Depth report

　　

Like many revolutions, the retail revolution seems to have gone round and back: Alibaba, the pioneer of online retail in China, is acquiring physical stores.

    Alibaba's plan to use US$2.6 billion to privatize the leading domestic department store operator Intime Retail highlights the current dilemma of these "disruptors": how to blur the distinction between online and offline shopping It also creates a model that allows customers to keep shopping fun and feeling; at the same time, it allows retailers and brands to collect big data that helps them sell more goods, sell faster, and make more profits.

    Alibaba CEO Daniel Zhang said at a panel discussion in Davos last week: “Now we can’t separate online and offline.” He pointed out that even when shopping in a mall, people will Use a mobile phone-it is completely online and offline synchronization.

    Alibaba has invested in some offline companies, such as retailer Suning and white goods manufacturer Haier. But it is not the only e-commerce group that has returned to physical sales. Last month, Amazon's automatic checkout store, Amazon Go, opened. Other cross-over innovations have also sprung up, such as Panasonic (Panasonic) launched a "smart shopping basket"-it will automatically account for the items placed in it.

    Tom Birtwhistle, senior manager of PwC's Hong Kong digital strategy department, said: "It is wrong to say that the physical store is dying. It just needs to evolve-for example, into a smaller store. -And embracing in-store digital technology."

    Start-ups are also learning from it. Luke Grana founded the clothing company of the same name in 2014. He had to change his original plan of only being an e-commerce company and launched a temporary "fitting room".

    He said, “We realized that we need an offline presence to increase brand awareness and promote people to buy online. Many people want to try on them before they buy in order to buy the right style.”

    Customers can try on clothes in the store, but they will still place an order online via iPad—"there is no cashier"—and then let the merchant deliver it to the door. This "partial offline purchase" currently accounts for 10% of sales.

    Alain Bejjani, chief executive of Majid Al Futtaim Holding, an operator of shopping malls, retail and leisure operations, agrees with this view, treating physical stores as merchandise showrooms. He said at a panel discussion in Davos: "This is not only about products and prices, but also about seamless shopping processes and complete integration between online and offline."

    Alibaba does understand these words. Data from HSBC shows that Alibaba accounts for more than one-tenth of China's total retail sales and 75% of online retail sales. Its app allows shoppers to find major shopping malls in China (some of them occupy more than 1 million square feet) and find where their cars are parked when they leave a few hours later.

    But it is also rewriting the rules of the well-trained "click to pick up" model, and get big data to feed back to retailers, so that they can manage inventory more effectively.

    Tompkins International's Michael Zakkour (Michael Zakkour) said: "Alibaba and Amazon have two identical goals, one is 2 billion customers, and the other is to reshape the retail model and experience."

    "Much like the way department stores, chain stores, shopping malls, hypermarkets, and e-commerce reinvented retail in the past, Alibaba is using technology, big data and imagination to connect online and offline, so that only There is a single-channel retail experience."

    Zhang Yong talked about the disintegration of the traditional vertical system in which manufacturers sell goods to a few large wholesalers, who then sell them to small wholesalers, which then sell to retailers, and finally the goods reach consumers.

    Alibaba's integration strategy is to take another step toward what its founder Jack Ma called "new manufacturing", or a step back. In the so-called new manufacturing model, data can be used to tell manufacturers in advance what customers want to buy.

    Manufacturers are also beginning to see a flatter system and are looking for ways to get closer to consumers. In July last year, Anglo-Dutch consumer goods manufacturer Unilever spent $1 billion to acquire Dollar Shave, which sold razors and beauty products directly to consumers through door-to-door delivery.

    This month, perfume and lipstick producer Coty (Coty) bought a majority stake in online cosmetics retailer Younique. Some personnel changes also reflect this intersection between the Internet and manufacturers: American toy maker Mattel invited Google executive Margaret Georgiadis to serve as his next post. CEO.

    Some people doubt whether predictive data is sufficient to indicate fashion trends. "They don't show up in the small streets of Korea to look at styles or fabrics," one participant said.

    Some people also mentioned conflicts. Alibaba claims to be a platform, not an asset-heavy e-commerce like Amazon, but the acquisition of Intime will allow Alibaba to integrate a piece of physical business into its asset-light ecosystem.

    Citigroup analyst Alicia Yap wrote in a research report on how this acquisition will be integrated in the future and how Alibaba "manages potential conflicts between Intime and other merchants and brands on its platform." , She holds a "cautious attitude."

    Others pointed out that China’s online/offline model is different from that of the West. Western platforms are mainly owned by retailers or brands, while in China, the e-commerce market is dominated by third-party platforms, whether it is Alibaba’s Tmall. (Tmall) or Jingdong (JD.com).

    "If a customer purchases through a third party, the granularity of the data you get about the customer can never be compared with the situation where the platform is directly yours. This is the problem that all large (multinational companies) have to deal with at the beginning," Burt Wester Er said.

    "So, it is difficult to link online data with offline data. Solving this problem is something that is worth billions of dollars. No one has really found an answer yet."