The way that China is amalgamating online and offline is influencing ways of thinking about retail globally according to JD.com
The world’s second largest economy is changing the way consumers at home and abroad shop online, Chenkai Ling, Vice President of Corporate Strategy & Investment at JD.com, told World Retail Congress delegates last week.
“There is lots of innovation happening in China, consumer behaviour is changing massively. Market penetration through ecommerce is very high in China compared to other continents, about 15% according to research. What we want to do is bring the retailer to the consumer,” said Ling.
As retailers strive for increased efficiency, they must build a more robust data and analytics infrastructure, he said.
“China is a highly dynamic market. At JD, we are more looking more from a consumer point of view, instead of a competitor angle,” Ling explained. “You need to understand your consumer first. The relationship will have to become more personal to be able to understand their behaviour. We need to connect with our consumers, but without making them feel like we are invading their personal space.”
He said that to be able to keep up and adapt in this digital era as a company, retailers and brands must change from a vertically-integrated business model to an eco-innovative model and integrate technology and AI efficiently.
“The future of retail is that the consumer can get whatever they want, whenever they want. However, the shopping moments will be very diversified” according to Ling. “The value of product will decrease, but the value of content and experience will increase. And whatever the consumer chooses, as a retailer, we will follow that choice.”
Using connected technology to offer traditional services allows brands to build relationships and increase sales, said Tencent in a separate session.
Leveraging technology to create a seamless online and offline experience to build sales from stores is creating new ways of shopping, Cecilia Tian, General Manager, Tencent Smart Retail, told World Retail Congress delegates.
She said that the high adoption of tools such as WeChat and of QR codes in China makes connections with consumers in physical environments easier, saying that brands have to work out: “how do you connect online and offline?”
Tian pointed to “massive adoption of technology” in China as a platform for new ways of retailing. “Scan and pay is becoming very common in China, which requires building trust and removing the fear of technology,” she said. “That is very valuable. If you look at the results almost 40% of the consumers in the shop are using scan and pay, which is driving a very unique experience.”
She also said that the online experience should start with real relationships. “Fundamentally it is about who sent what, we want the relationship to start with face-to-face, offline, where people feel comfortable in building the relationship,” she said.
Part of this approach is encouraging sales people to get in connection with the consumer. “Staff and shoppers can be connected by WeChat. We are seeing a lot of good results coming out of that,” she said.
She said that this has boosted sales orders when the store is physically closed because they can still talk to the shop assistants via WeChat.
However, she warned that this approach is complex and admitted: “It is not easy.”
