China may hold the future of retailing as Singles’ Day marries online and offline stores
This year’s over US$25 billion shopping extravaganza is being seen as a litmus text for how traditional retailers can operate in the age of e-commerce
When online giant Amazon bought grocery chain Whole Foods Market for US$13.7 billion in August, the move was described as a harbinger of disruption for America’s traditional retailing landscape.
But the future of global retailing may have been on view on November 11 in China, where businesses led by Alibaba Group Holding stage-managed what has become the world’s biggest online shopping event: Singles’ Day, and which this year some analysts saw as a litmus test of the way forward: the integration of online and offline stores.
Sharing centre-stage at this year’s Singles’ Day were hundreds of thousands of actual high-street stores, linked to the internet and powered by computer algorithms, big data and cloud computing, offering shoppers a seamless shopping experience that is further blurring the lines between online and offline retail.
Connecting actual shops to the internet is Alibaba’s latest strategy, and that of its e-commerce counterparts, to transform China’s 4 trillion yuan (US$603.2 billion), old-school retail market. The country is already the world’s largest online shopping market.
The idea is to form partnerships between shops and actual bricks-and-mortar premises to hook consumers into massive e-commerce ecosystems, giving them expanded data and insight into products before they buy – a comprehensive consumer experience to further boost online orders, said Andria Cheng, an analyst with eMarketer Retail.
Pascal Martin, a partner with OC&C Strategy Consultants, added that “China is perfectly positioned to leapfrog every other market with the emergence and growth of online/offline working innovatively in unison.
“The Chinese digital environment is now dominated by the deepening integration of online players such as Alibaba, who have the ability to control all the components of an online shopping experience, from browsing to payment to delivery logistics. Even Amazon doesn’t enjoy this level of integration,” said Martin.
He added that the potential of China’s digital retail industry is huge, as the country has 900 million smartphone users.