Episode 2 – A Glimpse of the Future: Asian New Retail, Opportunities and Trends
In the first part of this article, we discussed some of the reasons for the emergence of New Retail in Asia: a unique economic and demographic context and the growing penetration of mobile technologies, and in particular the adoption of convenient and secure online payments.
A recent example of New Retail just Luckin Coffee, one of the new unicorns from China, which competes with Starbucks with orders via Apps and payments by automatic scan.
But if Europe wants to get a glimpse of the upcoming transformation of department stores, just look at the connectivity of Hema supermarkets, which belong to the Alibaba group:
Here are a few more examples of the spread of this phenomenon, in China only:
And the growth potential of these “unmanned” stores is immense, as this diagram from iResearch shows:
However, this hyper-connected vision of large groups does not necessarily correspond to all cases. In the world of Retail, every product category, location and consumer segment requires a different approach and the only real way to understand those needs is to use the golden rule of New Retail : place the interest or desire of the consumer before any other consideration.
The movement has already taken place in France and, in addition to Criteo and its omnichannel offer dedicated to brands and marketplaces, of RetailTech startups innovate by offering digital scenarios that complement the major brands: offline-online, IoT, CRM and POS innovation, payments. The territory is favorable to this growth, in particular thanks to a solid mass distribution industry, but weakened by the arrival of large eCommerce sites and strong competition from specialized stores.
For readers interested in some of the initiatives from France:
Utopia or dystopia?
A shortcut would be to think that the New Retail is just another “trending” term and is really just the extension of eCommerce to physical stores. While it is true that the phenomenon started when major marketplaces, such as Alibaba and JD, started listing products from physical merchants, the New Retail is actually a new sales approach that consists of selling products produced in record time, the quality of which is revised regularly based on customer feedback, making them available anywhere, all the time, and encompassing them in a context of leisure, discovery and exclusivity.
Environmental concerns will push consumers to demand more and more energy savings, a limitation of packaging products and increased traceability, in particular on “organic” products or those coming from abroad, which will accelerate the ‘adoption of solutions’New Retail”. The hyper-localization of merchants, personalization, access to the most remote places of society, could on the other hand help to create new geographical areas linking urban and rural areas.
By projecting itself further, agriculture would become mechanized and robotic, linked in real time to an online inventory in order to produce “just-in-time”, or even, as Amazon envisages, through its patents. early delivery, predict product purchases and send them to users based on their searches, desires, feelings and agendas.
This upheaval from Asia will affect all sectors of the economy, because, as we have seen, we are no longer talking here of simple phenomena of consumption, but of a mix of leisure, shopping, travel, transport and payments, irreparably transforming Industry, Employment, Education and, hopefully one day, Ecology.
That being said, innovation, localization and customization are expensive. The return on investment (ROI) is often lower than the invested capital, because fundamentally, each merchant will offer additional services and “experiences” for free, but the user will remain above all sensitive to price variations. It is therefore a long-term digital transformation, targeting consumer loyalty, but competition between sellers is still based on price.
A New Retail profitable will only be able to develop in France in a logic where the “shopping” experience itself will become monetized. This means that significant service and content customization efforts will be required in the years to come.
The French government has put in place a number of studies and investments focusing on future technologies, including Artificial Intelligence and Blockchain, but these measures will have to be followed by a gathering around specialized poles “New Retail”, Public and private, unifying entrepreneurs, patent holders, regulators, startups, large groups and administrations. The French Tech Community Fund wanted and announced by the Secretary of State for Digital, Mounir Mahjoubi, could enter into this development framework.
In the manner of Southeast Asia, we need to think about the creation of a retail “sandbox” environment favoring these partnerships and maximizing the potential of disruptive incubators, such as Station F, TheCamp, MonacoTech.
This initiative can only be considered in a European framework and will join Jack Ma’s current intention to create a eWTO (e-World Trade Organization), optimized thanks to Artificial Intelligence and secured by Blockchain, therefore verifiable by all.
The France of the future will be built on the foundation of New retail and will be set up thanks to start-ups and large groups, around a common project: to provide new secure and GDPR-compliant tools, for information exchange, payment, customer journey and marketing, in order to to imagine a new consumer society, less endured and more ecological.
Alban Villani is the Managing Director for Criteo in South East Asia, Hong Kong and Taiwan. Among the first three employees to open the Singapore office and operations in 2013, Alban has contributed to business and strategic development in India, Singapore, Taiwan, Hong Kong, Vietnam, Indonesia, Thailand, Malaysia, and the Philippines . Before joining Criteo, Alban worked in content creation (movies, TV, mobile games) and eCommerce.
His expertise in investment and consulting covers many technologies – Artificial Intelligence (Machine-Learning), Blockchain, Payments (Fintech) and Omnichannel Marketing. From Singapore, Alban is co-chairman of the Commerce committee of the Internet Advertising Bureau (IAB) in South Asia and Foreign Trade Advisor for France.