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October16,2017
DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
Source:Retailcongressasia.com
TheFGRTteamattendedRetailCongressAsiaPacific2017inHongKonglastweek.
Inthisreport,wehighlightourkeytakeawaysfromtheconference:
1) ThefutureofUSretailisoptimistic.
2) DigitalizationofretailiskeytotakingcareofconsumersinemergingAsianmarkets.
3) Localizeyourbrandstorytoinfiltratethemindsetsofthe4.5billionconsumersinAsiaPacific.
4) OnetactictowinningintheNewRetaileraisforretailerstomasqueradeasanentertainmentcompany,brandplatformanddataecosystemallinone.
5) TostayaheadofthecurveintheNewRetailera,oneneedstothinklikeaventurecapital(VC)firm,beagilelikeatechcompanyandlaunchnewbusinessmodels.
6) Cross-bordere-commerceenablesretailerstosellintonewmarkets.
Retail Congress Asia Pacific 2017:
Localize, Digitalize and Innovate to
Stay Competitive
Deborah Weinswig
Managing Director
FGRT
US: 917.655.6790
HK: 852.6119.1779
CN: 86.186.1420.3016
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October16,2017
DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
RetailCongressAsiaPacific2017TheFGRTteamattendedRetailCongressAsiaPacific2017inHongKonglastweek.TheconferenceistheAsiaPacificversionofWorldRetailCongress,andfocusesontopicsinretailsuchasomnichannel,cross-bordere-commerce,consumertrends,retailtechnology,NewRetailandfulfilment.Theconferenceisattendedbyseniorleadersinretail,technology,startupsandventurecapital(VC)industries,andthisyear’seventfeaturedspeakersfromAlibaba,Macy’sChina,Lazada,FossilandBrooksBrothers,amongothers.
Below,wesummarizeourkeytakeawaysfromRetailCongressAsiaPacific2017.
1.TheFutureofUSRetailIsOptimisticTheoutlookforthefutureofUSretailispositive,drivenbythesequentialincreaseinUSretailsales,accordingtoMattShay,PresidentandCEOoftheNationalRetailFederation(NRF).StoreopeningsaregoingtobethenextpositivesignforUSretail.Shaybelievesnootherindustryisasexcitingandtransformativeasretail.
HehighlightedAmazon’sacquisitionofWholeFoodsandWalmart’sacquisitionofJet.comastwolandmarkexamplessymbolizingthecomplementaryrelationshipbetweenbrickandmortarande-commerce.InShay’sview,retailershavebeentryingtoreachcustomerswheretheyare,moresothantryingtobeateachother.HeobservedthatretailersarelookingincreasinglytoAsiaforexpansionopportunities.Nolongerseenmerelyasasourcingdestination,theregionisnowlookeduponasarisingconsumptionpowerhouse.
Seeourlatestweeklystoretrackerseriesreport:WeeklyStoreOpeningsandClosuresTracker#28:WalmarttoOpen280StoresNetinFY2018andFY2019;PerfumaniaExitsBankruptcy.
Source:FGRT
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October16,2017
DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
2.DigitalizationofRetailIsKeytoTakingCareofConsumersinEmergingAsianMarketsInhispresentation,Alibaba’sGlobalManagingDirector,GuruGowrappan,setoutthekeytrendsdrivingAsia’sfast-growingconsumermarkets,andshowedhowtobuildeffectiveandengagingrelationshipsthatbuildbusinessandloyaltyintheNewRetailera.
GowrappanpresentedthattheNewRetailconcept—theintegrationofonlineandofflineretailandlogisticsthroughdatatechnology—isthebestwayofreachingtheburgeoningconsumerclassinChina.HeidentifiedthetypicalfrequentChineseconsumerasfemaleandundertheageof35,whoshops4–5timesamonthandlargelyresidesintier-1andtier-2cities.AccordingtotradingdataonAlibaba’smarketplaces,theproductcategoriesthatarebestpositionedtobenefitinclude:
• Largestimportproductcategories:Fashion,beauty,health,maternity,personalcareandelectronics
• Fastest-growingproductcategories:Pet,homedécor,musicalinstruments,sportsequipment,kitchenandartsupplies
• Topsourcesofinternationalproducts:Japan,US,Korea,AustraliaandGermany
TocapturetheheartsandwalletsofChineseconsumers,GowrappanemphasizedhowcriticalitisforbrandstotailortheirbrandexperiencefortheChineseconsumers’shoppingjourney.ComparedtotheirUScounterparts,Chineseconsumersresearchbrandstwiceasmuchbybrowsingproductsandreviews—spendingatotalof3.4billionminutesadayresearchingproducts.Assuch,AlibabahasbeenhelpingbrandsbuildtheirpresenceonTmallandstrengtheningtheircross-bordere-commercesolutions.
Source:FGRT
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October16,2017
DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
Withrespecttodigitalizingtheconsumerjourney,Alibabahasbeenspearheadingtheretailtransformationbydrivingexperimentationacrossdifferentretailformatsanddigitalizingthecorecomponentsofretailoperations,includingproductmerchandising,ordering,paymentsandloyalty.
GowrappanwrappeduphispresentationbyreiteratingAlibaba’svisionforthefuture—tobuildthefutureinfrastructureofretailtobecomeacompanythatlasts102years.
3.LocalizeYourBrandStorytoInfiltratetheMindsetsofthe4.5BillionConsumersinAsiaPacificDigitalandmobilehavebeenshapingthemindsetsandexpectationsofconsumersinAsiaPacific,and,asdiscussedbyapanelofretailleaders,itisimperativeforbrandstoactaccordingly.EdithChen,AsiaPacificCEOofBrooksBrothers,believesthatitisincorrecttoviewAsiaconsumersasonehomogenousclass.Forexample,BrooksBrothershasninephysicalstoresinHongKongalone,whereasinIndia,ithasalimitedphysicalretailpresence,andsoitisessentialforthebrandtousesocialmedia.ToletIndianconsumerstouchandfeeltheproducts,BrooksBrotherssendsstylistsandstoreassociatestoconsumers’homestoprovideadviceandtakemeasurements.
Source:FGRT
DespitethehighdegreeofdigitalsavvinessofconsumersinAsia,thelevelofonlinesatisfactionintheregionwasonly57%,comparedto85%intheUS,accordingtoIngridSidiadinoto,ManagingDirectoroftheCustomerSolutionsGroupatUPSAsiaPacific,whoquoteda2017UPSsurvey“PulseoftheOnlineShopper.”Toimprovetheonlineshoppingexperience,brandsshouldstreamlinetheirreverselogisticsandreturnprocesses,andincreasetheirmulti-deviceandomnichannelcapabilities.
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October16,2017
DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
Inadditiontoomnichannelstrategies,itisimportantforbrandstotailorandlocalizetheirbrandexperienceforthediverseAsianconsumerclass.
SaeminAhn,ManagingPartnerofRakutenVentures,offeredUniqloasanexampleofacompanytailoringproductlinesforeachSoutheastAsiancountry.Uniqloalsolooksatweatherpatternstomoreefficientlydistributeinventoryrisk.
4.OneTactictoWinningintheNewRetailEraIsforRetailerstoMasqueradeasanEntertainmentCompany,BrandPlatformandDataEcosystemAllinOneInthefirstpartofhispresentation,DustinJones,ExecutiveVicePresidentandManagingDirectorofMacy’sChina,sharedhisjourneyinbringinga150-year-olddepartmentstoreintotheeraofNewRetail.HethenwentontodiscusstheinitiativesthatMacy’sChinaplanstoundertakeinthefourthquarterof2017.
• Withthesuccessfullaunchofmacys.cninOctober,theretailerhasmanagedtoreducethecostofcross-bordere-commerceby40%throughinnovationssuchasChinacustomsregistration.
• Fortherestoffourthquarter2017,Macy’sChinawillbepresentonfourdigitalplatformstoinitiateconsumerjourneyshappeningonmobiledevices:macys.cn,Macy’sinTmall,Macy’sappandMacy’sofficialWeChataccount.
• Macy’sChinawillalsoopenpopupstoresinShanghai,BeijingandHangzhouthatwillbebyinviteonlyandprovideadigitalexperiencethatencompassesdatacollection,virtualreality(VR)/actualreality(AR),foodtrucksandayogaroom.ThefirstpopupwasopenedonSeptember29inHangzhou.Macy’sChinahostedseveralkeyopinionleaders(KOLs)tolivestreamfromthepopupatoneofIntime’sdepartmentstores.
• Alsoinfourthquarter2017,Macy’sChinawillhostSingles’DayandBlackFridayshoppingfestivals.
Source:FGRT
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October16,2017
DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
5.ToStayAheadoftheCurveintheNewRetailEra,OneNeedstoThinkLikeaVC,BeAgileLikeaTechCompanyandLaunchNewBusinessModelsUnlessinnovativeinitiativesareundertaken,retailers’profitswilldeclinegoingforward,predictedVoravudhVarikarn,SeniorVicePresidentofOnlineBusinessatBigCSupercenter.Thisdeclineinretailers’profitsisprimarilydrivenbyfallingsalesresultingfrome-commercecompetitionandhighercostsfrominvestmentsinretailtechnology.
Thekeymessageistoputcustomersatthecenter,andoneexampleVarikarngavewastouseretailtechnologytocaptureconsumerdatasuchastrackingwhichshelvesconsumersstoptheirtrolleyat.Sixkeyinitiativesthatretailerscantakeare:
1. Reimaginingthestore
2. Deliveringauthenticexperiences
3. Usingtechnologyanddataasaweapon,notjustasanenabler
4. PersonalizingwithI-to-Irelationships
5. Takingontheagilityofatechcompany
6. ThinkinglikeaVCandlaunchingnewbusinessmodels
6.Cross-BorderE-CommerceEnablesRetailerstoSellintoNewMarketsDonZhao,CofounderandExecutiveDirectorofAzoya,andJoëlPalix,CEOofFeelunique,sharedtheirperspectivesonpenetratingtheChinesemarketthroughe-commerce.Thetwobusinesspartnersrecentlycelebratedtheirtwo-yearcooperationanniversary.
Source:FGRT
ThesessionbeganwithacasestudyofFeelunique,apremiumonlinebeautyretailer;thevideodemonstratedhowFeeluniquesetupitssaleschannel,builtbrandawarenessandimprovedcustomers’experiences.PalixsharedhisviewonhowtheChinesemarketisdiverseandchangingrapidly,makingitcriticalforFeeluniquetohaveareliablelocalpartnertohelpdevelopandexecuteitsChinastrategy.ForFeelunique’slong-termstrategy,PalixmentionedthatitisimportanttoincludeawiderbeautyproductrangeforChineseconsumers,whichcontainsboththemostpopularaswellasthe
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October16,2017
DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
nicheproductstocatertotheincreasingsophisticationoftheChineseconsumer.
Amajorfocusofthediscussionwasontrafficacquisition,asthisisbecomingmoredifficultforretailersinChina,andrequiresintegratedmethodsincludingmarketplaces,influencers,socialmediaandsocialcommerce.
ZhaoofAzoyaseescross-bordere-commerceasanenablerforretailerstoselltoconsumersacrossborders.HebelievesthereareprimarilytwowaysforabrandthatislessestablishedamongChineseconsumerstoenterthemarket:1)gowithmarketplaces;or2)gowithastrongretailer.Azoyaismainlyresponsibleforhelpingretailerpartnerstostarttheire-commercebusinessinanewmarket,includingmarketing,supplychainandlogistics.
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October16,2017
DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
DeborahWeinswig,CPAManagingDirectorFGRTNewYork:917.655.6790HongKong:852.6119.1779China:[email protected],CFAAnalyst
HongKong:2ndFloor,HongKongSpinnersIndustrialBuildingPhase1&2800CheungShaWanRoad,KowloonHongKongTel:85223004406London:242-246MaryleboneRoadLondon,NW16JQUnitedKingdomTel:44(0)2076168988NewYork:1359Broadway,18thFloorNewYork,NY10018Tel:6468397017
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