencent,” said Wei. “This is how they buy groceries, set up dates, buy movie tickets and make hair appointments.” She said TikTok the Chinese video app is seeing rapid take up in China today.
In-app shopping is huge, image search is now commonplace and digital technology has been harnessed “to make it really easy for customers to transact instantly”.
Wei made the point that there is still only 58% internet use penetration across China, so there is still a vast amount of growth in ecommerce to come. No wonder so many international brands want some action in this growth market where luxury brands and European names are so desired. International brands are learning how to sell here (as the Bulgari quote below demonstrates), and to maximise sales opportunities when the wealthy Chinese embark on outbound travel during holidays such as National Week.
“A lot that will shape the future of retailing is happening in China,” concluded Wei.
Did you know? Currently only 8.7% of the population of China hold passports.