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CBBC Insights: ICT & Retail | Can British O2O technology save China's malls?

BritCham / CBBC
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By Kirk Wilson
Sector Lead for ICT and Retail
China-Britain Business Council
 
 
Ecommerce has taken China by storm. The rapid adoption of smartphones combined with a relatively under-developed mall culture has seen a huge shift to mobile ecommerce in particular. Alibaba is now considered the key commercial channel for foreign brands coming to China. The malls have staged a fightback though, best exemplified by Wanda’s 2014 ecommerce joint venture with Baidu and Tencent, which was heralded as the beginning of a mall revival based on O2O (online to offline) integration. A year on and slow progress has some wondering if the end has indeed come for traditional retail spaces in China.
 
CBBC's sector lead for ICT and retail, Kirk Wilson, considers how British companies with the right technology can bridge the online to offline divide.
 
 
Chairman of Wanda Group Wang Jianlin
 
China’s mobile ecommerce revolution
The last few years have been a good time to be in ecommerce in China. After a turbulent start that saw the exit of US giant eBay, and Amazon struggling to get traction, the domestic champions including Alibaba and JD.com have driven Chinese ecommerce to the cutting edge.  Once these tech leaders saw off the competition to consolidate their platforms and user bases, they were quick to identify major opportunities to monetise through epayments, efinance (taking advantage of China’s strict rules on bank interest rates) and microloans (making use of their huge data sets to provide an alternative source of credit data). Now they are literally moving into the malls’ own backyard by opening stores within them and setting up service delivery points across the country as they build out a new logistics infrastructure.
 
Ghost malls and the O2O opportunity
Along with this boom in ecommerce has come a reduction in the market share of offline retail. After a decades-long mall-building boom boosted by strong local government support to develop land assets, overcapacity is proving a challenge. Less popular retail locations - ghost malls – are now falling away. More innovative locations are beginning to fight back though by altering the retail/entertainment mix, introducing multi-brand stores, and paying more attention to the quality and environment of the malls to encourage leisure use. They are also changing their mind-set to embrace online ecommerce rather than fighting the losing battle against it.
 
As a result, O2O promotions, indoor mapping linked to offers, pop-up stores promoted through social networks, and the ubiquitous QR code links to stores’ WeChat accounts are being combined with O2O cinema advertisement and the opening of ecommerce offline stores to directly link the online platforms with offline retail and entertainment experiences.
 
 
Alibaba's Jack Ma and Wanda's Wang Jianlin
 
In 2014 the major mall developer Wanda led a joint venture with two of the largest technology companies, Baidu and Tencent, to drive this trend forward. Baidu is China’s main online search/mapping/data tool and recently invested US$10 million in Finnish magnetic-positioning technology company IndoorAtlas to boost its indoor mapping capability. Tencent is now the main online social media platform in China and provides an online link to shoppers for advertising and epayments.
 
With such impressive resources, the deal was hailed as a major step forward. Later last year Dong Ce, CEO of the joint venture, stated very simply: “Wanda will become the world’s largest O2O ecommerce platform.” But a year into the deal, little has been heard about on-the-ground developments, which has some wondering about the strategic ability of these three giants to work together, and what this may mean for Wanda’s O2O ambitions.
 
The opportunity for the UK
Whatever the result for the Wanda deal, it’s clear that there is a huge amount of investment moving into the area and an active market for O2O solutions that can help to bridge the online-offline divide. British companies with technology for online payments, digital marketing, niche ecommerce platforms, mapping technology (mobile-social based, magnetic positioning), retail consultancy, internet of things (IoT) and smart retail operations (RFID, sensors, wireless, networking & connectivity, IC design, supply chain logistics) should be observing carefully.
 
For more information, please contact Kirk Wilson, CBBC's sector lead for ICT and retail, in Beijing: kirk.wilson@cbbc.org.cn.
 
 
英国O2O技术是否能够拯救中国商场?
 
行业透视:信息与通信技术及零售
Kirk Wilson(卫可)
英中贸易协会信息通信技术与零售行业商务顾问
 
 
电子商务已在中国掀起了发展浪潮。智能手机的迅速普及加之相对不发达的商场文化使人们的购物方式迅速转向了移动电子商务。阿里巴巴如今已是国外品牌引进中国的主要商业渠道。然而商场已经开始了反击,最好的例子就是2014年万达、百度和腾讯电商合资企业的建立,其预示着融合O2O技术的商场复兴的开始。然而一年来其缓慢发展让人不禁开始怀疑是否中国的传统零售已经走到了尽头。
 
中国的移动电子商务革命
过去的几年是在中国发展电子商务的大好时机。尽管在开始阶段美国巨头eBay退出中国电商市场且亚马逊难以立足,国内电商领跑者阿里巴巴和京东却把中国电商推向了前沿。一旦这些高科技领导者赶走了竞争者并巩固了自己的发展平台和用户基础,他们便能很快从电子支付、电子金融(利用中国对银行利率的严格规定)和小额信贷(利用他们巨大的数据集提供信贷数据的替换来源)方面发现巨大赚钱机会。现在,他们通过在商场开设实体体验店并提供配送服务占领线下零售,从而在全国范围内开放服务点而真正进入了商场的“后院”。
 
门可罗雀的商场和O2O带来的机遇
随着电商的发展,线下零售的市场份额逐渐减少。在经历了由政府政策支持而带来的长达数十年的商场建设热潮后,产能过剩已经带来了一些问题。不太受欢迎的零售地点正在消失。更有创造力的商场则正在反击。他们改变以往商场以零售为主的模式,增加了商场的娱乐功能、推出多品牌专卖店并更加注重提高商场的质量和环境来吸引人们前来放松休闲。同时,他们也在改变观念拥抱电子商务而不是与它进行没有胜算的抗争。
 
其结果是,O2O推广、和商店优惠相连接的室内定位、通过社交网络推广的零售店以及无处不在的商店微信二维码等均与O2O影院广告以及线下电商商店结合在一起,从而将线上平台和线下零售及购物体验直接联系在一起。2014年,主要商店开发商万达与国内两个最大的科技公司——百度和腾讯建立起合资企业来推动这一趋势的发展。百度是中国的主要网络搜索引擎、地图和数据工具,并且近期向芬兰磁定位技术公司IndoorAtlas投资了1千万美元来发展其室内定位能力。腾讯则是最主要的网络社交媒体平台,并且为消费者提供了广告和电子支付链接。
 
凭借如此有利的资源,此合作曾被认为是向前迈进了一大步。去年晚些时候,合资企业的首席执行官董策强调称:“万达将会成为全球最大的O2O电子商务平台。”然而公司成立一年后,几乎没有听说过任何实际进展,让人不禁开始怀疑这三个巨头合作的战略能力,以及这一发展对于万达O2O雄心的意义。
 
英国企业的机会
不管对于万达来说这次合作结果如何,但很显然,该领域吸引了大量的投资并且亟需可以弥合线上线下分离的O2O解决方案。拥有线上支付、数字营销、定位电子商务平台、定位技术(依托移动社交,磁定位)、零售咨询、物联网(IoT)以及智能零售业务(射频识别RFID、传感器、无线、网络、集成电路设计和物流供应链)技术的英国企业应在这一领域多注意。
 
欲知更多信息,请联系英中贸易协会信息通信技术与零售行业商务顾问Kirk Wilson:kirk.wilson@cbbc.org.cn

 

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