Retail in general p1

VisitBritain: Chinese tourists to Britain soars by 28% in 1H15 Shanghai Disney sets open date

E-commerce p1

China to set up cross-border e-commerce comprehensive pilot zones in 12 cities including Guangzhou and Shenzhen

Tianjin FTZ opens its first cross-border e-commerce plaza Meijoy Best E-Commerce opens cross-border experiential store in Dongguan City;

recruits franchisees nationwide Alibaba rolls out urban partnership program Tmall Global opens cross-border O2O experiential center in Tianjin Alipay: Shanghai residents spend over 100,000 yuan on average via Alipay in 2015 JD.com signs strategic cooperation framework agreement with Shanghai government JD.com opens its first self-operated cross-border bonded warehouse for fresh produce

in China JD Finance invests in big data company ChinaScope JD Smart launches JD+ PowerUP service to tap international smart hardware market Amazon China launches shopping promotion event for Spring Festival products Mogujie.com and Meilishuo.com to merge; Tencent to increase stake in the new

company Convenience stores p5

CR Vanguard and FamilyMart to open convenience stores in Beijing Subway Commercial properties p5

Wanda acquires U.S.-based Legendary Entertainment for 23 billion yuan Department stores and shopping malls p5

Hangzhou Jiebai Group invests in sports service company to tap into sports industry Apparel p6

Fosun plans to raise stake in German fashion brand Tom Tailor Moonbasa.com opens South Korea Mall; Japan Mall and France Mall to follow soon

Cosmetics p7

European cosmeceuticals brand ISDIN opens store on JD Worldwide Consumer electronics p7

Suning nurtures “super buyers” to participate in Spring Festival promotions Suning restructures Redbaby

Kids products p8

Kaola.com: 72% of mothers prefer imported maternal and baby products

8 January 2016 – 14 January 2016

1 China Retail Weekly Updates (8 January 2016 – 14 January 2016)

Retail in general

VisitBritain: Chinese tourists to Britain soars by 28% in 1H15 According to a report by VisitBritain, 90,000 visitors from China visited Britain in the first six months of 2015, up 28% year-on-year. Chinese tourists’ spending in the U.K has increased by 326% over the past five years, up from 117 million pounds in 2009 to 497.47 million pounds in 2014. In addition, they tend to stay longer with an average holiday length of 10 nights compared to six nights for all visitors on average. Chinanews.com, 13 January 2016 http://www.ecns.cn/2016/01-13/195619.shtml?utm_source=Jing+Daily+List&utm_campaign=515de3e5ee-Jing_Daily_s_China_Brief_August_18_2015&utm_medium=email&utm_term=0_8dec01cd8d-515de3e5ee-407928521&goal=0_8dec01cd8d-515de3e5ee-407928521

Shanghai Disney sets open date Walt Disney Company and Shanghai Shendi Group has announced that the opening date of Shanghai Disney has set to be on 16 June 2016. A key feature of the venue is Disney Town, an international shopping, dining and entertainment district, next to the entrance of Shanghai Disneyland. Inside retail Asia, 14 January 2016 https://insideretail.asia/2016/01/14/shanghai-disney-resort-sets-opening-date/

E-commerce

China to set up cross-border e-commerce comprehensive pilot zones in 12 cities including Guangzhou and Shenzhen China’s State Council has decided to set up new Cross-border E-commerce Comprehensive Pilot Zone in 12 cities, including Guangzhou, Shenzhen, Tianjin, Shanghai, Chongqing, Hefei, Zhengzhou, Chengdu, Dalian, Ningbo, Qingdao and Suzhou, with the aim of replicating and promoting the experience of “six systems and two platforms” of the pilot zone in Hangzhou, Zhejiang Province. The six systems include those in information sharing, online financial services, smart logistics, e-commerce credit, data supervision and risk prevention. The two platforms include an online “single window” system and an e-commerce industrial zone, aiming to build an intact industrial chain and ecosystem for cross-border e-commerce. Ebrun, 11 January 2016 http://www.ebrun.com/20160111/161987.shtml (in Chinese only)

Tianjin FTZ opens its first cross-border e-commerce plaza Haiwei Plaza, the first cross-border e-commerce plaza in Tianjin Free Trade Zone (FTZ), has been opened recently. Haiwei Plaza was invested and developed

2 China Retail Weekly Updates (8 January 2016 – 14 January 2016)

by Haiwei Liquor Trading Market. Located in the Tianjin Port bonded area and a special Customs supervision zone, Haiwei Plaza can serve multiple purposes such as exhibition, office, warehousing and logistics. Government functional departments such as the Customs and supervision and inspection authorities have also established offices in the plaza. Haiwei Liquor Trading Market was established with the support of the Ministry of Commerce. It has introduced a variety of overseas wine products into China. It operates an online platform and offline O2O experiential stores, as well as chain stores in bonded areas and FTZs across the country. Ebrun, 14 January 2016 http://www.ebrun.com/20160114/162495.shtml (in Chinese only)

Meijoy Best E-Commerce opens cross-border experiential store in Dongguan City; recruits franchisees nationwide Recently, cross-border e-commerce importer Meijoy Best E-Commerce has opened an offline experiential store in Nancheng District of Dongguan City. Offline stores of Meijoy Best can be classified into two types. The first type sells physical goods, including both duty-paid goods and bonded imported goods. The second type only displays products through posters, iPads, etc. for online ordering. The Dongguan store belongs to the first type. Currently, Meijoy Best is recruiting franchisees nationwide. It is also opening more experiential stores in large- and medium-sized cities across China. Ebrun, 14 January 2016 http://www.ebrun.com/20160114/162528.shtml (in Chinese only)

Alibaba rolls out urban partnership program Alibaba’s B2B division announced the launch of an urban partnership program, recruiting urban partners to provide sourcing, delivery and other services for retail stores in urban communities. This aims to bring the imported goods selected by Alibaba and local agricultural products sourced from Cuntaobao (http://cuntaobao.com/) to the retail stores in urban communities. The program will also provide entrepreneurial opportunities for urban young people who are interested in O2O retail. Alibaba hopes to develop an Internet service system in urban communities through the program. It is expected that by March 2016, Alibaba will have recruited 500 urban partners, serving a total population of 150 million. Ebrun, 12 January 2016 http://www.ebrun.com/20160112/162199.shtml (in Chinese only)

Tmall Global opens cross-border O2O experiential center in Tianjin Tmall Global and Tianjin Free Trade Zone (FTZ) jointly announced that they will open a cross-border O2O experiential center in Yujiapu Financial District, Tianjin on the basis of a “bonded warehouse + on-site purchase” model. The cross-border experiential center is the first of its kind Tmall Global opened in the Northern China, providing product exhibition, on-site purchase and O2O

3 China Retail Weekly Updates (8 January 2016 – 14 January 2016)

interactions. It is divided into six country- or region-specific experiential malls, including the U.S., Japan, South Korea, Europe, Australia and New Zealand, and Hong Kong, Taiwan and Southeast Asia. A thousand items from Tmall Global will be displayed in the first phase of the experiential center. Linkshop.com.cn, 11 January 2016 http://www.linkshop.com.cn/web/archives/2016/341936.shtml (in Chinese only)

Alipay: Shanghai residents spend over 100,000 yuan on average via Alipay in 2015 According to an annual review report released by Ant Financial, Shanghai residents made the most per capita payment via Alipay in 2015, with an average payment of 104,155 yuan. Zhejiang, Beijing, Jiangsu and Fujian ranked second to fifth respectively. Mobile payments accounted for 65% of total transactions conducted via Alipay, which was 15.8 percentage points (ppts) higher than that in 2014. Western China has a higher penetration rate of mobile payment. The top five regions/provinces with the highest proportion of mobile payments were the Tibet Autonomous Region (83.3%), Guizhou (79.7%), Gansu (79.4%), Shaanxi (78.8%) and Qinghai (78.7%) provinces. Longsok.com, 12 January 2016 http://www.longsok.com/zixun/data/2016/0112/30408.html (in Chinese only)

JD.com signs strategic cooperation framework agreement with Shanghai government Recently, JD.com and Shanghai government signed a strategic cooperation framework agreement. According to the agreement, the two parties will cooperate in areas including e-commerce, Internet finance, cloud computing, startup incubator and modern logistics. JD.com hopes to speed up the integration of Shanghai’s real economy with the Internet economy, promote industrial restructuring and upgrading in Shanghai and contribute to the building of a smart city. Shanghai government will support JD.com to develop its O2O services in Shanghai, allowing the company to take part in health care reforms in the city. Xinhua News, 14 January 2016 http://news.xinhuanet.com/fortune/2016-01/14/c_1117780195.htm (in Chinese only) Shanghai Daily, 14 January 2016 http://www.shanghaidaily.com/business/consumer/Shanghai-JDcom-tie-up-in-smart-city/shdaily.shtml

JD.com opens its first self-operated cross-border bonded warehouse for fresh produce in China JD.com has reached a strategic partnership with Guangzhou E-Jiangnan Trade Co. Ltd. to open its first domestic self-operated cross-border bonded warehouse for fresh produce in the cross-border bonded area in Guangzhou Baiyun Airport. JD.com said that with the bonded warehouse, the supply chain process of the import of overseas directly-sourced fresh produce can be greatly shortened, and

4 China Retail Weekly Updates (8 January 2016 – 14 January 2016)

the intermediary distribution process can also be simplified. The warehouse will fully adopt the JD warehousing system, and will mainly stock three types of imported products: fruit, flowers and dairy products. JD.com also revealed that its fresh food channel plans to establish a number of self-operated cross-border bonded warehouse for fresh produce across China in 2016. Ebrun, 12 January 2016 http://www.ebrun.com/20160112/162208.shtml (in Chinese only)

JD Finance invests in big data company ChinaScope JD Finance announced that it has made an investment in ChinaScope Ltd., a Chinese big data quantitative analysis company based on machine learning technology. It also announced that the two companies will carry out in-depth cooperation in the use of big data in the financial industry, providing basic support for the development of JD Finance ecosystem. ChinaScope will provide information and data support for JD Finance’s services including JD Pay app and JD Finance app, and develop smart financial apps for investors and financial institutions such as fund houses and securities companies. Ebrun, 12 January 2016 http://www.ebrun.com/20160112/162221.shtml (in Chinese only)

JD Smart launches JD+ PowerUP service to tap international smart hardware market JD Smart has rolled out an open ecosystem service for smart hardware. Through cooperation with overseas leading business accelerators, business incubators and technology enterprises, the service will help overseas smart hardware enterprises enter JD.com’s four major platforms: JD Worldwide, JD+ Shoufa (a product debut platform; https://smart.jd.com/pages/about5.html), JD Try (a product testing platform; http://try.smart.jd.com/) and JD Crowdfunding (http://z.jd.com/new.html). Full support will also be provided to help them tap the China market. This marks JD.com’s entry into the international smart hardware market. Currently, JD+ PowerUP has formed partnerships with Techstars, a leading business incubator in North America, and Hax, a Silicon Valley-based business accelerator. Meanwhile, JD+ PowerUP will also introduce high-quality overseas smart hardware products into China. Ebrun, 13 January 2016 http://www.ebrun.com/20160113/162399.shtml (in Chinese only)

Amazon China launches shopping promotion event for Spring Festival products Amazon China announced to launch a shopping promotion event for Spring Festival products. Amazon China said that its global store Amazon Overseas will increase its product offerings to 9 million, double that at the end of 2015. In addition to direct-sales household products, digital products and home appliances, it will also expand its product offerings in apparel, wine and drinks,

5 China Retail Weekly Updates (8 January 2016 – 14 January 2016)

food and other categories. During the Spring Festival, the China team of Amazon Global Logistics will provide round-the-clock services for 20 cities, including Beijing, Guangzhou, Shanghai, Shenzhen and Wuhan. Moreover, Amazon China will enrich its product offerings of directly imported European products in 2016. Ebrun, 13 January 2016 http://www.ebrun.com/20160113/162305.shtml (in Chinese only)

Mogujie.com and Meilishuo.com to merge; Tencent to increase stake in the new company Social-shopping e-commerce platform Mogujie.com announced that it will take over rival Meilishuo.com. In a letter to employees, Mogujie.com said that the transaction will be done through a share swap that values Mogujie.com twice as much as Meilishuo.com, and the new company will be valued at almost US$3 billion. After the merger, both brands will independently operate their businesses, and will retain their respective management personnel and organizational structure. Tencent Holdings, a shareholder of Meilishuo.com, will also increase its stake in the new company. The transaction is the first merger in China’s Internet industry in 2016. Ebrun, 11 January 2016 http://www.ebrun.com/20160111/161980.shtml (in Chinese only)

Convenience stores

CR Vanguard and FamilyMart to open convenience stores in Beijing Subway CR Vanguard’s VanGO Convenience Store is set to open stores in selected subway stations in Beijing along Line 5, Line 6, Line 8 and Line 10 this year. These convenience stores will have an area of about 30 sqm. Meanwhile, FamilyMart will also open convenience stores in some stations on Line 9, Line 10 and Line 15 in the first quarter this year. These small-format convenience stores will cover an area of less than 50 sqm, offering mainly pre-packaged food. The two companies did not disclose specific plans of the store openings. It was reported that convenience stores have disappeared from Beijing Subway for a decade. China Chain Store & Franchise Association, 11 January 2016 http://www.ccfa.org.cn/portal/cn/view.jsp?lt=2&id=423414 (in Chinese only)

Commercial properties Wanda acquires U.S.-based Legendary Entertainment for 23 billion yuan Dalian Wanda Group announced that it has acquired U.S.-based Legendary Entertainment for no more than US$ 3.5 billion (around RMB 23 billion yuan) in cash, marking China’s largest overseas cultural acquisition to date. Wanda Group

6 China Retail Weekly Updates (8 January 2016 – 14 January 2016)

said that the acquisition of Legendary will make Wanda Film Holdings Company the highest revenue-generating film company in the world. After the acquisition, Wanda will help Legendary increase its market opportunities, especially in the fast-growing China market, enabling Legendary to expedite its growth. Legendary is a well-known U.S. film production company. It has delivered a number of blockbusters, including the Batman trilogy and Jurassic World. Ifeng.com, 12 January 2016 http://news.ifeng.com/a/20160112/47036841_0.shtml (in Chinese only)

Department stores and shopping malls

Hangzhou Jiebai Group invests in sports service company to tap into sports industry Hangzhou Jiebai Group, a leading department store operator in Hangzhou, will join a security service company and a private investor to invest a total of 10.78 million yuan in Hangzhou Yuesheng Co. Ltd, a sports service company. After the investment, Hangzhou Jiebai Group will account for 65.63% of Yuesheng’s registered capital. Hangzhou Jiebai Group said that it is only a financial investor and will leave company operations to professional managers. Analysts said that Hangzhou Jiebai Group’s entry into sports industry marks its attempt to expand business scope. Linkshop.com.cn, 13 January 2016 http://www.linkshop.com.cn/web/archives/2016/342061.shtml (in Chinese only)

Apparel

Fosun plans to raise stake in German fashion brand Tom Tailor Shanghai-based conglomerate Fosun International Ltd. has entered into an agreement with a private seller to boost its stake in German fashion brand Tom Tailor Holding AG to more than 25%, but below 30%. Fosun did not disclose the transaction value or the name of the selling shareholder. Fosun first acquired a 23.16% stake in Tom Tailor through its insurance company Fidelidade-Companhia de Seguros SA and its subsidiary in July 2014. Reuters, 8 January 2016 http://cn.reuters.com/article/fosun-de-stx-idCNKBS0UM0FQ20160108 (in Chinese only) Reuters, 7 January 2016 http://www.reuters.com/article/tom-tailor-hldg-ma-fosun-intl-idUSL3N14S1UK20160108?utm

Moonbasa.com opens South Korea Mall; Japan Mall and France Mall to follow soon Moonbasa.com, a women fashion e-commerce platform, has opened a South Korea Mall (korea.moonbasa.com), bringing in well-known South Korean designer brands. It will adopt the direct mail cross-border logistics model for the first time. The first batch of brands to enter the South Korea Mall include

7 China Retail Weekly Updates (8 January 2016 – 14 January 2016)

Corcaroli & Tulip, BendictBlack, Chiswick, LIEU, Preri and Garosu, all of which will adopt a direct sales model. Moreover, Moonbasa.com has been authorized by the U.S. Department of Commerce to introduce numerous U.S. brands into its U.S. Mall. A Japan Mall and a France Mall are also expected to be opened on Moonbasa.com by the end of June this year. Ebrun, 12 January 2016 http://www.ebrun.com/20160112/162224.shtml (in Chinese only)

Cosmetics

European cosmeceuticals brand ISDIN opens store on JD Worldwide Spanish cosmeceuticals brand ISDIN has opened an online store on JD Worldwide, becoming the first Spanish brand on the platform. The ISDIN store on JD Worldwide offers two major types of products, namely cosmetics and maternal and baby products, including personal care products, skin care products, skin moisturizers, sunscreen, baby cream, etc. ISDIN said that it will leverage the online store to strengthen its presence in the China market, and boost its sales and brand awareness. Ebrun, 8 January 2016 http://www.ebrun.com/20160108/161831.shtml (in Chinese only)

Consumer electronics

Suning nurtures “super buyers” to participate in Spring Festival promotions Recently, Suning announced that its will nurture a group of “super buyers” to participate in the Spring Festival promotions. The buyers should understand the needs of customers, be familiar with the products, know the sales channels well and are good at social media marketing. Nearly 1,000 Suning’s employees, including the top management and front office staff of Suning’s rural community stores will become the “super buyers”. CCFA, 14 January 2016 http://www.ccfa.org.cn/portal/cn/view.jsp?lt=2&id=423479 (in Chinese only)

Suning restructures Redbaby Suning recently announced that it will restructure Redbaby, its online baby and maternity business. Suning will separate Redbaby’s online and offline operations and set up an independent office to run its offline business. The company plans to open 50 self-operated Redbaby chain stores in 2016, with the aim of having 200 stores in three years time. In the future, Redbaby will open a cloud store on Suning.com as well as chain stores in Suning Plazas, Suning Life Plazas and Wanda Plazas. Ebrun, 14 January 2016 http://www.ebrun.com/20160114/162522.shtml (in Chinese only)

8 China Retail Weekly Updates (8 January 2016 – 14 January 2016)

Kids products

Kaola.com: 72% of mothers prefer imported maternal and baby products Recently, Kaola.com, a “haitao” platform of NetEase, has released a survey report on families with two children in China. 80% of surveyed families spend around 3,000 yuan per month on their children. Data also showed that 72% of respondents prefer imported maternal and baby products for their children. Earlier, Kaola.com has published a list of the most popular cross-border products in 2015, with diapers, milk and complementary food supplements leading in sales by a wide margin. Seven of the ten most popular brands were maternal and baby product brands, including Kao, Unicharm, Nestlé, Aptamil, Cow & Gate, Mellin and Childlife. Ebrun, 14 January 2016 http://www.ebrun.com/20160114/162527.shtml (in Chinese only)

Fung Business Intelligence Centre The Fung Business Intelligence Centre collects and analyses market data on sourcing, supply chains, distribution and retail. It also provides thought leadership on technology and other key issues shaping their future. Headquartered in Hong Kong, FBIC leverages unique relationships and information networks to track and report on trends and developments in China and other Asian countries. In addition, its New York-based Global Retail & Technology research team follows broader retail and technology trends, specialising in how they intersect and building collaborative knowledge communities around the revolution occurring worldwide at the retail interface. Since its establishment in 2000, the FBIC (formerly known as the Li & Fung Research Centre) has served as the knowledge bank and think tank for the Fung Group. Through regular research reports and other publications, it makes its market data, impartial analysis and expertise available to businesses, scholars and governments around the world. It also provides advice and consultancy services to colleagues and business partners of the Fung Group on issues related to doing business in China, ranging from market entry and company structure, to tax, licensing and other regulatory matters.

Contact

Teresa Lam Vice President Asia Distribution and Retail

Fung Business Intelligence Centre 10/F LiFung Tower 888 Cheung Sha Wan Road Kowloon, Hong Kong

T: (852) 2300 2466 F: (852) 2635 1598 E: TeresaLam@fung1937.com W: www.fbicgroup.com

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