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Tag: tmall

  • Tmall extends online coverage for midyear sales

    Tmall extends online coverage for midyear sales

    Alibaba’s Tmall says it has extended its upcoming 618 midyear sales to several markets across the Asia-Pacific.

    This year, consumers in Hong Kong, Singapore, Taiwan and Australia will be able to join customers in Mainland China in accessing “billions of products at deep discounts online and offline” during the event.

    “This year’s 618 midyear sales coincides with the Dragon Boat Festival. It is a good opportunity for overseas Chinese to buy festive products and to build the understanding and connections with Chinese culture,” says Tmall export and import GM Alvin Liu. “For some markets, shipment by sea is now a delivery option, meaning consumers can literally buy a dragon boat on Tmall and have it delivered to their doorstep.”

    Another key element this year is New Retail, combining online and offline elements. “Pop-up stores in overseas markets will allow visitors to scan product QR codes and place orders online,” says Liu.

    Hong Kong, Singapore and Taiwan customers will be offered such promotions as free shipping.

    Tmall is working with more than 70 shopping malls and commercial districts across Mainland China and Asia to open pop-up stores that will offer consumers a seamless online and offline shopping experience.

    In these stores, consumers can sample new technologies such as product recommendations based on facial scans, smart-fitting, smart fashion advisors and scan-to-access product information.

  • Alibaba shows off automated wine store in Hong Kong

    Alibaba shows off automated wine store in Hong Kong

    Alibaba’s Tmall, China’s leading B2C online marketplace, wants to give wine selection and consumption a 21st century upgrade.

    At Vinexpo Hong Kong this week, Tmall unveiled a host of new technologies for the industry, including an automatic wine store, initiatives far from the grape-stomping and oak barrels of old.

    Tmall showcased a “Future Bar,” which included facial-scanning for entry, a robot waiter, RFID technology to enhance browsing, touch-screen displays for product research and a “Smart Wine Cooler.” The technologies are part of a larger trend in “New Retail,” an initiative in China led by Alibaba to merge the best of online and offline commerce for the benefit of both consumers and merchants.

    Mike Hu, a senior director at Tmall, said the goal of New Retail is to make shopping more personal, more engaging and more convenient – even in traditionally stodgy industries such as wine.

    “China really is at the forefront of consumer engagement right now,” Hu said. “Shopping here is mobile, it’s fun, it’s interactive, and the wall between e-commerce and brick-and-mortar stores is coming down. This kind of comprehensive shopping experience is what Chinese consumers have come to expect, so wine sellers need to adapt if they want to be successful here.”

    Upon arriving at Alibaba’s booth, attendees were greeted by the Tmall Robot Waiter, who asked, “Hey, don’t you want to have a drink?” – in multiple languages. The advanced human-computer interaction offered a glimpse of the future for wine merchants and their customers, Hu said.

    Facial scanning

    Facial scanning, meanwhile, offered entry to the booth and pointed a still-growing but soon-to-be important part of the consumer experience in China: facial-recognition payments, Hu noted. Already, Alibaba’s supermarket chain, Hema, has implemented the technology in one of its Shanghai stores. It is being tested in a cashierless store at Alibaba’s Hangzhou headquarters as well.

    The RFID technology was embedded in the foil wrapping that covers the cork so that when they were picked up from a shelf, their product information was displayed on a nearby screen. So, too, were recommendations for food pairings.

    Touchscreens at the booth allowed visitors to research a wine’s home chateau and place orders through the brand’s Tmall flagship store. This kind of setup would save much-needed stock and shelf space for retailers, Hu said, while providing greater selection for consumers visiting the shop and offering delivery direct to their homes.

    Users of Tmall’s Smart Wine Cooler scanned a QR code to open the cooler door, after which they could choose their favorite bottle and then simply close the door again to pay automatically. Or, as Tmall put it, “close the door, the deal is done.”

    Ecommerce marketplaces, such as Tmall, are playing an important role in China’s wine market, said Guillaume Deglise, CEO of Vinexpo. Not least because the brick-and-mortar retail business is not on par with other markets.

    “It’s very difficult to find very good shops in China, especially in tier-two and tier-three cities,” Deglise said. “So, e-commerce is changing this.”

    Also, younger consumers in China are more used to online shopping than their peers in the US and Europe, he said, “so the distribution will be different in China than the rest of the world.”

    Asia, overall, is driving global growth in the wine market, according to a new report from Vinexpo. And China is leading that trend. The country was the world’s third-largest importer in 2017 by value, at $16.41 billion, behind only the US and UK By 2021, however, China will overtake the UK in the number-two spot with $22.97 billion – a near 40 per cent jump.

    Deglise points to the middle class for these increases, especially those in urban centers, such as Beijing and Shanghai. An uptake among women is also playing a role, as is a general trend toward wellness in China that has people reaching for vino instead of the country’s traditional “baijiu” hard liquor.

    Then, there’s travel to markets where wine is already popular, such as the US, Europe and Australia, which gives Chinese consumers the chance to try new varieties.

    “When they come back home they tend to drink more wine than before,” Deglise said.

    This means that wine-producing countries will benefit, he added. Vinexpo expects almost all producing countries to increase their exports to China over the next five years, making China the only market to prompt such demand.

    “All producing markets are depending on China,” Deglise said. “It’s a huge market with tremendous potential.”

    Alibaba signed two memoranda of understanding at Vinexpo on Wednesday, with governmental organisation Wine Australia and French wine critics Bettane & Desseauve. Tmall will work to market Australian wines on the platform and support Wine Australia’s marketing efforts around major events such as the 11.11 Global Shopping Festival. For Bettane & Desseauve, Tmall will use their reviews to complement its wine listings while also hosting their annual top wine lists as they are released. They will also partner on offline wine events in China.

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  • Tmall and Intersport launch interactive megastore in Beijing

    Tmall and Intersport launch interactive megastore in Beijing

    Tmall and Intersport unveiled a co-branded store in Beijing yesterday, complete with interactive features that offer consumers in China a more engaging and informative shopping experience.

    Under the new name “Tmall x Intersport,” the two-story, 1300sqm space that sits in Beijing’s tourist hotspot Qianmen has been transformed into a futuristic megastore. The revamp underscores that more global brands are recognising the power of New Retail—tech-driven retail model pioneered by Alibaba that captures the best of online and offline shopping experiences.

    “We believe Tmall is the ideal partner in our endeavour to further our engagement with Chinese consumers by providing them the best-quality and most-fashionable sports goods in the market,” said Victor Duran, CEO of the Switzerland-based sportsgoods retailer Intersport.

    Established in 1968, Intersport has more than 5000 branches in 44 countries. It sells sports brands such as Nike, Puma, Reebok, Adidas, North Face and Dynatour. Intersport made its foray into China in 2013 and opened its Tmall flagship store in September 2016.

    “These new in-store technologies provide consumers in China an unprecedented shopping experience that is both entertaining and educational so they can have fun while shopping for the exact products that meet their unique demand,” the CEO said.

    Currently, Intersport has 24 stores in China with the goal of expanding to at least 100 – a combination of larger flagship stores in major cities and smaller specialty stores – during the next couple of years. “It makes sense to have Tmall technologies to be the link to connect all the stores together,” Duran said.

    New Retail is the new solution

    Many industry watchers have pointed to New Retail as the solution for brick-and-mortar retailers feeling the squeeze from e-commerce. By harnessing engaging technologies, store owners can attract more customers through both online and offline channels. Moreover, these technologies can generate insights to help businesses gain a more-precise view of China’s market trends and customer preferences.

    “We are excited to see an extensive range of Tmall’s New Retail technologies and features under one roof in Intersport’s store,” said Jessica Liu, president of Tmall Fashion and Luxury. “What’s even more encouraging is to see our merchants embracing the New Retail concept and exploring its potential. When customers try out these features firsthand, we are confident that they will see the convergence of online and offline shopping as the future of retail.”

    The Tmall and Intersport store is the latest example of how Alibaba’s New Retail technology is helping brands build up and reimagine their business in China since the push began in late 2015. To date, Tmall Fashion has collaborated with over 400 brands, including top names such as Burberry and Zara, and upgraded more than 50,000 storefronts all over China. Liu said the goal is to increase the collaboration to 1000 brands and help digitise 200,000 storefronts nationwide in the next year.

    Educate your customers

    At the grand reopening yesterday, customers were welcomed by an array of state-of-the-art technologies and augmented reality-powered interactive games. For example, the Smart Shelf and the Smart Shoe Mirror can instantly tell customers all the information they need about a certain shoe they pull from the shelf. This way, the customer can make a more-informed decision on whether or not the products fit their individual demands.

    Education on how a product suits an individual’s needs is an especially crucial element in the sportswear and gear market in China, said Tom Birtwhistle, director of China digital strategy at PricewaterhouseCoopers.

    With a government-led mandate to become more physically fit, and as China gears up to host the 2020 Summer Olympic and the 2022 Asia Games, Chinese customers are becoming more interested in adopting an active lifestyle, he added.

    “Chinese consumers are massively curious in learning about new brands and products. For new sports they want to be educated on the activity and understand how technical features can enhance their performance,” said Birtwhistle.

    His research indicates growth in the athletic fashion category is outpacing China’s overall fashion market. The segment is forecast to see 9 per cent growth annually in sales between 2017 to 2020, versus just 4 per cent for men’s and women’s fashion.

    At the smart megastore, shoppers can also get wardrobe tips from an AI Shopping Assistant – an interactive mirror that recommends related accessories or items that complement the article of clothing they are trying on.

    Can’t find what you want in the store? No problem. The megastore is equipped with Cloud Shelf technology, a virtual shelf that quadruples the volume and production selection customers can choose by simply tapping on the touchscreens, according to Tmall.

    A 24-hour interactive window display at the store’s main entrance means people can shop at the megastore around the clock. By using motion-sensor technology, the giant screen wall can distinguish the gender and approximate age of the passersby and recommend the best type of shoes for that person.

    Those who don’t want to lug heavy shopping bags or bulky shoe boxes around the streets of Beijing can opt to have their purchases delivered to a designated address anywhere in the country. Cainiao, Alibaba’s logistics service, can make the delivery in as quickly as two hours for locations within 5km of the store. Next-day delivery is also available for locations outside of Beijing.

    By scanning the QR code of a product on their phones, customers of the Tmall and Intersport store can also place the products in their Virtual Shopping Bag, so they can still buy the item online after they leave the store.

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  • Alibaba backs virtual showroom startup Ordre

    Alibaba backs virtual showroom startup Ordre

    Alibaba Group has bought a minority stake in Ordre, a European online luxury wholesale platform.

    Ordre, launched in 2015, allows fashion designers to show off their collections via 360-degree photography and virtual reality to interested wholesale buyers. The technologies make it more convenient for buyers, who aren’t always able to travel due to time and distance constraints, to build inventory each season. The reduced travel translates into lower carbon emissions at a time when sustainability is increasingly important to the industry, said Ordre.

    Dianne Von Furstenberg, Vivienne Westwood and Jason Wu are among the world’s leading designers who have established digital showrooms on Ordre. They also work with fashion brands such as Joseph.

    For Alibaba, the investment is a further push into the luxury sector, which is among its top strategic priorities, given the rising spending power and increasingly sophisticated tastes of Chinese consumers. The Hangzhou, China-based company plans to leverage Ordre’s technologies for consumers, however, delivering a more-enhanced shopping experience on platforms such as B2C marketplace Tmall.

    “Matching Ordre’s technology with Alibaba’s unique data insights and capabilities – of which our recently launched Luxury Pavillion is a great illustration—we can provide our consumers with a personalised and differentiated experience, helping brands develop a deeper engagement with them,” said Jessica Liu, president of Tmall Fashion and Luxury.

    The Luxury Pavillion, which lives within Tmall, was launched last August to deliver to China’s high-end consumers the same kind of brand exclusivity and tailored shopping experience online that they would expect at a brick-and-mortar store. About 50 brands, including l, offer products ranging from apparel and cosmetics to watches and luxury cars.

    The pavillion is driven by Alibaba’s New Retail technologies, which blend online and offline commerce to deliver a better buying experience for consumers. Simon Lock, founder and CEO of Ordre, said the company’s digital assets, including 360-degree images, 360 video and VR fashion shows and designer interviews, are in line with this strategy and could serve Tmall shoppers and brands.

    “Our 360-view allows consumers to understand every aspect and every view of a garment,” he said. “When you’re purchasing online, as much detail as can be provided is going to make your purchasing decision much more confident,” which can help drive down the product return rates.

    The companies are currently discussing a number of potential initiatives that would expand on these technologies. One of which would create new direct-to-consumer channels for Ordre’s partner brands by leveraging content to communicate their brand story and provide more information about products. For example, Ordre’s VR technology was able to recreate Stella McCartney’s Coachella-inspired 2018 fall show and the theatrical experience of Thom Browne’s latest showcase in Paris, so that buyers could watch fashion shows from the front row.

    Other potential collaborations include “fit avatars,” which allow buyers to see collections on models in 360-view and technology that allows buyers to remotely feel fabrics on a touch pad.

    Lock said he was also interested in Alibaba’s “See Now, Buy Now” technology, as well as the company’s artificial intelligence and cloud-computing capabilities.

    “We can work together to create the ultimate global fashion cloud,” he said.

  • Tmall Luxury Pavilion launches loyalty program

    Tmall Luxury Pavilion launches loyalty program

    The Tmall Luxury Pavilion has launched a New Retail-driven loyalty program allowing brands to create a personalised and seamless online-to-offline experience for customers.

    Launched in August, the Pavilion aims to deliver the same brand exclusivity and tailored shopping experience online for China’s high-end consumers they would expect at a brick-and-mortar store. Through the new Luxury Pavilion Club, customers will also have access to exclusive offers, celebrity events, flexible payment options, priority purchases and door-to-door returns.

    “This is the latest move from Alibaba to bring the online shopping experience to a new level with a premium touch,” Tmall fashion and luxury president Jessica Liu said at a launch ceremony in Shanghai.

    With nearly 50 brands, including Burberry, Givenchy, Hugo Boss, La Mer, Maserati, LVMH-owned Guerlain and Zenith, the Pavilion offers products ranging from apparel and beauty products to watches and luxury cars. According to Tmall’s latest figures, more than 100,000 shoppers on the Pavilion each spend more than RMB1 million (US$159,000) a year.

    All shoppers on the invitation-only Luxury Pavilion automatically become members of the new club. A premier option offers the most-exclusive offerings from the Pavilion as well as offline services, such as spa sessions at the Four Seasons in Shanghai courtesy of Guerlain or a personal shopping concierge.

    Nearly half of the luxury consumers on Alibaba’s e-commerce platforms were born after 1990 and account for more than 45 per cent of luxury purchases on the sites, says Tmall. A third of the shoppers on the Luxury Pavilion are in the same age group. Over the next three years, Tmall will focus on connecting luxury brands to this younger demographic and their rising buying power.

    “We want to better serve the 100 million consumers that form the ‘new middle class’ and help them move closer to the lifestyle of their dreams,” Tmall president Jet Jing said.

    One way Tmall plans to make those connections is through Alibaba’s digital-marketing capabilities. Its Uni Marketing platform uses analytics and insights from more than 500 million users to help brands find and engage with potential customers.

    Alibaba Group chief marketing officer Chris Tung said that 28 of the brands on the Pavilion had signed on to use the platform, through which they had reached an average of 6.5 million consumers. One brand reached 30 million users during one of its campaigns by using Uni Marketing.

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  • Miranda Kerr launches organic beauty brand KORA on Tmall

    Miranda Kerr launches organic beauty brand KORA on Tmall

    As China’s desire for organic, healthy products gains momentum, international beauty brands are seeking to take advantage of a new approach to well-being.

    Last week, founder and supermodel Miranda Kerr launched Australian luxury skincare brand KORA Organics’ first Tmall store in China via live-stream from her Hollywood home. The event attracted more than 223,000 live viewers, with KORA Organics offering exclusive giveaways for spectators.

    “From my experience over the years, I have come to believe in and appreciate a holistic approach to overall wellness, and the connection of the mind, body and skin,” Kerr says.

    This kind of health-focused lifestyle philosophy is soaring in popularity among Chinese consumers, with last weekend’s Tmall Beauty Summit reporting that premium health and fitness products are more popular than ever with young Chinese women.

    “The appetite for natural and organic products in China continues to grow, and skincare is no exception” says Maggie Zhou, managing director of Alibaba Group Australia and New Zealand.

    With a growing awareness of health and well-being in China, Tmall Global is hoping to capitalise on luxury international brands seeking to enter the market. Tmall Global helps international brands like KORA Organics sell directly to Chinese consumers. For more than 80 per cent of brands on the site, these virtual flagship stores were their first foray into the Chinese market.

    “KORA Organics is a proudly-owned Australian brand whose certified organic and natural products speak directly to the growing demand from many Chinese consumers for clean and green Australian products” Zhou says.

    Korean beauty brand Innisfree has long been popular with Chinese consumers, marketing its innovative all natural, organic products from Jeju island. K-Beauty has struggled in China over the past year, with consumers turning to Japanese beauty when searching for high-quality products. However, according to L2’s Digital IQ Index: Beauty China 2018, Innisfree still ranked seventh among Chinese consumers, in large part due to the social media marketing of the brand’s all natural cosmetics and ‘green philosophy’.

    In line with this trend, KORA Organics is promoting certified organic and natural products, formulated with herbal extracts, essential oils, and vitamins. KORA’s products are certified by the international body COSMOS-standard AISBL/Ecocert, which guarantees the absence of toxins, synthetic pesticides or chemicals. In Australia and the United States, KORA Organics is stocked in more than 200 Sephora stores, and by the end of 2018, the brand hopes to be in place in over 2,500 stores across 25 countries.

    For now, KORA Organics will be entering China exclusively through Tmall, hoping to reach a growing base of Chinese consumers seeking healthy and organic skincare products before everyone else does.

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  • H&M opened on Tmall

    H&M opened on Tmall

    H&M China launched on Chinese e-commerce platform Tmall, complementing the Swedish clothing retailer’s 400-plus physical stores and HM.com Shop Online.

    “We are very happy to extend our collaboration with Alibaba by launching H&M and H&M Home on Tmall,” says H&M Greater China country manager Magnus Olsson.

    H&M opened its first store in Mainland China in 2007 and launched its online shop in 2014. The H&M group brand Monki has had strong development in China since its launch on Tmall, and this collaboration between the two groups, touted in December, is being extended to include both the H&M brand and H&M Home.

    During the launch period, H&M’s Tmall shop is offering more than 10,000 styles of fashion items including women’s, men’s, teens’ and children’s styles, plus H&M Home. As well as special opening offers, Tmall and H&M is offering exclusive pieces featured by TF Boys singer Wang Yuan, one of the stars in a H&M/Tmall campaign film.

    “With H&M’s experience in online and offline fashion retail, this collaboration signifies an important milestone for Tmall’s expansion, allowing more customers to enjoy the pleasure of interactive shopping,” says Alibaba VP for Tmall fashion and luxury Lv Jianmei.

    Procurement centres

    Meanwhile, Tmall Global plans to open six procurement centres across the world to help overseas vendors capture Chinese consumers’ booming appetite for newer and better imported goods, says Tmall president Jet Jing. They will be established in Japan, South Korea and Hong Kong, as well as regions of North America, Europe and Oceania.

    Jing’s announcement, at the annual Tmall Global 2018 Global Partners Summit in Hangzhou, did not disclose a time frame.

    Launched in 2014, Tmall Global is Tmall’s channel for cross-border e-commerce. The platform controls nearly a quarter of the market. With Alibaba’s expansive consumer analytics, Tmall Global provides overseas vendors insights into Chinese consumers’ shopping behaviour and preferences.

    China is the world’s second-largest consumer market following the US, according to Boston Consulting Group. The research consultancy notes China will see nearly $2 trillion in new consumption by 2021, and also projects China’s e-commerce cross-border trade to more than double to RMB620 billion (US$98 billion) in gross merchandise volume by next year from RMB305.5 billion in 2016.

    Global commitment

    Tmall Global, which already offers more than 18,000 brands from 74 countries and regions, is committed to attract even more international brands and vendors to sell their goods into China in the coming year, says Tmall Global GM Alvin Liu.

    New Retail, which harnesses new technologies to unify online and offline shopping, will serve as an important driver to power such growth by allowing vendors to engage with their customers in both spheres, Liu says.

    “Our goal is to give Chinese consumers the best shopping experience, so we select only the best quality for China,” says Liu.“We must discover new categories and find new products so Chinese consumers can find items that are best suited to their needs.”

    To achieve these goals, Tmall Global has pledged to boost the traceability of items sold on the platform. By using blockchain technology, consumers will be able to track their orders throughout every stage of the delivery process, starting from the factory at the country of origin.

    Secondly, the platform seeks to expedite the expansion of overseas fulfillment centres so smaller foreign brands can introduce their products to the Chinese market more quickly.

    The platform will also increase the use of bonded warehouses, where imported goods can be stored securely without import duties until the items are sent.

  • Shift to New Retail ‘imperative’

    Shift to New Retail ‘imperative’

    A shift by brands to a New Retail model is imperative to remain relevant and competitive in China, according to a joint report from AliResearch and Bain & Co.

    The report, the most complete to date, offers a look at the blueprint for how companies and brands can seamlessly meld their online and offline channels, providing a better customer experience and making their own operations more efficient.

    It notes the challenge laid out by Alibaba Group CEO Daniel Zhang in a letter to investors, whereby companies need to tap big data analytics to redefine the core of retail – consumers, merchandise and stores – as well as the ties among them, to upgrade formats and create new retail occasions. And it cites a list of brands, including Mondelez, Friso, Estee Lauder and Bestseller, as “leading the charge to shape tomorrow’s retailing.”

    A fundamental change in thinking by companies and brands needs to happen with respect to the customer, viewing them “in the role of co-producers,” the report said. More than just identifying target consumers and their needs, more-comprehensive and dynamic profiles allow brands to find “ways to stimulate consumer needs, identifying look-alike consumers and turning consumers into brand ambassadors who effectively co-create the brand.”

    At the same time, products morph from mere commodities to becoming part of the consumption process and consumer experience. In the world of New Retail, products and delivery are inspired by consumer data and they’re highly personalized. Moreover, with a fully integrated, omnichannel experience, it’s no longer about simply spending time in an online or offline store. It’s about consumers shopping while enjoying content or spending time on social networks, the report said.

    “The best brands are determining how to integrate products with the overall experience of not only shopping, but learning about a product, using it and recommending it,” the report said.

    In all, the report highlights six steps “winning brands” are taking “to reshape the future and make the most of New Retail.” They are:

    • Identifying new governance principals for a customer-centric model
    • Developing new flexibility and efficiency in R&D and supply chains
    • Reimagining marketing and consumer management
    • Modernising route-to-market and retail formats
    • Transforming the organisation and operating model for digital
    • Investing in new technology development.

    The 24-page report covers each step in detail and offers case studies of the above-mentioned and other brands in their quest to reimagine and redefine their business through New Retail.

    While the report’s focus is on China, it telescopes outward and concludes that the changes Jack Ma predicted when he coined the “New Retail” term in 2016 “are arriving so swiftly and dramatically that each month seems to bring with it a big, new preview of what retailing will look like everywhere, as China sets a pace for the rest of the world.”

    New Retail in China has already taken hold in numerous sectors, transforming small, disparate shops and businesses into “order-and-delivery stations for e-commerce.” Food-delivery platform Meituan, for example, fulfills more than 18 million orders a day. And China is well ahead of other countries, such as the US, with 60 times more mobile payments.

    “Wherever retailing is headed, China is already there,” the report said. “For brands hoping to sell in China, survival means moving equally fast to capture this future ahead of competitors, both incumbents and digitally savvy upstarts. It will not be enough merely to keep up. Brands will be required to get ahead and help shape the vast changes, even as they completely overhaul the rules of engagement.”

    That means adopting a big-data-based approach to business, along with a new type of customer-centric experience that involves much-higher levels of engagement and personalisation than ever before. Businesses, themselves, need to erase any existing cross-unit barriers, investing in the technology and process redesign to make that happen, as well as changing their mindset.

    The results for brands that get it right are both clear and gratifying. Citing a case study from Mondelez, the report delves into what happened when the cookie company focused on customisation for Tmall’s Super Brand Day 2017. Its goal was to make Oreos more popular among teenagers.

    To do so, Mondelez partnered with third-party vendors and Tmall to create, launch and market a music box that played tunes when an Oreo cookie was placed on a turntable-like device. Taking a bite of the cookie and putting it back on the turntable changed the tune. Consumers could record their own voices on the music box and decorate it, customising it by scanning a QR code. Relying on a flexible supply chain, Mondelez brought the music box to market in just seven days, rather than a more-traditional two to three months.

    “It has been a New Retail success story,” the report said. “The singing biscuits generated 80 times more sales on Mondelez’s site than normal, with 90 per cent of the purchases made by new consumers.”

    Brands need to act now to adapt to a New Retail reality, though the changes they make to their operating models and the introduction of new capabilities won’t necessarily bear fruit right away.

    “New Retail is a work in progress that will require brands to constantly refine and reinvent themselves for new occasions, new formats and the steady flow of new ideas that will define retailing tomorrow,” the report concluded.

    You can read the full AliResearch/Bain report here.

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  • Tmall taps 10 beauty brands for omnichannel growth

    Tmall taps 10 beauty brands for omnichannel growth

    Tmall will this year work with top beauty brands such as Estee Lauder and Lancome to help them surpass RMB 1 billion (US$157.9 million) in annual sales on the platform.

    The increased focus on the beauty sector will also see Tmall deliver an updated suite of New Retail solutions so that all merchants can better serve Chinese consumers, the Alibaba Group-owned B2C shopping site says.

    Tmall plans to partner closely with about 10 beauty brands in particular, also including SK-II and Olay, to help them break that sales threshold. New Retail initiatives include a new “try-before-you-buy” feature, where users pay a 10 per cent deposit to test a product with the promise of a simpler and faster refund process.

    “Our partnership with brands will cover every corner from online to offline,” Tmall president Jet Jing said. “We will be consistently involved in daily operations ranging from product innovation, brand building, channel management, supply chain to customer operations.”

    Tmall Supermarket would also expand its one-hour delivery service to more customers, as faster service is also a part of New Retail, Jing said. However, the biggest changes won’t come until the 11.11 Global Shopping Festival, which is typically when Alibaba rolls out its New Retail initiatives.

    The initiatives were announced during the Tmall Beauty Awards in Shanghai, where more than 1000 beauty professionals, from both international and home-grown brands, gathered for the annual event. This year, Estee Lauder, SK-II, Giorgio Armani Beauty and Givenchy each took away a “Super Brands Award,” for their outstanding performance in brand influence, marketing creativity and consumer engagement. Newcomer Givenchy on March 1 broke the single-day sales record, selling more than 58,000 lipsticks and generating over RMB 16 million – all in the first 12 hours of the day.

    Since launching in 2015, the awards largely have spotlighted New Retail-driven innovations. Featured technology at this year’s awards included the “Cloud Shelf” and the latest iteration of the augmented reality-powered “Magic Mirror,” which allows users to virtually try on new hairstyles, lipstick, eyeshadow and blush. Tmall said it would partner with with French cosmetics company L’Oreal to install Magic Mirrors in 50 of the beauty giant’s physical stores in China.

    Tmall hosts more than 3000 beauty brands on its platform, according to a report released by Tmall and Chinese research firm CBNData last year. Some of the newest entrants include LVMH-owned Givenchy, L’Oreal’s Giorgio Armani Beauty and Estee Lauder’s Darphin.

    “After two years of very successful acceleration in China, we felt this is the right timing to join Tmall to push artistry and premium-ness of the brand,” said Andrea Yann, GM of the China market at Giorgio Armani Beauty. “Our plan is really to understand from [Alibaba’s] database what are the main beauty concerns of Chinese women to solve their beauty issues, be very personalised still being [seen as] very artistry and premium.”

    Andrea Yann, GM of the China market at Giorgio Armani Beauty, speaks on stage.

    Younger more focused on beauty

    According to a report released by Tmall and market research consultancy Kantar, what they want is a more elaborate skincare regimen. Thirty-five per cent of respondents said they have added more steps to their beauty routines, and therefore are spending more on skincare products and cosmetics. Tmall attributed 53 per cent of the sales of beauty products on Tmall to consumers making more purchases per person.

    Beauty consumers in China – the world’s largest and fastest-growing beauty market at $22 billion – are also becoming younger than ever, the report noted. In 2017, users born after 1990 made up over 40 per cent of shoppers on Tmall Global, the site’s cross-border e-commerce channel, overtaking those born in the 1980s as the main consumption force on Tmall Global, the site’s cross-border e-commerce channel.

    Consumers born after 1990 like to try new products from new brands and less familiar origin countries, the report said.

    Embracing the new

    “In China, there’s more willingness to try new products at a faster rate than what you would see in different markets,” said Danielle Bailey, head of Asia Pacific research at digital agency L2.

    “It’s not that [Chinese beauty consumers] are less loyal, but their desire to explore is much higher,” she said. “This makes it more challenging for brands to sell to the market, but also creates new opportunities.”

    Tmall’s latest report also showed momentum for homegrown brands, particularly for skincare, where they accounted for 56 per cent of sales last year – up from 54 per cent in 2016. However, foreign brands still dominate the cosmetics category with 56 per cent of total makeup sales.

    Chinese brands are trying to boost their profiles by launching new prestige product lines or creating new products within an existing line, said Bailey. “It will be interesting to see if local brands can successfully transition to that space. It’s still a bit unclear because Western brands tend to be associated with better quality,” she added.

    From a product development standpoint, the pace of innovation in Asia has forced brands in the West to shrink development timelines to stay relevant, said Bailey. Where Western companies may take two years to release a product,” he said, “in Korea, some brands are launching new product every three months.”

    Time-to-market is indeed very important for beauty brands, said Ye Guohui, GM of Tmall’s new retail division.

    “Conducting market research alone can be very time-consuming, taking up to over a year,” he said. “But brands in China can leverage Alibaba’s data capacities to really shorten that timeline, and accelerate product development.”

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  • Renault partners with Chinese online retail giant

    Renault partners with Chinese online retail giant

    China, a strategic market for Groupe Renault, is the top priority in the company’s new mid-term plan, “Drive the Future.” The Chinese joint venture, Dongfeng Renault Automotive Company, has set a target of 400,000 passenger cars sales by 2022 based on nine local models.

    “One of the key objectives of returning to Formula 1 was to leverage its global platform for Groupe Renault,” said Cyril Abiteboul. “China has been identified as a market of strategic importance and partnering with high-profile companies like Alibaba’s Tmall will provide opportunities to significantly improve Renault brand awareness and opinion in China, with a strong presence over the Chinese Grand Prix in April, but also throughout the year.”

    “We are excited to partner with the Renault Sport Formula One Team to make our activity around the Chinese Grand Prix a success and to be working closely together to bring one-of-a-kind experiences with the Renault Sport Formula One Team to our customers,” added Wei Yu, General Manager of Tmall Auto.”

    Alibaba Group’s mission is to make it easy to do business anywhere. The company aims to build the future infrastructure of commerce. It envisions that its customers will meet, work and live at Alibaba, and that it will be a company that lasts at least 102 years.

    Launched in 2008, Tmall caters to consumers looking for branded products and a premium shopping experience. A large number of international and Chinese brands and retailers have established storefronts on Tmall. According to iResearch, Tmall was China’s largest third-party platform for brands and retailers in terms of gross merchandise value in 2016. Tmall is a business of Alibaba Group.

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  • Alibaba Revamping Ladies’ Rooms To Make Waiting More Fun

    Alibaba Revamping Ladies’ Rooms To Make Waiting More Fun

    Alibaba’s Tmall and shopping centre operator Intime have partnered to create a New Retail-driven model for restrooms.

    Last week, the two unveiled the first “Smart Ladies’ Room” at the West Lake Intime Shopping Mall in Hangzhou City. It’s the latest extension of New Retail by Tmall and Intime, after they last month showed off a smart nursing room for mothers shopping at malls.

    Consumers waiting in line can make use of technologies like a pair of ‘magic mirrors’, an augmented-reality-powered digital screen that lets shoppers virtually try on and purchase cosmetics, including a wide array of lipstick, blush, eyeliners and eyeshadow, and a vending machine offering beauty and feminine products from nearly 10 brands, including Shu Uemera, Lancome, Elizabeth Arden and Benefit, to lighten the load for ladies out shopping. All products can be purchased for RMB 0.01 each through the Alipay mobile wallet.

    The Smart Ladies’ Room at West Lake Intime Shopping Mall is already open to the public, while one at Hangzhou’s Wulin Intime is under construction. The company said its next steps involves reworking more restrooms at tourism sites, shopping malls and hotels.

    Alibaba’s plans to expand the model to more public restrooms coincides with China’s continued push for a “toilet revolution,” a national drive to improve sanitation and build more clean restrooms across the country.

    China intends to build or renovate 64,000 toilets at tourist sites between 2018 and 2020, by the end of which the country aims to raise tourism revenue to RMB 7 trillion – up from RMB 3.9 trillion in 2016, according to the Xinhua News Agency.

    Relate

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  • Alibaba to thank New Retail for Its record sales

    Alibaba to thank New Retail for Its record sales

    Continuing momentum in Alibaba Group’s New Retail business helped drive a 56 per cent year-on-year growth in sales for the quarter to December 31.

    The performance of the New Retail category – which combines its online (non-marketplace) and fast-growing offline retail businesses, including investments in Sun Art Retail and other established businesses – was a core highlight of the quarter, according to CEO Daniel Zhang.

    “Alibaba had another great quarter driven by the continued strength of the Chinese consumer and the wide and innovative range of services we provide for merchants and consumers,” he said.

    “We are excited by the continued momentum in New Retail, which came to life during another record-breaking 11.11 Global Shopping Festival. We expanded the scale and footprint of our New Retail initiatives with the vision of delivering true convergence of the online and offline consumer experience through mobile and enterprise technology.”

    Maggie Wu, CFO, said the group’s core business generated significant free cash flow of US$7.1 billion during the quarter, “enabling us to invest in New Retail, cloud computing, digital entertainment and globalisation”.

    Revenue from core online commerce (marketplace) activities rose 57 per cent to US$11.257 billion and from cloud computing by 104 per cent to $553 million. Digital media and entertainment sales rose 33 per cent to $832 million.

    The number of annual active consumers on Alibaba Group’s China retail marketplaces reached 515 million, an increase of 27 million from the year to September 30.

    Net income was $3.586 billion with operating margin was 31 per cent and adjusted EBITA margin for the core e-commerce business 53 per cent.

    Group highlights

    Alibaba summarised group highlights in its earnings statement, including:

    Taobao: Artificial Intelligence (AI) drove user engagement, with the Taobao app’s intelligent personal recommendations and innovative content formats continuing to drive strong growth in user engagement, conversion and annual active consumers. “We continue to invest in machine learning technologies which we apply to use cases that match consumer intent and product selection to deliver the best consumer experience.”

    Tmall: Tmall recorded 43 per cent year-on-year growth in physical goods GMV during the quarter, reflecting robust growth across all major categories including apparel and accessories, consumer electronics (mobile phones) and FMCG. “Tmall continues to be the platform of choice for the world’s top brands, with Givenchy, Giorgio Armani Beauty and Volvo establishing Tmall flagship stores and Longines, Hennessy, Dom Perignon and Baccarat joining our Luxury Pavilion in this quarter.”

    11.11: Last year’s annual November 11 Global Shopping Festival exceeded the previous year’s records, with GMV settled through Alipay on Alibaba’s marketplaces up 39 per cent year-on-year to $25.9 billion. “The continuous success of this record-breaking event is enabled by our resilient and scalable technology, as well as payments and logistics infrastructure that is capable of operating at massive scale.”

    New Retail: Rapid expansion through partnerships and innovative technologies included the opening of five new Hema fresh grocery stores in Shanghai, Beijing, Ningbo and Suzhou, taking the network to 25 at year end. “Hema exemplifies the convergence of online and offline retail by leveraging our in-store proprietary technology, digitised supply chain system, consumer insights and mobile ecosystem to provide a seamless experience for consumers.”

    In November, Alibaba formed a strategic alliance with Sun Art Group, the leading hypermarket and supermarket chain by revenue in China with over 440 stores nationwide. “Through this partnership, we aim to equip traditional retailers with our proprietary technology and know-how in online offline convergence to implement their digital transformation. In addition, the partnership with Sun Art will also enable us to accelerate the expansion of our New Retail offerings with national scale.

    International:  Alibaba’s cross-border and international retail businesses continue to show strong growth. Revenue from international commerce retail business reached $727 million in the, representing 93 per cent year-on-year growth, driven by its Southeast Asian platform Lazada and its global retail marketplace AliExpress. “While the markets for Southeast Asia and cross-border commerce remain very competitive, they are in the early innings of the game. We are optimistic about the long-term secular growth prospects of our international markets and will therefore continue to make significant investments for market share growth and focusing on the best customer experience.”

    Cainiao Network: Alibaba’s logistics division, Cainiao Network, processed 812 million orders during the 11.11 event. Cainiao Network operates an electronic shipping label system that standardises shipping data into structured formats, which enables efficient pick-and-pack operations for merchants and sorting and routing operations for delivery partners. “The advantages of this system have resulted in broad adoption by merchants and logistics service providers, both on and off our platforms, putting us in position to serve the growing consumption economy in China and roll out our New Retail strategy.”

    Cloud Computing:  Cloud computing revenue grew 104 per cent year-over-year to $553 million, driven by both robust growth in paying customers and revenue mix toward higher value-add product.  “In the December quarter, Alibaba Cloud launched 396 new products and features and continued to introduce proprietary AI technologies to tackle real-world challenges, such as traffic planning and optimising efficiency in manufacturing and airport operations. Alibaba Cloud continues to expand its customer base across a variety of industries.”

    Alibaba Cloud customers include Watsons China, carmaker Geely, and Beijing Capital International Airport.

    Digital Media and Entertainment: During the quarter, Youku video’s daily average subscribers more than doubled year-on-year, driven by several original drama series and shows that became popular hits with users.

    AI and innovation: Alibaba says its AI-powered voice assistant, Tmall Genie, surpassed 1 million unit sales since its official launch in July and the end of the year. “Tmall Genie is supported by a growing collection of sales and services and is an effective vehicle for offering a comprehensive set of every-day living applications within the Alibaba ecosystem,” the company said.

    In January, Alibaba’s Institute of Data Science Technologies (iDST), its AI research arm, developed a deep-learning neural network for natural language processing that scored higher than humans on a Stanford reading-comprehension test, the first time a machine has outperformed humans on such a test. “This development underscores Alibaba’s commitment to technology research which we believe builds the foundation for our growth in the long run.”

    Ant Financial: Alibaba Group agreed to take a 33 per cent equity stake in Ant Financial that will strengthen its strategic relationship pursuant to the series of agreements reached with Ant Financial in 2014. “We believe deepening our relationship through an equity stake in Ant Financial will bring key strategic benefits to us, including advancing our New Retail strategy with mobile payments, increasing user acquisition and retention through collaboration with the Alipay digital wallet (Alipay Wallet), and enhancing the execution of our international expansion.”

    The number of Alipay Wallet’s daily active users more than doubled during the quarter on a year-on-year basis.

  • H&M hoping to recover profits from its Tmall launching

    H&M hoping to recover profits from its Tmall launching

    Stung by a profit slump, the H&M group is pinning its hopes on China by launching a store on Alibaba’s Tmall next month.

    As well, the Swedish fast-fashion retailer is targeting India, Saudi Arabia and the UAE with new digital stores this year.

    Releasing its full-year report yesterday, H&M admits it has been struggling to keep pace with evolving shopping habits that have depressed sales in its physical stores.

    Sales grew 4 per cent last year but profit after taxes slumped 13 per cent, with CEO Karl-Johan Persson saying the fashion industry is “changing fast”.

    “At the heart of the transformation is digitalisation, and it is driving the need to transform and rethink faster and faster,” he says.

    With physical stores in 69 markets, H&M has an online presence in 43.

    Full-year global sales (to November 30) including VAT increased by 4 per cent to SEK231 billion (US$29 billion). This was a 3 per cent rise in local currencies. Sales excluding VAT reached SEK200 billion.

    Gross profit increased to SEK108 billion, corresponding to a gross margin of 54 per cent, down from 55.2 per cent the previous year.

    Profit after financial items amounted to SEK20.8 billion, down from SEK24 billion. The group’s profit after tax amounted to SEK16 billion, down from SEK18.6 billion.

    Final-quarter fall

    For the fourth quarter, H&M group sales including VAT were down 4 per cent to SEK58.4 billion (2 per cent in local currencies). Sales excluding VAT fell from SEK52.7 billion to SEK50.4 billion.

    Gross profit fell to SEK27.9 billion from SEK30 billion, corresponding to a gross margin of 55.4 per cent (57 per cent). Profit after financial items amounted to SEK4.8 billion, down from SEK7.4 billion.

    Profit after tax was SEK3.9 billion, down from SEK5.9 billion.

    Weak store sales led to increased markdowns and handling costs, impacting the quarter’s results.

    During the year H&M opened 479 stores (497 the previous year) and closed 91 (70), resulting in a net addition of 388 outlets. Eight online markets were launched and the brand entered five new markets. It ended the year with 69 sales markets, 43 of them including an online presence.

    This year the group plans to add about 390 stores to its network and close about 170, a net addition of about 220 stores. On Tmall it will have both H&M and H&M Home.

    At home in Sweden it will also introduce the Afound brand, an off-price marketplace offering products from fashion and lifestyle brands.

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  • H&M to close stores and expand on Tmall

    H&M to close stores and expand on Tmall

    It is normal practice to use Tmall to test the Chinese market. Is H&M tinking of using Tmall to replace its physical stores?

    As inventories rose and sales tanked in the fourth quarter, H&M announced it is picking up the pace on a transformation plan.

    Q4 sales fell 4% to $5.97 billion from the same period a year ago and foot traffic to stores declined, according to a company press release.

    CEO Karl-Johan Persson said the company would scale back its physical expansion and close some stores, but its collaboration with Alibaba is expanding.

    H&M and H&M Home brands will begin selling on Tmall and the company is in “far advanced discussions” to sell the rest of H&M’s brands through the Chinese e-commerce marketplace, according to another press release.

    Also last week, H&M rival Inditex reported a net sales rise of 10% to €17.96 billion ($21 billion) in the first nine months of fiscal 2017.

    The Spanish apparel company, owner of Zara, also announced the rollout of same-day delivery, automated in-store pick-up points for online orders and next-day delivery in six markets, including in Spain, France, the U.K. and China.

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  • Volvo’s XC60 makes China debut on Tmall

    Volvo’s XC60 makes China debut on Tmall

    Volvo, the Chinese-owned automaker founded in Sweden, debuted the latest iteration of its best-selling XC60 model on Tmall, Alibaba’s B2C shopping platform.

    The online offer meant that Chinese consumers can buy the new crossover SUV from Volvo, which is a unit of Hangzhou-based Zhejiang Geely Holding Group, a day before it goes on sale through all of Volvo’s other distribution channels in China.

    The XC60 comes in about a dozen colors depending on the market, but the blue version will be available only to Tmall shoppers. All 288 exclusive blue models offered in the initial round of sales on Tmall, starting at RMB 429,900, were sold out within the first 75 seconds.

    Also, 40 of the new cars will be available to Alibaba Super Members for a Super Test-Drive, a service introduced last week as part of Alibaba’s soon-to-launch Auto Vending Machines.

    The announcement is the latest in a series of initiatives from Alibaba in the auto space. Earlier this month, the Chinese technology giant announced a partnership with Ford Motor in which the two companies said they would leverage artificial intelligence, cloud computing, the Internet of Things and e-commerce via Tmall to “redefine the consumer journey and user experience for automobiles.”

    SEE ALSO : Alibaba’s Singles’ Day Sales Hit $10 Billion in one hour

    Tmall is also slated to open its car vending machine next month, although the location has yet to be disclosed. Consumers will browse cars stored in a massive garage-like structure on their smartphones, make their purchase, and then the cars will be delivered to them at ground level. The cars, including the XC60, will also be available for a test-drive.

    “The car vending machine reflects our efforts in New Retail, and we hope working together [with Volvo] to develop this innovative business model can help drive the transformation of the auto industry,” Bo Liu, marketing director of Tmall, said.

    First unveiled at this year’s Geneva Motor Show, the new mid-size SUV replaces Volvo’s highly successful original XC60. The model, which has been around for nearly a decade, represents about 30% of Volvo’s total global sales today.

    Volvo said that the second-generation XC60 is one of the safest cars ever made. It features the latest in safety technology, such as a new Oncoming Lane Mitigation system, which uses a steer assist to help mitigate head-on collisions. The SUV recently captured Japan’s most prestigious automotive award, the Japan Car of the Year, beating finalists including BMW 5-Series and Lexus LC.

    Automakers worldwide have been investing in innovative approaches to auto retail, as China’s automotive market expects significant growth. According to a September McKinsey report, China will contribute over half of global car sales growth through 2022, while the growth in the luxury car category is expected to outpace the rest of the market.

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