Retail News CRM

Tag: China

  • Japan’s Lixil Group launches on JD.com

    Japan’s Lixil Group launches on JD.com

    Japanese housing equipment company Lixil Group has launched a flagship store on JD.

    The digital flagship marks the Tokyo-based company’s first foray online, where it will showcase a curated collection of 150 products from four of its brands: Grohe, American Standard, Lixil Kitchen, and Inax. The products range from ceramic bathroom items and bathroom cabinets to shower fittings and one-stop kitchen fit out solutions, all aimed at Chinese consumers.

    In a statement, JD said demand among Chinese consumers for high-quality home products had increased during the coronavirus pandemic as people spent more time at home.

    China’s home-decoration market is expected to reach RMB 3.2 trillion (US$454.3 billion) by 2023, and Chinese consumer demand for high-end home decoration products is on the rise.

    Besides showcasing products, Lixil has professional designs on call to provide shoppers with free design consultations for JD customers.

    “The cooperation with Lixil Group significantly enhances JD’s offering for mid to high-end smart kitchen and bathroom products,” said a JD spokesperson.

    “The partnership is also beneficial to JD’s home decoration supply chain, providing one-stop solutions for its customers. Lixil Group will provide an overall solution that can better meet the complex needs of high-end customers.”

    The new flagship is expected to be just the first step in a growing relationship between the two companies, which are now in the early stages of planning omnichannel solutions through offline stores and other digital initiatives.

  • How Chinese jeweller Ideal transformed staff into live-streaming KOLs

    How Chinese jeweller Ideal transformed staff into live-streaming KOLs

    Shenzhen’s multi-brand jeweler Ideal has transformed its 18-year-old traditional business model to a New Retail business virtually overnight in light of the coronavirus crisis.

    The retailer rolled out a transformation initiative dubbed “Thousand People, Thousand Stores” by establishing ‘online cloud stores’ through live streaming, turning its ranks of sales associates into live stream broadcasters.

    The jewelry industry traditionally has a high dependency on physical brick-and-mortar outlets due to the nature of the high-ticket items it sells. However, with the pandemic forcing stores to shutter and consumers to stay home, Ideal fast-tracked its New Retail plans originally scheduled for launch in May to navigate the coronavirus crisis in February.

    With several brands under its umbrella, the group had first trialed community marketing with its sister brand Cemni where it garnered more than 100 fan-community groups engaging with more than 50,000 people within three days of launching online. The retailer has admitted it was difficult to turnaround multiple subsidiaries and sub-brands, resulting in a huge test of agility and resilience as it created a virtual ‘store’ experience to replace physical shops.

    The push to go online was undoubtedly driven by the digital-savvy Gen Z consumers in addition to the rising competition from decentralized D2C jewelry brands. Shifting its focus from its traditional business model, Ideal had developed a new younger range of fashionable jewelry pieces, different to its offline offer, to attract a new customer segment online. Its brand-new product selection showcases fine jewelry pieces at an economical price point starting at RMB1000 (US$141), with a diamond ring valued at RMB3000 ($424). Ideal also plans to introduce more luxurious and high-value pieces into the mix as its client base matures with stabilizing spending power.

    The transformation of jeweler Ideal’s physical store network into an online business involved transitioning its in-store sales staff to become live broadcasters, each managing their own ‘store’. Ideal chose to partner with YouZan, a SaaS retail-software and service provider that builds mini-programs within WeChat, which enable brands and influencers to sell natively within the platform. Using YouZan’s platform as a virtual warehouse, its retail stores, and sales associates can now collectively share the total warehouse inventory nationwide.

    The brand curated most marketable products for its online entity and had set up sales associates with YouZan accounts to transact through their own private domains within their WeChat community. Under the new business model, sales associates earn a commission ranging from 10 to 50 percent on each sale, a huge jump from the original 3 percent an employee would have received from in-store sales. With high incentives set in place, Ideal hopes to encourage its sales associates to be more aggressive with their selling. Very early results show more than 2000 pieces sold, achieving more than RMB2 million ($282,000) in revenue. On Valentine’s Day, the brand also sold a 5.01-carat diamond ring for RMB99,000 ($14,000) online.

    To maintain the interest of its franchisees, Ideal has also broadened its transformation strategy to include its partners into the New Retail system. Franchisees’ sales staff are incorporated into the New Retail model, and will not need to carry the cost of goods or the risk of returns.

    IiMedia Research predicts live-streaming e-commerce will hit RMB916 billion (US$129 billion) in value this year and reach 526 million users online. Ideal transformed its sales associates into KOLs firstly by nurturing and empowering them through online training courses. Expanding its existing online business school from 2010, the retailer has supercharged its course-based system to launch more online live courses nationwide. A grading system for sales associates has been set in place with training content customized to their level.

    Ideal has also partnered with an agency managing Tmall live broadcasters to direct and guide its sales associates. Jewelry expert and KOL broadcaster Lan Congge was recruited to train and empower Ideal’s employees in how to successfully upgrade their broadcasting skills to maximize sales.

    Jeweler Ideal has tasked each regional team with pushing out and endorsing the group’s New Retail plan among its employees. Regional stores have curated their own selections according to the consumption characteristics of their local customers. Yet, certain cities with a stronger consumption power are directed to specialize in content creation whereas stores in prefectures are to create more personal and interactive content during live streaming by acting as a personal stylist, offering peer advice and using discounts and promotions to attract new sales.

    As older members of the community are synonymous with existing customers, sales staff look to retain their client base through promotional activity such as birthday offers and personalized recommendations. To attract new and younger clients, sales associates are encouraged to create an interactive and dynamic selling atmosphere such as using flash sales and QR codes for direct orders as a means to shorten the conversion path.

    Bytedance’s short video platform Douyin currently reaches more than 400 million daily active users making it one of the most powerful social media platforms in China. The unique selling point of jeweller Ideal has always been storytelling, so now the company plans to begin marketing the story of the brand and its culture on Douyin.

    As part of its strategy to boost exposure and manipulate its algorithm, the aim is to have each virtual store follow the brand’s main account. From there, Ideal’s official account will reverse-generate interest to each of its individual smaller stores. The Douyin profile will provide content support for thousands of its virtual stores to drive traffic and popularity and in turn boost sales.

    However as Douyin’s e-commerce features are still maturing, Ideal will focus for now on leveraging the platform’s user base to promote its brand culture, while pushing the platform to develop e-commerce as part of its longer-term plan.

  • Alibaba promises ‘spring thunder’ to support SMEs during the coronavirus crisis

    Alibaba promises ‘spring thunder’ to support SMEs during the coronavirus crisis

    Alibaba group chairman and CEO Daniel Zhang has launched the “2020 Spring Thunder Initiative” to help small and medium businesses ride out the coronavirus pandemic.

    “We will … create new supply chains, stimulate new demand, and promote new trade through a series of aggressive measures,” he promised in a letter to staff.

    Zhang says Alibaba will work to help export-focused SMEs expand into new markets through AliExpress, Lazada and Tmall World, offering some companies resource support, fee reductions and fast-track processing to help them transform and develop their business in China.

    The company will activate manufacturing belts, incubate a group of “Super Producer IP” designations, and foster 10 digitized manufacturing clusters with production output valued at tens of billions in RMB.

    Another goal is to help 1000 factories develop direct-to-consumer sales in excess of RMB 100 million (US$14 million) within three years.

    Alibaba plans to help extend “immediate settlement” services until June 30, helping alleviate financing challenges for SMEs affected by trading challenges during the coronavirus crisis.

    And the e-commerce giant plans to help the agricultural sector grow through digitization along with creating 1000 Alibaba-run digitized agricultural centers across China.

    Alibaba’s online merchant bank Ant Financial is to work with hundreds of traditional banks to provide zero-contact loans to “tens of millions of small and micro businesses” says Zhang.

    His memo to staff, who he calls ‘Alibers’ is reminiscent of founder Jack Ma’s letter to staff 12 years ago during the financial crisis of 2008 when the company rolled out major relief initiatives for SMEs to survive the “economic winter”.

    At that time, three initiatives – “Dark Cloud,” “Wild Winds” and “Spring Thunder” – collectively helped 40 million SMEs to join the Alibaba ecosystem.

    The full text of Zhang’s letter to staff follows:

    Dear Alibers

    We are living through extraordinary times and Covid-19 is a battle being fought on a global scale. Our society, our economy and our everyday lives have been devastated by the pandemic; it has brought about monumental change. We, together with the rest of the world, are facing a future full of uncertainty, and it is more important than ever that we take immediate action.

    Small and medium businesses (SMEs) are the lifeblood of an economy. If SMEs are alive, then the economy will remain alive. If SMEs are thriving, then the economy will thrive. Twelve years ago, during the 2008 financial crisis, we rolled out three major relief initiatives for SMEs to survive the economic winter. The three initiatives – named “Dark Cloud”, “Wild Winds”, and “Spring Thunder” – collectively helped 40 million SMEs to fully absorb the confidence and conviction of our e-commerce platform for rehabilitating their business. Not only did we help to resolve the immediate challenges in their operations management and financing, but we also clearly improved their competitiveness in the long run. We remain incredibly proud of our decisions back then.

    When Alibaba was established 20 years ago, we defined our mission “to make it easy to do business anywhere.” The meteoric growth of the Chinese economy, together with advancements in internet and digital technology, and our unwavering commitment to our mission to serve SMEs have all helped make Alibaba what it is today. Given the massive uncertainties faced by the global economy and society here and now, we must stand arm in arm with SMEs around the world and fight the oncoming headwinds together. We must use the power of the Alibaba Digital Economy platform to take on the toughest challenges, and bring back confidence and inspire hope for everyone. The challenges we will face may be tougher than anything we’ve experienced over the past 20 years. But the bigger the crises, the stronger the connection between Alibaba and SMEs. The tougher the business environment, the more Alibaba needs to step up and fulfill our mission.

    Today, I am formally announcing the launch of the 2020 Spring Thunder Initiative. We will deploy the power of commerce and technology that Alibaba has harnessed over the past 20 years to create new supply chains, stimulate new demand, and promote new trade through a series of aggressive measures. We will continue to build out the new modality of essential infrastructure needed for the digital economy era. We will take every necessary action to help SMEs triumph over this economic winter.

    2020 Spring Thunder Initiative will include, but not limited to, the following measures and actions:

    • Help export-focused SMEs to expand into new markets through AliExpress, Lazada and Tmall World. Simultaneously, help a subset of these SMEs to transform and develop their business in the China market through measures such as resource support, fee reductions and fast-track processing.
    • Activate manufacturing belts, incubate a group of “Super Producer IP” designations, and foster 10 digitised manufacturing clusters with production output valued at tens of billions in RMB. Also, help 1000 factories realise direct-to-consumer sales of over RMB 100 million within three years.
    • Help the agriculture sector to prosper through digitisation, and create 1000 Alibaba digitised agricultural centers across China.
    • Help alleviate financing challenges for more SMEs by extending “immediate settlement” services until June 30th. Ant Financial online merchant bank will work with hundreds of traditional banks to provide zero-contact loans to tens of millions of small and micro businesses.

    The pandemic has exacted tremendous pain to our world, but it cannot stop hope from being born. In the global and China fight against the pandemic, Alibaba has proven to be a bulwark in the battle through our concrete actions. This pandemic will ultimately end, and we will eventually see the beginnings of new life. We must band together with the SMEs that need the most help, and convert Alibaba’s resources into strength for the SMEs. We must turn the “danger” brought about by the pandemic into “opportunity” for SMEs to prepare for the future through digital transformation. Now is the time for Alibaba to give back to our community and to give back to our SMEs!

    Sunshine always arrives after the rain. My fellow teammates, let’s get started!

    Daniel Zhang

    Alibaba Group Chairman and CEO

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  • Nervous Chinese consumers hesitating to return to retailers

    Nervous Chinese consumers hesitating to return to retailers

    Mainland Chinese retailers are discovering that a return to normal business after the coronavirus will take longer than expected.

    Shopping malls and high-street shops have begun to reopen across the country as the worst of the pandemic which paralyzed the nation in February appeared to be over.

    According to figures from China’s Ministry of Commerce, about four in five restaurants and cafes and 90 percent of commercial facilities have now reopened.

    But retailers are reporting footfall is well down on pre-coronavirus levels. One worker at a Walmart store in Shanghai told a reporter that customer numbers were running at about half the usual level. “Sales are not growing at all.”

    Data from the China Chain Store & Franchise Association shows that more than half of companies operating shopping malls expect a decline in sales of between 30 percent and 70 percent during the first quarter of this year. None expect growth.

    Fast-food operator Yum! China had earlier reported in a shareholder update that customer numbers were down by about 20 percent late last month, but it expected turnover to steadily recover. Store closures peaked in mid-February when about 35 percent of the company’s network of KFC, Pizza Hut and Little Sheep chains were closed, the balance offering delivery only. Almost all stores are now trading again.

    But the problem for retailers – ranging from food to fashion – is that consumers remain nervous about the potential to contract the virus and are continuing to practice social distancing. This has led to many who may have routinely dined out after work, eating at home instead.

    Other consumers are practicing frugality due to lost earnings or concerns about their ongoing job security, while many Mainland Chinese consumers are shopping online.

    While shops in major cities have been given the official green light to resume trading, many luxury stores remain closed.

    Electrical goods retailer Suning says some of its stores are experiencing only about half the pre-coronavirus footfall.

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  • Pinduoduo collects US$1.1 billion in private funding

    Pinduoduo collects US$1.1 billion in private funding

    Chinese e-commerce platform Pinduoduo has successfully raised US$1.1 billion in a private funding round.

    The firm will use the new funding, some of which was contributed by long-standing investors, to capture “additional opportunities” during a period when the world’s economy is affected by the coronavirus pandemic. Investors in this funding round were granted 2.8 percent of ordinary shares in the firm.

    The Shanghai-based business, which is a local competitor to Alibaba, saw poor fourth-quarter revenues following the impact of Covid-19, with a loss of US$250 million.

    “Pinduoduo surpassed RMB1 trillion [$140.9 billion] in annual gross merchandise value (GMV) in less than five years,” said Pinduoduo VP of strategy David Liu, “and we are confident that we will see robust growth beyond our current 585 million user base.

    “The extra funding gives us the strategic flexibility to capture opportunities to further benefit our users, as we bring interactive experiences, such as our new live-streaming features, and wider variety of value-for-money products to them.”

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  • Digital Payments in China Surge

    Digital Payments in China Surge

    China’s digital payment market grew to $8.4 trillion in the last quarter of 2019 and there are signs of still robust momentum in the months following the outbreak.

    By transaction volumes, Alipay retained the top rank with 55.1 percent followed by Tencent’s two platforms – WeChatPay and QQ Wallet – at 38.9 percent, according to a report (Mandarin only) by independent research firm iResearch.

    The remaining 6 percent where split between 1qianbao (1.4%), JD Pay (0.9%), UMPay (0.6%), 99bill (0.6%), Yeepay (0.5%), China UMS (0.3%), Sunin Pay (0.2%) and others (1.5%).

    59.8 trillion yuan ($8.4 trillion) in total digital payment representing a year-on-year increase of 13.4%

    Even in the midst of an ongoing coronavirus outbreak, the Chinese digital payment market signaled strength, the report underlined.

    Beijing-based grocery startup Meicai attracted 800,000 new users in one week on an online platform that connects farmers with consumers and restaurants. Between March 18 and 22, Alipay registered average daily purchase of nearly 1.1 million cups of milk tea via branding programs.

  • Coronavirus Sees China’s Geely Automobile Facing One Of Toughest Years

    Coronavirus Sees China’s Geely Automobile Facing One Of Toughest Years

    China’s Geely Automobile Holdings Ltd said on Monday 2020 may be one of its toughest years yet, as pressure stemming from the coronavirus outbreak on production and sales persists.

    But it said it planned to go ahead with global expansion, despite lower sales and net profit for 2019, when the country’s auto market suffered a slump, even before the novel coronavirus led to lockdowns that have paralyzed economic activity and disrupted supply chains.

    Geely Automobile, based in the eastern province of Zhejiang, is China’s most globally high-profile automaker following investments by parent company Zhejiang Geely Holding Group Co Ltd’s in European manufacturers Volvo Car and Daimler AG.

    China car sales fall 92% as coronavirus keeps buyers home

    Auto sales in China, the world’s largest market, have slumped as coronavirus fears prevent buyers at home.

    The profit announced on Monday of 8.19 billion yuan ($1.15 billion) was lower than the 9.14 billion yuan average estimate by 33 analysts on Refinitiv.

    Its shares closed at 11.28 HKD on Monday, down 4.08% from last Friday.

    “The recent outbreak of the novel coronavirus had caused serious disruption to our supply chain and thus our production levels, meaning additional pressure on our business volume and profitability in 2020,” Geely Automobile said in a filing to the Hong Kong exchange.

    Geely Automobile, which plans to roll out 6 new models under the Geely, Lynk&Co and Geometry marques this year, sold 1.36 million cars in 2019. It is maintaining a sales target of 1.41 million cars in 2020.

    The headwinds are likely to persist in the near future, making 2020 probably one of the most difficult years in the group’s 23-year history, Geely said.

    Revenue fell by 9% from the previous year to 97.40 billion yuan. Analysts had estimated 99.43 billion yuan.

    Geely Automobile’s president An Conghui told a conference call the company plans to start selling Lynk&Co in Europe at the end of this year and share more models with Malaysian automaker Proton, in which it has a stake.

    Geely Automobile and Volvo – which Geely’s parent bought from Ford Motor Co in 2010 – are planning to merge and list in Hong Kong and possibly Stockholm.

    The new company would have improved research capabilities, lower cost and brands in different segments, Geely’s chief executive Gui Shengyue said.

    That could help to position it as global automakers pursue alliances to respond better to the cost of meeting tougher emission rules, electrification and autonomous driving.

    The industry worldwide will also be seeking to revive sales as soon as there is a widespread easing of restrictions on movement to slow the spread of the coronavirus, which has killed more than 30,000 people globally.

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  • Huawei says China has recovered enough to buy new 5G flagship phones

    Huawei says China has recovered enough to buy new 5G flagship phones

    Huawei unveiled its new camera-based P40 series (P40, P40 Pro, and P40 Pro+) today and the phones will be available starting next month priced at the equivalent of $878 USD and up. Each of the three new models supports the next generation of wireless connectivity, 5G. Yu says that he thinks that this will be the first year that 5G will “take off” which is why all of the P40 handsets available have a 5G modem which is integrated into the Kirin 990 5G chipset that drives these phones.

    The new phones are still offered without Google Mobile Service (GMS) due to the manufacturers continued placement on the U.S. Commerce Department’s entity list. Due to the company’s perceived ties with the communist Chinese government, the U.S. considers Huawei to be a national security threat; last May the Trump administration placed the company on the list which bans it from accessing its U.S. supply chain. While Huawei has discovered some ways around the ban, it is not allowed to license the Google ecosystem including the latter’s version of Android and its core Android apps. That means that Huawei phones cannot run the Google Play Store, Google Search, Google Maps, Gmail, Drive, and others. Inside China, this means nothing since most Google apps are banned there anyway. But Huawei’s international sales have been hurt by the inability of Huawei’s phones to run these apps.

    With the P40 line, Huawei debuts its own ecosystem and Huawei Mobile Service. This includes the company’s AppGallery storefront and a brand new digital assistant called Celia. Google Assistant is not available on the open-source version of Android used by the manufacturer. Yu says that he hopes something can be worked out with the U.S. government that would allow his company to partner once again with Google. “We want to continue our partnership with Google,” he said, revealing that Huawei is in discussions with the company. “We hope this issue can be solved, but we’re not the government so we can’t make the decision. They’re a smart government, and I hope they can give a license.”

    The Huawei executive also commented about the second generation of the foldable Mate X that it released last month powered by a more powerful chipset with an integrated 5G modem. Yu said that the firm is not making any money on the device but demand is outstripping supply. Talking about the Mate Xs, Yu states that “With time and more production we can bring the cost down and make it more competitive.”

    Talking about today’s unveiling of the new P40 line, Ben Wood, chief of research at CCS Insight, said that although “arguably there could not be a worse time to launch a set of premium smartphones, Huawei may be in a better position than some rivals.” Wood notes that China appears to be on the mend and added that “given that Huawei has been shipping over 40 million units a quarter in China in recent times, this provides a strong foundation for the business.”

    Meanwhile, Huawei’s Yu wished the rest of the world a rapid recovery from the COVID-19 pandemic. He said, “I hope the U.K. and the world recovers soon from coronavirus. The experience from China was that the government very strictly limited the mobility of people, and quickly everything came under control. I think governments in the rest of the world are taking action like China and will quickly control it too.”

  • How China retail is emerging from the coronavirus crisis

    How China retail is emerging from the coronavirus crisis

    Savills China Retail predicts a full recovery of the country’s retail sector post coronavirus will probably happen in the second half of the year.

    In a perspective on China retail’s recovery from the crisis, the real estate company describes the blossoming rejuvenation of shopping malls, restaurants, gyms and entertainment centers whose businesses were affected by lockdowns during and after the Chinese New Year period in late January.

    It says consumers are gingerly returning to stores as China’s coronavirus outbreak eases. Shopping malls in Shanghai are reporting footfalls at 30 percent of their pre-coronavirus levels. From this week, most shopping malls have adjusted business hours back to 10 am–10 pm and most retail tenants have reopened to the public.

    Anecdotal evidence suggested that it was already difficult to find parking or seats at coffee shops at Shanghai’s IAPM mall, and queues were reported outside some fashion stores.

    While some restaurants have shut down permanently after being unable to cover labor and rent costs during the affected period, those that survived have been allowed to reopen following an application process. Popular restaurants are once again popular after the coronavirus outbreak receeded.

    Most of the gyms in China have reopened excluding Beijing, introducing maximum capacity levels – allowing 50 people in at a time (per 30,000sqft) for a 90-minute period. After that time is up, gyms perform a full half-hour sanitization process before letting the next 50 people in to work out.

    Nightclubs and KTV venues have opened as of a few days ago in Shanghai and in most cities in China except Beijing, however, consumers are remaining hesitant to go to these places. Some entertainment parks remain closed, most likely on a voluntary basis.

    A limited number of domestic Chinese brands have collapsed at this stage, but more are likely during the next couple of weeks, due to cash flow challenges.

    Savills says international brands looking to expand in the China retail market have largely put those plans on hold.

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  • JD offers a helping hand to boost bookstore sales in China

    JD offers a helping hand to boost bookstore sales in China

    E-commerce platform JD has helped boost bookstore sales in China during the coronavirus outbreak.

    Last month, sales of two children’s bookstores – Caldecott Bookstore and Zhongshang Children’s Books – increased by 221.6 percent and 282 percent respectively, year on year.

    According to JD, the increased bookstore sales in China are attributed to consumers staying home during the epidemic and turning to books for inspiration and encouragement.

    JD Logistics continued to deliver products to Chinese consumers as usual during the outbreak while implementing a series of disinfectant measures to ensure consumers received their books safely.

    The coronavirus outbreak has led to the temporary shutdown of offline bookstores, a shortage of employees due to the epidemic, a sharp drop in operating revenues, and a surge in pressure on store rents and staff spending. During the period, JD has been assisting partnering bookstores in putting out live broadcasts to drive traffic and promote brand awareness, thus boosting bookstore sales in China.

    “Supporting offline bookstores to do live broadcast is a good example of how JD.com has been using its resources to help offline bookstores to transform their businesses to better cater to the needs of Chinese consumers,” said JD’s offline book team operations manager Jiao Zhang, “especially when there is limited traffic in offline bookstores during the epidemic period”.

    According to the 2019–2020 China Offline Bookstore Industry Report, there are more than 70,000 bookstores in China. Last year, more than 4000 new bookstores opened in the territory. China currently has 135 book malls that are more than 5000sqm each, of which 35 are more than 10,000sqm in size.

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  • JD to launch worldwide new products initiative

    JD to launch worldwide new products initiative

    Chinese e-commerce platform JD plans to help 3000 new products around the world become hot sellers, nurturing more than 1000 new global brands this year.

    The details were announced during the JD Worldwide online conference for merchants, which focused on customer growth, developing third-party business and nurturing merchants in order to support the growth of more international retail in China.

    The group also anticipates helping more than 100 suppliers to achieve RMB100 million in sales this year via monthly promotions designated to push new products.

    Last year an average of more than eight new products were sold on JD Worldwide every minute. Customers displayed a greater consumption-ability during this period, and the platform has more young consumers and consumers from lower-tier cities than in previous years.

    According to the firm, JD Worldwide will focus on building a healthy ecosystem for merchants this year with a more comprehensive after-sale service system and special support for those using JD’s fulfillment services.

    During the coronavirus outbreak, JD’s international supply chain system and continuous logistics service have enabled merchants to supply their products to customers without interruption, with some merchants seeing sales increase by more than 90 percent.

    JD currently has more than 1000 international transportation routes to support overseas merchants.

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  • China will drive massive global e-commerce transaction growth by 2024

    China will drive massive global e-commerce transaction growth by 2024

    Chinese growth will drive e-commerce transaction values up 43 per cent to US$4.8 trillion by 2024, according to new reporting by Juniper Research.

    The research showed Chinese e-commerce undergoing 62 per cent value growth over the next four years, bolstering global e-commerce value along with emerging markets in Latin America, Africa and the Middle East, among others.

    The report found that improvements in connectivity will enable the rise of e-commerce in new markets, thus urging payment providers to seek fresh revenue streams in emerging regions to offset slow growth in developed markets – with a particular emphasis on the potential of mobile payments that do not require a linked bank account, as mobile handset penetration is rising faster than banking penetration in young markets.

    “The popularity of mobile wallets is having a disruptive effect,” read material released by the firm, “with physical cards becoming less important to the payments market.”

    Accordingly, the research suggests that card networks must be proactive, by looking beyond the card, becoming involved in open banking initiatives and delivering omnichannel experiences for users.

    “Card networks must leverage their ability to invest in, and forge partnerships with, key players to gain scale in new areas, or they will fail to diversify their revenue streams and will be vulnerable to future disruption,” said research author Susannah Hampton.

    Juniper’s findings are published as Strategies for Payment Providers: Industry Trends, Opportunities & Recommendations 2020-2024.

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  • Anta Sports hits sales and profit record

    Anta Sports hits sales and profit record

    Chinese sports shoe retailer Anta Sports has delivered its sixth consecutive year of sales growth, reaching a record US$4.8 billion in 2019, 40 percent up on the prior period.

    Hong Kong-listed Anta Group owns many Chinese and international sports brands, including Anta, Fila, Descente and Kolon Sport.

    Sales of the Anta brand surged 21.8 percent, and for Fila by 73.9 percent.

    Profit attributable to shareholders was a record $757 million, up 30.3 percent, marking the third consecutive year of 30-per-cent-plus growth for the company.

    Anta ended last year with 12,943 stores, 10,516 of those across Mainland China bearing the Anta or Anta Kids banners. Another 1951 Fila stores are located on the mainland and in Hong Kong, Macau, and Singapore and there are 136 Descente stores in China.

    The company said a policy of pursuing “high-quality growth, organic operation, and strong cost management” over recent years had laid a solid foundation for the group to cope with market uncertainties especially in times of challenges posed by the global Covid-19 outbreak.

    “Prior to the outbreak, brands under the group have already realized strategic plans of both online and offline development,” the company said in a statement.

    “In the early stage of the outbreak, the group has also reacted promptly to offset the blow from coronavirus – implementing strict cost management, exercising community marketing, building more flexible supply chains, maintaining on-time logistics and deliveries, and promoting e-commerce innovation are all among concrete moves that Anta Group has made.”

    The company is predicting a “low double-digit” decline in sales for the first half of the current year as a result of the coronavirus crisis impacting retail, but anticipates a return to growth in the second half given the rebounding Chinese economy.

    “Therefore, the group is confident to achieve positive annual growth by the end of 2020.

    “From a long-term perspective, the Covid-19 outbreak will not last for an indefinite period of time and consumers’ needs for health and fitness products will definitely be heightened, which will contribute to the group’s swift recovery after the crisis.”

  • Yum China reopens most stores, reports recovering footfall

    Yum China reopens most stores, reports recovering footfall

    Yum China says it is witnessing “early signs of recovery” in Mainland China as business gradually resumes and people return to work.

    However, the company, which operates KFC, Pizza Hut and Little Sheep chains, said in an update to shareholders that restaurant traffic remains “heavily impacted” as people continue to implement social-distancing measures.

    Store closures peaked in mid-February when about 35 percent of the company’s network was closed, the remainder offering only delivery and takeaway services. However, trade for those still trading significantly declined. Same-store sales for Yum China were down by between 40 percent and 50 percent year on year during the Chinese New Year holiday period.

    This week, about 95 percent of Yum China’s stores had reopened either fully or partially and about 15 percent of those continued to offer only takeaway or delivery services.

    In its update, Yum China said that while customer volumes were slowly building, they remained well down on pre-outbreak levels.

    “The pace of recovery varies by region and is slower during weekends as people avoid going out. In recent days, same-store sales were down approximately 20 percent. Sales performance fluctuates as the recovery is uneven, and the situation continues to evolve,” the company said.

    Yum China launched contactless delivery in late January, which proved popular and supported the delivery business during a period of lower dine-in traffic. “Delivery sales grew year over year, and its mix as a percentage of company sales approximately doubled.”

    Yum China also launched contactless pick-up and corporate catering services as highly sanitary options for consumers and corporate customers.

    Now that the coronavirus crisis appears to have passed its peak in Mainland China, the company is considering resuming its network expansion program. Currently paused – largely due to a shortage of construction workers and traffic restrictions – the company says it will “continue to monitor the situation and work with local authorities, resuming new store openings when conditions allow”.

    “Despite a challenging start to the year, Yum China is here for the long run, and will ensure that it remains well-positioned for the long-term growth opportunities in China.”

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  • JD to issue US$212 million in coupons to boost post-coronavirus economy

    JD to issue US$212 million in coupons to boost post-coronavirus economy

    JD is collaborating with various brands to provide RMB1.5 billion (US$212 million) in promotional coupons to stimulate sales across Mainland China.

    Starting Thursday, the Chinese e-commerce company will start sending out the coupons which cover key online retail categories such as electronics and FMCG.

    The coupons are being issued to stimulate flagging demand caused by the Covid-19 epidemic. The program aims to support brands and merchants in working towards recovering their former sales and operations levels and signals a change in tack in the coronavirus recovery period to focus on restoring economic activity.

    Since the outbreak, JD has leveraged its supply chain, logistics and technology strengths partnering with a variety of stakeholders to fight against the epidemic. The firm has also launched a series of initiatives to support brands and merchants.

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