Retail News CRM

Author: Mei Ling Tan

  • Singapore Post Ramps Up China E-commerce Push

    Singapore Post Ramps Up China E-commerce Push

    Despite signs of a slowdown of imports into China, Singapore Post (SingPost) remains bullish on the prospects for e-commerce flows into Asia’s largest economy. The postal agency has upped its stake in Shenzhen-based e-commerce provider 4PX Information Technology.

    SingPost forked out US$25.6 million to acquire an additional 17.91% position in 4PX, one of China’s top e-commerce cross-border players, whose scope of services ranges from forwarding, express delivery and warehousing to software and consulting services for e-commerce vendors. The postal operator now holds a 36% stake in the Chinese firm.

    4PX runs warehouses in China, Australia, UK, Germany and the US, employing north of 2,600 staff. The company has over 20,000 customers in more than 50 locations in China and globally.

    “The additional investment in 4PX, with its extensive logistics capabilities in warehousing, express delivery and freight forwarding, is a key part of SingPost’s strategy to strengthen our integrated end-to-end e-commerce logistics solutions and to leverage on the rapid growth in China’s e-commerce activities,” said Goh Hui Ling, deputy CEO (international mail) of SingPost.

    With general cargo growth in the doldrums, logistics providers are keen on developing a footprint in e-commerce, which promises rich pickings and robust growth momentum. According to one estimate, global B2C volume is expected to reach US$2.26 trillion a year by 2020, with an annual growth rate of 15 to 20%.

    International carriers are particularly gung-ho on China, citing Chinese consumers’ rising cravings for international brands. Anselm Eggert, head of e-commerce at Lufthansa Cargo, stated that they are showing strong interest in European brands, especially health and beauty products.

    Freighter leasing firm Airborne Global Solutions invested US$16 million last September for a 25% stake in the nascent United Star Express, a new Chinese freighter operator that is expected to take to the skies halfway through this year. Its partners in the venture are Chinese Boeing 737 operator Okay Airways, a developer and an investment company, and Vipshop, the third-largest e-tailer in China, according to AGS president Rich Corrado.

    Postal agencies are pushing aggressively into this arena, their eagerness intensified by a need to make up for the ongoing shrinkage of their traditional letter mail business. With their delivery networks they have a strong advantage over competitors in the critical final-mile segment in their home markets, but they are also increasingly targeting international flows to other markets.

    Japan Post established its own website in China last autumn to offer Japanese merchandise to Chinese consumers. Orders are consolidated and moved by ocean vessel to Shanghai for overland distribution.

    China Post has been in hot pursuit of e-commerce business, which is reflected in the rapid growth of China Postal Airlines. According to one source, China Southern Airlines’ decision last year to bring two parked 747-400 freighters back into service was prompted by the Chinese postal agency.

    To develop its traffic from the postal agencies of Hong Kong and China, Cathay Pacific has implemented barcode scanning of mail at its stations in China and in Hong Kong. This enables the electronic transmission of departure, transit and arrival information. In a second phase, the airline is looking to integrate various IT interfaces – from booking to space management and mail warehouse transit management – to establish real-time data flow, said Mark Sutch, the airline’s general manager of cargo sales and marketing.

    For now many airlines view postal business as the biggest inroad into B2C e-commerce, but this will likely change. Eggert envisages greater involvement from carriers down the road. At this point Lufthansa is studying the market in order to be able to develop more targeted options later on.

    “I think in the future we will go beyond mail. I think the industry needs to think how to work together with partners,” Eggert said. This will require closer alignment, including some degree of IT integration. In light of the fact that the air cargo industry does not have a stellar track record in developing joint solutions, this will be a challenging avenue for operators to pursue, he added.

  • Huawei moves further into mobile payments

    Huawei moves further into mobile payments

    Apple and Samsung recognize that revenue from the sale of mobile devices, alone, cannot keep shareholders happy.

    With the vendors venturing into what is arguably one of the most exciting spaces in the financial services space – payments – it begs the questions of who will follow suit and whether the market can afford multiple payment providers.

    Not to be left behind, Chinese mobile phone device manufacturer, Huawei, is accelerating its payments ambition in 2016 with two significant announcements in the first quarter of 2016.

    The first is an agreement with Bank of China to jointly co-develop what the two organizations are claiming to be the next mobile based payment system under the Huawei Pay label. This was followed by a separate announcement with China UnionPay, the country’s state-run bank-card processor.

    This is not Huawei’s first foray into payment. Unofficially, Huawei Pay debuted in China with the launch of the company’s latest flagship smartphone – the Mate S in December 2015 following a test run of the payment service in September 2015. Using NFC technology, placing the Mate S in close proximity to a China UnionPay POS terminal with Quick Pass function will launch the Huawei Pay service.

    Users can complete the transaction via fingerprint authentication. The partnership with UnionPay holds the promise of extending Huawei Pay across China to a broader spectrum of Huawei handset users – mostly smartphones equipped with fingerprint sensors and an NFC chip simply by downloading the Huawei Pay app.

    China UnionPay, which holds a monopoly on bank-card payments in the country, also works with Apple Pay, which was launched in China last month.

    Local market research firm iResearch estimate that third party mobile payment transactions reached 2.42 trillion yuan in the third quarter of 2015, a 64% jump from Q2 2015. The China Internet Network Information Center estimated mobile payments to have risen to 357 million, up 60% from the previous year.

    The Chinese mobile payment market is expected to get very crowded rapidly with other mobile device manufacturers, including Xiaomi, ZTE and Lenovo, rumored to be developing their own mobile payment service. Xiaomi is doing so following its acquisition of a local payment company – Jiefu Ruitong in early 2016.

    According to iResearch China’s mobile payment is dominated by Alipay (70%) and WeChat Wallet (19%). To compete in this market Huawei plans to secure the assistance of more banks as part of its smartphone launch strategy. Without releasing details the company said it is designing more payment scenarios for its smartphone users.

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  • HKG offers instant ‘cash’ to airport shoppers

    HKG offers instant ‘cash’ to airport shoppers

    Hong Kong International Airport (HKG) is running a double promotion to travellers, which includes instant rebates in the form of coupons worth up to HK$5,000/$645, as well as a free delivery service.

    From 1-11 April travellers spending more than HK$20,000 and HK$50,000 by electronic payment on the same day at the 68.5m-passenger hub can receive an instant rebate of HK$1,200 and HK$5,000 respectively in the form of HKG cash coupons. These must be spent at airport outlets, TRBusiness has confirmed.

    Separately, travellers who spend more than HK$1,000/$129 in a single transaction at HKG airport benefit from complimentary local delivery. Free delivery service to mainland China, Macau and Taiwan is also offered to travellers who spend more than HK$2,500 on clothing, bags and accessories in a single transaction.

    SHOPPING AND DINING OFFERS

    As well as these offers, during the promotion period, HKG is collaborating with its retailers to provide travellers with a series of other shopping and dining offers, as well as a selection of complimentary gifts. Travellers can get more details by scanning the QR code on the promotion materials.

    HKG was the fifth most important duty free and travel retail sales location in the world in 2015.

  • Samsung won’t like it, but Xiaomi is coming to South Korea

    Samsung won’t like it, but Xiaomi is coming to South Korea

    China’s Xiaomi is now expanding in a country where the competition is particularly tough: South Korea.

    The land of Samsung and LG isn’t an easy proposition, but Xiaomi isn’t doing it alone. The company has this month inked a number of deals with Korean suppliers and distributors to ensure that it will have a presence on the ground in the country.

    Xiaomi has reached an agreement with Youmi and Koma Trade, making the two Korean companies the only official dealers of Xiaomi products in the country.

    The two partners will sell a variety of Xiaomi products, including battery packs, headphones, the Mi Band fitness tracker, and the Ninebot “hoverboard.” Neither company will sell Xiaomi phones, but they will be able to repair the devices and provide support.

    The land of Samsung and LG isn’t an easy proposition, but Xiaomi isn’t doing it alone.

    The paper says the partners are “small companies whose core business has become providing services for Xiaomi. Xiaomi selected the two companies since they can devote all their energy to the Chinese tech giant.”

    In addition to building up its network in the land of Samsung, Xiaomi has also been working on ecommerce and online payments.

    On March 8, news broke that Xiaomi’s smart TVs would be sold in Korea by ecommerce giants Gmarket and Auction.

    Xiaomi has also inked agreements with a number of other Korean ecommerce marketplaces, including E-Mart, ZMI, and 11st. This isn’t exactly a surprise – Xiaomi has always emphasized ecommerce sales beyond its own website, with deals on Alibaba’s Tmall and Taobao in China. But in South Korea, where the ecommerce market is a bit more fractured, the company is spreading its resources around.

    The smartphone conundrum

    None of those stores, however, are selling Xiaomi phones – yet. Aside from the occasional short-lived sale online, it’s rare to see Xiaomi’s smartphones for sale in the country, other than second-hand or from random Chinese importers. Ecommerce market KT briefly sold Xiaomi phones in January, but had to close the sale after just two days citing “legal issues.” It’s not clear if Xiaomi officially backed those sales.

    But those “issues” haven’t scared Xiaomi away from the Korean market. Just today, the Korea Herald reported that Xiaomi has filed for a patent in South Korea for its Mi Pay epayments service – a phone-based service that can’t exactly be used with its battery packs or TVs.

    Xiaomi certainly has smartphone sales in Korea on its roadmap.

    The Mi Pay patent shows that Xiaomi certainly has smartphone sales in Korea on its roadmap. The Herald speculates what many have long expected – that Samsung and LG have put pressure on Korean retail companies and mobile carriers to keep Xiaomi out.

    But their embargo doesn’t look like it will last forever. Xiaomi has managed to find enough local partners to gain a solid foothold in the country, and it looks like it will only expand from here. Samsung and LG might not like it, but it looks like their Chinese competition will be hawking smartphones in their backyards any day now.

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  • Sushi for W390 in Korea

    Sushi for W390 in Korea

    Korea’s retail giant Homeplus launched an expanded line of sushi, which will sell for 390 won (30 cents) each until April 6.

    Homeplus announced Wednesday that it built on their existing sushi line “Chef Sushi,” which was originally limited to 16 types, to 34 variations. These bite-sized delicacies include localized specialties such as tuna-mayonnaise and beef bulgogi sushi, which will cater to the tastes of children and customers who seek something other than seafood on their sushi rice.

    Homeplus’ Convenient Cooking Team manager Heo Na-young said, “We have seen a rise in demand for sushi at our branches due to the overall improvements in retail sushi qualities and the effects of recession.”

    Heo said Homeplus will continue to expand the selection of sushi provided by the retail shop to meet customers’ needs and wants. Chef Sushi will maintain an affordable price range after the promotional period ends.

    Homeplus also sells 8,900 won ($7.7) fried chickens.

  • Indonesian shoppers flock to Singapore as rupiah surges

    Indonesian shoppers flock to Singapore as rupiah surges

    Tourist arrivals will spike this year.

    Buoyed by the resurgent rupiah, Indonesian holidaymakers are once again trooping to Singapore to shop and splurge, according to a report by Bloomberg.

    The rupiah has surged 9.9 percent against the U.S. dollar over the past six months, second only to Malaysia’s ringgit among emerging markets, as slowing inflation and a nascent commodity-price recovery lured money to the nation’s assets.

    “The rupiah has done really well this year and it makes things look cheaper elsewhere for Indonesians,” said Nizam Idris, head of foreign-exchange and fixed-income strategy at Macquarie Bank Ltd. in Singapore. “The currency will find support from decent yields and bottoming commodity prices.

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  • 3 things you need to know about Hong Kong’s online shoppers

    3 things you need to know about Hong Kong’s online shoppers

    The line between browsing and buying online and offline in Hong Kong is blurring as technology enables nearly everything to become a digital touch point for consumers. Following the success of e-commerce boom in China, Hong Kong retailers are also keen to leverage the “online shopping fever” these years, and some e-tailers have started organizing similar Online Shopping Festivals in Hong Kong. But the real question is: what are the consumer perceptions toward these shopping events?

    Based on our recent study, here are some highlights you ought to know about Hong Kong e-shoppers:

    LESSON 1: KNOW YOUR CONSUMERS

    Generally speaking, 88% of Hong Kong consumers shopped online in the past 12 months. The young generation (aged below 30) are all active e-shoppers, while one-third of the e-shoppers in Hong Kong purchased online within one week.

    LESSON 2: KNOW YOUR POINT OF SALES

    Over 80% consumer shop online through desktop computers, while two-out-of-five online shoppers choose their smartphone for e-shopping.

    LESSON 3: KNOW YOUR PRODUCT STRATEGIES

    The top three most popular categories for e-shoppers are clothing, travel package/ air tickets/ hotels, and restaurant coupons.

    E-commerce is quickly becoming crucial to growth because creating a relevant, integrated and engaging shopping experience means winning offline as well.

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  • Here’s why new NFC-enabled SIM cards may flop in Singapore

    Here’s why new NFC-enabled SIM cards may flop in Singapore

    The service is too costly. Singapore’s telco operators recently unveiled new NFC-powered SIM cards, which will allow commuters to pay fares using their mobile phones. The SIM cards will also be accepted at 30,000 ez-link terminals across the island.

    However, the new SIM cards might fail to gain enough popularity because of several stumbling blocks, according to a report by DBS.

    The report noted that the popularity of iPhones in Singapore is a big hurdle to the rise of the new SIM cards. The NFC-powered SIM cards are incompatible with iPhones, which only support Apple Pay and make up a third of mobile phone sales in the country.

    DBS also highlighted that ez-link is not accepted at 7-11 stores and many other retail outlets, which prefer NETS and credit cards.

    Apart from these hurdles, the cards are also extremely expensive at $37.50 apiece.

    “EZ-link is not widely popular for retail transactions even in Singapore. Plus NFC enabled payment is not adding any security feature to the ez-link card while “Apple Pay” adds security to credit card transactions. So we do not see that the NFC enabled SIM based payments will be widely used. Anyway, telcos may not get much commission out of the transactions, as the bulk may go to ez-link for its large customer base using it for buses and trains,” the report noted.

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  • Hong Kong luxury ambitions wane

    Hong Kong luxury ambitions wane

    New consumer research suggests the Hong Kong luxury market is set for another challenging year.

    While 42 per cent of consumers surveyed in China are looking to spend more on luxury items, in Hong Kong the figure is only 25 per cent. That marks a five percentage point drop from 30 per cent of last year, according to the seventh edition of the China Luxury Forecast, released by PR company Ruder Finn and Asian market research company Consumer Search Group (CSG).

    The report says the results further reinforce last year’s conservative approach to retail spending by Hong Kong consumers.

    Growing wealth has led to consumers broadening their international horizons, with spend on travel still the top luxury category for both mainland China and Hong Kong. More than half (53 per cent) of consumers on the mainland say they intend to spend more on luxury travel in the coming year, up from last year’s figure of 50 per cent. This is expected to drive more growth in luxury markets outside China.

    In Hong Kong the luxury travel picture again paints a decrease in purchase intention, down by 5 per cent compared to last year.

    Bright spot

    Meanwhile, eCommerce continues to be the bright spot for luxury brands, with online purchases by mainland Chinese and Hong Kong customers amounting to 26 and 20 per cent respectively of luxury spending.

    Surveying 1040 consumers from more than 120 cities in China and 301 from Hong Kong, the forecast covers people from tier 1, 2 and 3 mainland cities. For first-tier cities it interviewed 300 consumers, 400 from second-tier cities and 340 from third-tier cities. Their average annual household income was RMB 833,509 (US$128,293.35) in the mainland, and HK$957,006 (US$123,340.22) in Hong Kong.

    When it comes to online purchases, accessories and beauty are the favoured products, and official brand websites the most preferred digital channels. Customers have also indicated higher confidence in spending online without having first visited physical stores, with an average number of two visits, down from 2.3 and 2.6 visits last year in China and Hong Kong respectively.

    Word of mouth is the key influencer for product choice, surpassing celebrities, luxury communities and key opinion leaders.

    Hong Kong and China customers also value “Chinese” elements differently when it comes to buying products or services. On the mainland, 58 per cent of respondents said that “embedded Chinese elements” were “extremely or very important”, compared to sentiment in Hong Kong, at just 11 per cent. Also, 55 per cent of Chinese consumers said they appreciated “elements symbolising good luck” compared to 25 per cent of Hong Kong consumers.

    Most valued by Hong Kong consumers (44 per cent of respondents) were elements reflecting Chinese heritage, which were second-most appreciated by Chinese consumers (52 per cent).

    Travelling to shop

    China’s luxury travel market continues to grow, with Chinese respondents taking four domestic and three international trips, while in Hong Kong luxury consumers take 3.7 international trips annually. Japan, Taiwan and China are the top three destinations for those from Hong Kong, while Hong Kong tops the list for mainland travellers, followed by France and Japan.

    For mainland consumers, culture and history were the main reasons for destination choice (63 per cent), while Hong Kong travellers most valued transportation convenience (50 per cent). Shopping was the second most popular motivation in both markets (46 per cent and 47 per cent in China and Hong Kong respectively).

    Most luxury consumers in both Hong Kong and mainland China have a budget for shopping when travelling abroad. As many as 57 per cent of Chinese consumers and 46 per cent in Hong Kong know in advance what brands they will buy.

    “While the demand for luxury remains strong in mainland China, Hong Kong luxury consumers are showing lesser intent in luxury purchase,” says CSG Hong Kong executive director Simon Tye.

    “Hong Kong customers are still interested in discovering new luxury brands and experiences. They are very discerning customers who know and appreciate quality products.”

    Travel and beauty show the most significant growth in the luxury sector, according to Ruder Finn Asia GM for luxury Gao Ming.

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  • Clarks retailer S Culture ends year in the red

    Clarks retailer S Culture ends year in the red

    Clarks shoe brand retailer, S Culture has announced a loss for the year and will not pay a dividend.

    Chairman Chong Hot Hoi described 2015 as the worst year for Hong Kong retail sales since  2002, driven by the fall in big spending tourists from the mainland and weak domestic consumer spending.

    S Culture recorded a same-stores sales decline of 6.6 per cent and a net loss of HK$16.4 million for the year. Chong said the opening of new retail outlets during 2014 and early 2015 contributed to the loss, as they were yet to break even under the unfavourable atmosphere of the retail market during the year.

    S Culture sells shoes under the Clarks, Josef Seibel, Petite Jolie and The Flexx retail brands in Hong Kong, Mainland China and Taiwan. It flagged a looming loss in a profit warning issued in early July.

    But despite 2015 being a year to forget, the company is optimistic about 2016.

    “Hong Kong is bracing for greater economic challenges as the prospective interest rate increase shall induce capital outflows that could pressure Hong Kong as the Asian financial hub at a time when China’s economy is growing at its slowest pace in the past 25 years,” said Chong in the company’s trading announcement.

    “Looking ahead, the near-term outlook for retail sales will still be constrained by the weak performance of inbound tourism as cited by the government. We would also watch closely the impact from dimmer global economic prospects amid US interest rate normalisation. To this end, we had been imposing measures and applying more flexible operating tactics in order to minimise such effects to our operations as a whole. In the meantime, while there had been signs

    that the general operating costs, such as market rental level, were declining, we were still cautious about the other operating costs such as staffing and utilities as their nature was downward sticky,” he said.

    “Despite the above, we still remain positive and maintain our belief in our business. While we are still experiencing unfavorable market drivers in the local retail market, we are still confident that the group would be poised to be highly attentive to the changes in the retail market and apply the appropriate strategies to tackle the existing challenges and keep our pace for steady development, especially in the mainland. We still hold the same view about mainland consumer market and continue with our strategy to increase our presence in the mainland.”

    S Culture has now expanded into the cities of Shanghai, Qinhuangdao, Haikou, Qingdao, Songyuan, Zhengzhou, Harbin, Luoyang, Dandong and Beijing through collaborating with the local retailers and operates four company-owned stores with its brands well-received in the mainland, Josef Seibel and The Flexx.

    “We expect to increase our market share in the Mainland by utilising both on- and off-line channels whichever is more effective in the case.”

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  • Taco Bell China on the way

    Taco Bell China on the way

    Mexican-inspired fast food is about to tickle Asian palettes, with the first Taco Bell China restaurant scheduled to open this year.

    Yum Brands! CEO Greg Creed, speaking at a consumer and retail conference in New York, says the first taco Bell China outlet will open in Shanghai.

    US-headquartered Yum! Is in the process of separating its China business into an independent, publicly traded company this year. It has about 7000 KFC and Pizza Hut restaurants in China and believes the spin-off will boost returns and increased asset value for shareholders of both companies post-split.

    Yum! plans to franchise 96 per cent of its outlets by the end of next year, and believes that model will enable it to nearly treble the store network from the present 6900 stores to 20,000.
    A subsidiary of Yum, Taco Bell is an American chain of fast-food restaurants based in Irvine, California. Founded in 1962 by Glen Bell, it has more than 6600 stores across mainland US with 175,000-plus employees.

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  • Vietnam mobile phone market heats up

    Vietnam mobile phone market heats up

    The Vietnam mobile phone market is heating up, with major retailers pushing smaller businesses to the wall as new branded stores open almost every week.

    With limited marketing budgets, smaller retailers, the traditional mainstay of the mobile phone business, are unable to complete, reports TalkVietnam.com.

    Mobile World, which has a 39 per cent market share with its 603 Thegioididong outlets nationwide, has unveiled a plan to open a further 400 stores.

    Other retailers such as FPT Shop, VienthongA and Viettel Store are also scrambling to open more shops. FPT has more than 250 outlets already, VienthongA has more than 200, and Viettel Store has more than 300.

    FPT and VienthongA aim to open 50 to 100 stores this year, and new player VinPro plans to double it 100 outlets this year.

    Meanwhile, small phone retailers are now focusing on selling top-up cards for mobile phones, accessories and used phones. Some also sell such products as portable speakers, Wi-Fi transmitters and sports cameras to stay solvent.

    Small mobile phone shops hold between 30 and 35 per cent of the market, but their share will shrink, says FPT Retail Digital general director Nguyen Bach Diep.

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  • Li Ning skips out of the red

    Li Ning skips out of the red

    Thanks to a health boom on the mainland, Chinese sportswear brand Li Ning has skipped out of the red to turn a modest profit after three years of losses.

    For its latest financial year, it had a net profit of Rmb14 million (US$2.2 million), reversing from a Rmb781 million loss in 2014. Revenue grew 17 per cent to nearly Rmb7.1 billion.

    Over the past three years, the brand has restructured, shedding 20 per cent of its inventory, closing thousands of underperforming stores and adding more than 300 directly run outlets. It also increased its eCommerce inventory.

    In a filing with the Hong Kong stock exchange, Li Ning says retail, wholesale and eCommerce outlets all achieved double-digit revenue growth last year.

    “Supportive national policies stood the sportswear industry in good stead,” says the company. “The initiative to lead an eco-friendly life has deeply implanted the idea of pursuing a healthy lifestyle in the hearts of people.”

    Li Ning is backed by private equity group TPG Capital and Singapore sovereign wealth fund GIC. The company was founded by Chinese gymnast Li Ning, who won three gold, two silver and one bronze medal at the Olympic Games in Los Angeles in 1984. Following his retirement, he set up the company in 1990, selling footwear, apparel, accessories and equipment for sport and leisure.

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  • Oh!K expands into Indonesia

    Oh!K expands into Indonesia

    K-entertainment fans in Indonesia will now be able to catch the latest and best Korean content within hours of its world premiere with the launch of Oh!K on Tribe.

    This new OTT service from XL, a telecommunications operator, offers its subscribers via the Tribe app exclusive access to fresh, first-run, localized and high-quality video, via mobile devices and online.

    Oh!K currently boasts a slew of popular series including Monster, which will premiere later this month, and Marriage Contract, which is currently running on the channel. These express titles air within 24 and 48 hours of Korean telecast, respectively.

    “Since Turner launched Oh!K in October 2014, the channel’s reach and popularity has grown significantly,” said Phil Nelson, Turner’s managing director for Southeast Asia. “In just 18 months, partners in Singapore, Malaysia, Hong Kong and now in Indonesia with Tribe, have responded to the growing appetite for quality Korean content.”

    Other express titles on Oh!K include Just Married and Korea’s No. 1 variety show Infinite Challenge – starring celebrity hosts Yoo Jae Suk, Park Myung Soo, Jung Joon Ha, Jung Hyung Don, Hwang Kwang Hee and Haha.

    Oh!K’s programming is also supplemented by special live simulcasts from Korea, such as the MBC Drama and Entertainment Awards and Gayo Daejun (Korean Music Festival) available on the channel.

  • Alibaba taps VR to enhance shopping experience

    Alibaba taps VR to enhance shopping experience

    The global virtual reality market to grow at a rate of 96% by 2019, according to a new report made available by Research and Markets.

    VR is being adopted in a wide variety of applications ranging from healthcare, gaming devices, public entertainment, prototype creation to military exercises.

    Chinese e-commerce giant Alibaba has now set up a research lab as it looks to use VR to enhance the shopping experience for its 400 million users.

    The company is also exploring how VR technology can be applied to its other services, including online games and video streaming, according to reports.

    Head-mounted displays have created opportunities for VR in a number of applications. A head-mounted display consists of an image source, collimating optics, and a mechanism to mount the device on the head.

    The device is wearable, and projects images and information relative to the user’s line of sight in front of the user. A report on the HMD market predicts growth of 49% over the next five years.

    Virtual reality devices, which are compatible with smartphones, can help users by providing specific information about their requirement on-the-go, without pulling out their portable devices. This technology is expected to commercialize in 2016 and could be worth $2.30 million in 2016.

    Alibaba has already created three-dimensional visuals for hundreds of products and will issue standards for merchants to create VR-enabled shopping options. It is also said to be working on creating music and videos.

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