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The Aeon Group, one of Japan's largest retailers, is to launch a network of smart stores that are capable of anticipating what customers are most likely to buy when they enter the store.

Data-driven smart stores

Facial recognition is widely used in China, mostly in cashless payment. Whereas in Aeon China’s smart stores, it is to be used to recognise shoppers upon entry.  This then triggers personalised product recommendations and digital coupons to be displayed on shoppers’ smartphones, based on shoppers’ shopping habits and digital payment history. This approach has the benefit of resulting in good redemption rate, which will in turn drive same store sales.

EPOS (electronic point of sale) data will also be used for automatic inventory management to make sure products are in stock. To further keep the costs down, all checkout counters are unmanned.

The retailer plans to convert 80 of its outlets in China into smart stores over the next few years.

Establish required capabilities to compete in China

The group is to set up Aeon Digital Management Centre this month in Hangzhou, where Alibaba’s HQ is also based. The centre is dedicated to the development of the technologies needed for the smart stores. Meanwhile, Aeon is planning an online supermarket and a cross-border ecommerce platform to be launched in China this year.

Data generated from these digital operations will increase the retailer’s expertise and capabilities to compete in China, a breeding ground of technology-driven retail businesses.

Aeon also has plans to bring the smart store concept to its stores in Japan and South East Asia.

 

 

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A.S Watson will invest HKD1bn (US$128m) on digital innovation over the next ten years as it continues to step up transformation across the business to enhance the shopping experience.

Staying ahead of competition

A.S. Watson continues to invest in technology and ecommerce. By next year, the retailer will have spent approx. HKD1bn on digital and technology since 2012. Over the next ten years, it plans to invest another HKD1bn. In recent years, A.S. Watson has invested in self-checkout machines, virtual technology make-up service, predictive modelling technology and facial recognition for payments. It has also launched a Technology Partnership Programme to build a network of strategic partners.

Investment in personalisation

Looking ahead, the retailer plans to roll out machines for skin analysis, digital panels to let customers choose products and technologies for customising product positioning in different stores. It continues to introduce new initiatives to offer greater personalisation, as well as partner technology start-ups in countries such as Canada, the U.S. and Australia to accelerate digital transformation.

In 2017 for example, A.S. Watson partnered with Toronto-based Rubikloud as part of its investment in big data capabilities. At some of its stores, the retailer has developed a traffic management system that uses big data analytics to help it choose future store locations.

A.S. Watson FY18 results: sales up 10%

Click here to see A.S. Watson’s FY18 results.

Want to know more?

Subscribers can read more on A.S. Watson's Strategic Outlook here.

As an important move to capitalise on China’s massive tourism market and offer Chinese travellers a holistic travel experience, Alibaba is launching a new shopping platform called Fliggy Buy.

An innovative new service

The service allows Chinese travellers to choose from a range of products, including cosmetics, suitcases, bags and alcohol, prior to their international travel. They can then select a pick-up store, input their personal information and make the payment. After arriving at the destination, shoppers can pick up the goods at their leisure.

Information about the products and reviews are in Chinese. Shoppers have the opportunity to understand product features and compare prices across different channels before making the purchase.

In recent years, the focus of Chinese tourists are shifting away from shopping to local experience. The new service allows them more time to explore and experience the destination.

Why it is an important initiative

With US$115bn spent on international trips in 2017, 140mn oversea trips took last year and average spend up by +9% year-on-year in 2018, the new service offers brands and retailers an opportunity to capitalise on this massive market.

At current initial stage, duty-free and tax-free stores are the focus. Alibaba has plans to recruit more overseas merchants to including high-end luxury brands, household electronics retailers, pharmacy and cosmetics stores to enrich product offering.

As shoppers become more selective, targeted marketing becomes more important. Just as Roman Zhu, head of Fliggy Buy, commented:” The launch of Fliggy Buy represents our latest move to work with merchants targeting the vast number of tourists from China to develop innovative solutions and offer them targeted customer traffic. Our aim is also to embrace the potential of digital technology and provide a holistic travel experience encompassing food, accommodation, transportation, sightseeing, shopping and entertainment.”

 

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Alibaba has outlined two initiatives to bring US$200bn worth of international products into China over the next five years.

Offering new opportunities for suppliers from around the world

One of Alibaba's core missions is to make it easy to do business anywhere. In China, it looks to help different businesses enter the market and trade successfully. One route to market for suppliers is Tmall Global, a cross-border online platform. Alibaba has announced two solutions offered by Tmall Global to support international brands maximise opportunities for strong demand for quality products: Centralised Import Procurement (CIP) and Tmall Overseas Fulfilment (TOF).

Access to nearly 700m users on Alibaba platforms

The CIP program uses six centres Alibaba has set up across the world, sourcing imported goods for all the online and offline stores within Alibaba's economy, including Freshippo, Tmall and Intime Department Store. The program provides international brands access to a strong user base.

TOF allows brands to place a small order of products at one of the TOF centres to be sold on Tmall Global. This gives businesses to test, learn and optimise their assortment before investing further in China. TOF centres are currently available in Japan, South Korea and the U.S. Key to supporting fulfilment is Alibaba’s smart logistics network Cainiao, which will continue to expand its warehouses in China. It aims to triple its total size to 3m sq m in three years.

Wrapping customers and brands into the economy

Alibaba has a deep understanding of its shoppers. Its wide economy means that customers can access grocery, lifestyle and other amenities through different subsidiaries. Brands and suppliers working with just one division e.g. Tmall Global, have the option to integrate further by getting involved elsewhere in the economy. Alibaba's economy is also flexible, allowing different parts of the business to bolt onto the retailer's other channels. Tmall Global for example, can help brands drive awareness by tapping into Taobao Livestream.

Want to know more?

Subscribers can read more on Alibaba's Strategic Outlook here.

This in-depth guide to China explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

Five year growth forecasts for the grocery market, the leading retailers and modern trade grocery channels in China.

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The Aeon Group, one of Japan's largest retailers, is to launch a network of smart stores that are capable of anticipating what customers are most likely to buy when they enter the store.
Japanese cosmetics giant Shiseido is to become the world’s first multinational cosmetic company to open a dedicated office in Hangzhou to work with Alibaba and co-create products for Chinese consumers.
As an important move to capitalise on China’s massive tourism market and offer Chinese travellers a holistic travel experience, Alibaba is launching a new shopping platform called Fliggy Buy. 
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