Chinese New Retail Innovation

Chinese New Retail Innovation

Adapted from a keynote speech delivered by Matthew Brennan at the ABRAS 2018 annual conference in San Paulo, Brazil

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Matthew Brennan

April 21, 2018
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Transcript

  1. NEW RETAIL INNOVATION IN CHINA DELIVERED BY: MATTHEW BRENNAN

  2. THE REPULIC OF

  3. BORN IN A SUMSUNG HOSPITAL

  4. LIVE IN A SUMSUNG APARTMENT

  5. THE PEOPLE’S REPULIC OF &

  6. TENCENT & ALIBABA: SOME KEY AREAS OF COMPETITION AREA TENCENT

    ALIBABA PAYMENTS WECHAT PAY (PAY.WEIXIN.QQ.COM) ALIPAY (ALIPAY.COM) ECOMMERCE JD, VIPSHOP (JD.COM, VIP.COM) TAOBAO, TMALL (TAOBAO.COM TMALL.COM) SOCIAL WECHAT, QQ (WEIXIN.QQ.COM, IM.QQ.COM) WEIBO (WEIBO.COM) BROWSERS QQ BROWSER (BROWSER.QQ.COM) UC BROWSER (UCWEB.COM) VIDEO TENCENT VIDEO (V.QQ.COM) YOUKU, TUDOU (YOUKU.COM, TUDOU.COM) RETAIL YONGHUI, CARREFOUR (YONGHUI.COM.CN, CARREFOUR.CN) SUNING, HEMA (SUNING.COM, FRESHHEMA.COM) CLOUD TENCENT CLOUD (CLOUD.TENCENT.COM) ALI CLOUD (ALIYUN.COM) TRAVEL LY (LY.COM) FLIGGY (ALITRIP.COM) BIKE SHARING MOBIKE (MOBIKE.COM/CN) OFO (OFO.SO) ENTERPRISE PRODUCTIVITY WECHAT ENTERPRISE, TIM (OFFICE.QQ.COM) DING TALK (DINGTALK.COM) MAPS TENCENT MAPS (MAP.QQ.COM) AUTONAVI (DITU.AMAP.COM) BANKING WEBANK (WEBANK.COM) MY BANK (MYBANK.CN) O2O ON-DEMAND MEITUAN DIANPING (MEITUAN.COM, DIANPING.COM) KOUBEI / ELE.ME (KOUBEI.COM, ELE.ME)
  7. COMPETING ONLINE ECOMMERCE ECOSYSTEMS IN CHINA ALIBABA TENCENT JING DONG

    PING DUO DUO (PDD) LITTLE RED BOOK WEI DIAN VIP SHOP YI TAO HEMA TMALL TAO BAO SUNING
  8. “E-COMMERCE IS RAPIDLY EVOLVING INTO ‘NEW RETAIL.’ THE BOUNDARY BETWEEN

    OFFLINE AND ONLINE COMMERCE DISAPPEARS AS WE FOCUS ON FULFILLING THE PERSONALIZED NEEDS OF EACH CUSTOMER. IN CHINA, OUR NEW RETAIL INITIATIVES ARE TAKING SHAPE.”
  9. ALIBABA’S RETAIL INVESTMENT BLITZKRIEG LAYING THE FOUNDATIONS FOR NEW RETAIL

    INVESTMENT DATE LOGO COMPANY BUSINESS CHINA LOCATIONS ALIBABA OWNERSHIP INVESTMENT AMOUNT 2017 JAN 9TH YONGHUI INTIME DEPARTMENT STORE SHOPPING MALL CHAIN 29 STORES 17 MALLS 73.7% $2.6 B 2015 AUG 10TH VIP SHOP SUNING ELECTRONICS RETAILER 1,600 20% $4.6 B 2017 NOV 20TH CARREFOUR SUN ART RETAIL 2 SUPERMARKET CHAINS AUCHAN / RT-MART 440 36.1% $2.87 B 2017 SEPT 26TH CARREFOUR NEW HUADU INDUSTRIAL GROUP SHOPPING MALL & SUPERMARKET CHAIN 128 10% $500 M 2018 FEB 11TH DALIAN WANDA BEIJING EASYHOME FURNISHING CHAIN 223 15% $865 M
  10. TENCENT'S 2018 RETAIL INVESTMENT BLITZKRIEG LAYING THE FOUNDATIONS FOR SMART

    RETAIL INVESTMENT DATE LOGO COMPANY BUSINESS CHINA LOCATIONS TENCENT OWNERSHIP INVESTMENT AMOUNT 2017 DEC 15TH YONGHUI YONGHUI SUPERMARKETS 580+ 5% $636 M 2018 JAN 15TH VIP SHOP VIP SHOP CLOTHES RETAIL 3RD LARGEST ECOMMERCE PLAYER IN CHINA N/A 7% $604 M 2018 JAN 23RD CARREFOUR CARREFOUR SUPERMARKETS 250+ UNDISCLOSED 2018 JAN 23RD CARREFOUR DALIAN WANDA COMMERCIAL PROPERTY, MALLS, HOTELS 185+ MALLS 90 HOTELS 4.12% $1.5 B 2018 FEB 23RD DALIAN WANDA BETTER LIFE SUPERMARKETS, MALLS 592 6% $140 M
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  13. YI HOU 侯毅 HEMA FOUNDER & CEO “HEMA IS NOT

    A SUPERMARKET, IT’S NOT A CONVENIENCE STORE, IT’S NOT A RESTAURANT, NOR IS IT A VEGETABLE MARKET. SOME PEOPLE CALL IT THE ‘4 NOTS’
  14. 1. 0FFLINE TO ONLINE 2. MOBILE PAYMENTS 3. ENTERTAINMENT &

    EXPERIENCE 4. LOGISTICS & FULFILLMENT 5. PERSONALIZED SHOPPING EXPERIENCE
  15. 9% 17% 91% 83% 类别 1 类别 2 CHINA OFFLINE

    VS. ONLINE SALES 2017 SOURCES: PWC, US DEPARTMENT OF COMMERCE US OFFLINE ONLINE
  16. YI HOU 侯毅 HEMA FOUNDER & CEO “THE MAJOR GOAL

    IS TO DRIVE OFFLINE CUSTOMERS TO SHOP ONLINE”
  17. 30% 70% 50% 50% OFFLINE VS. ONLINE SALES OFFLINE ONLINE

  18. 85% 15% THE GOAL OFFLINE ONLINE

  19. THE HEMA APP

  20. SCAN PAY NOVELTY ITEMS WIDE SELECTION

  21. 3,000 + DIFFERENT PRODUCTS IN-STORE, BUT OVER 50,000 SKUS ON

    ITS APP
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  26. REASONS FOR USING MOBILE PAYMENTS FOR OFFLINE TRANSACTIONS CHINACHANNEL.CO 58.4%

    2.9% 5.3% 15.8% 17.3% 23.4% 44.5% OTHER I CAN ACCUMULATE LOYALTY POINTS DEPENDS ON THE TRANSACTION SIZE I CAN ENJOY DISCOUNTS THERE'S NO EXTRA FEES I DON'T BRING CASH WITH ME IT'S EASY IT'S FAST DATA: TENCENT PENGUIN INTELLIGENCE SURVEY PLATFORM NEARLY HALF OF USERS CLAIMED THEY DO NOT CARRY CASH WITH THEM! 55.2%
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  28. DATA SOURCE: ANALYSYS LTD. Q2 2017 40% 54% 6% TENPAY

    OTHERS ALIPAY CHINACHANNEL.CO 3RD PARTY MOBILE PAYMENTS MARKET 2017
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  32. DATA SOURCE: 36KR Q1 2017 0% 22% 67% 11% PAYMENT

    METHODS IN CONVENIENCE STORES: BEIJING ZHONGGUANCUN CASH UNION PAY CREDIT+DEBIT CARDS APPLE PAY ALIPAY + WECHAT PAY QR CODE PAYMENTS CHINACHANNEL.CO
  33. 2015 2016 2017 2018 2019 CHINA USA 3RD PARTY MOBILE

    PAYMENTS ($TN) 14 12 10 8 6 4 2 0 DATA SOURCE: FORRESTER RESEARCH (US), IRESEARCH (CHINA) CHINACHANNEL.CO
  34. ALIPAY / WECHAT PAY TYPICAL RATES P2P FREE FOR CHINA

    BUSINESSES 0.6% CROSS BORDER: VARIES TYPICALLY 2-3% WECHAT PAY 800+ MILLION USERS ALIPAY 520 MILLION USERS CHINACHANNEL.CO
  35. FACIAL RECOGNITION

  36. RETAIL AS ENTERTAINMENT 11.11 SHOPPING FESTIVAL

  37. 10% 10% 15% 20% 15% 30% FLOOR SPACE BREAKDOWN IN

    TYPICAL HEMA STORE MEAT DAIRY FRUIT & VEG SEAFOOD DRY FOOD FOOD STANDS & DINING AREA
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  40. LOGISTICS

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  42. 3 KM RADIUS 30 MINS DELIVERY

  43. CASE STUDY DIGITALIZATION OF CUSTOMER EXPERIENCE

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  47. PAYMENTS LOYALTY INVOICING CUSTOMER FEEDBACK COUPONS + SOCIAL

  48. NEW RETAIL NEW F&B NEW FINANCE NEW HEALTHCARE NEW MANUFACTURING

    NEW TRANSPORT NEW EDUCATION NEW… NEW… NEW…
  49. NEW = EMBRACING TECHNOLOGY AT SCALE INTERNET, A.I, BIG DATA,

    CLOUD
  50. REVENUES DERIVED FROM HOME MARKET 10% THE REPULIC OF

  51. 95% 75%

  52. FIND ME AT: WEB: CHINACHANNEL.CO TWITTER: @MBRENNANCHINA PODCAST: CHINA TECH

    TALK LINKEDIN: LINKEDIN.COM/IN/MATTHEW-BRENNAN/ WECHAT:
  53. NEW RETAIL INNOVATION IN CHINA DELIVERED BY: MATTHEW BRENNAN