New Retail Briefings

“New Retail” is a model for integrating online retail, offline retail and logistics across a single value chain powered by data and technology. The term was introduced by Alibaba Group, although many other companies in China and elsewhere are implementing various elements of the model. In this biweekly series, we review the latest trends in New Retail, with a focus on major digital platforms and multichannel retail companies in China.

What’s New in New Retail?

Alibaba to Build Digital Trading Platform in China’s Wholesale Hub Yiwu

Alibaba Group has entered into a strategic collaboration with the municipal government of Yiwu to launch a digital trading platform — called Electronic World Trade Platform (eWTP) — in the city. Yiwu is in the eastern province of Zhejiang (just south of Shanghai) and is the world’s largest wholesale market for merchandise such as jewellery, decorative items and stationery.

The eWTP digital trading platform will provide infrastructure such as cloud computing, mobile payments and logistics for Yiwu’s small and medium enterprises (SMEs) to trade electronically and sell products outside China. Under the eWTP initiative, Alibaba and Yiwu will build the eWTP hub to establish a smart logistics hub, as well as other infrastructure services to facilitate cross-border trades.

Yiwu attracts more than 500,000 buyers from around the world every year. The city has around 450,000 merchants, the majority of which are SMEs. These merchants export goods to almost every country.

[caption id="attachment_92099" align="aligncenter" width="700"] Alibaba Group enters into a strategic collaboration with the municipal government of Yiwu to establish the eWTP hub
Source: Alibabanews.com[/caption]  

Coresight Research Insight: Alibaba’s digitalization efforts continue to move up the supply chain to benefit more wholesale merchants. The eWTP initiative is the latest move in Alibaba’s globalization plan following the expansion of its international e-commerce platform AliExpress into the Russian market in early June.

Online Medical Services Platform Xiaolu Clinic Receives New Funds

Xiaolu Clinic, an online platform that connects traditional Chinese herbal doctors to patients, announced on June 25 it has closed a $20 million pre-C funding round from Nokia Growth Partners (NGP) Capital. The company said it will use the funds to improve its supply chain and strengthen artificial intelligence research.

Xiaolu Clinic lets traditional Chinese herbal doctors to consult patients online. After diagnosis, patients can purchase the herbal medicines the doctor prescribes on the platform. The company has subscribed to  logistics company SF Express’ next-day delivery service to ensure timely delivery of medicine to patients. Xiaolu Clinic currently has more than 25,000 traditional Chinese medicine doctors registered on its platform.

Xiaolu Clinic also has a presence on social media platform WeChat: Users can find a doctor and schedule an appointment on the company’s WeChat official account.

[caption id="attachment_92100" align="aligncenter" width="700"] Xiaolu Clinic WeChat Official Account
Source: WeChat[/caption]  

Omega Opens a Pop-Up Store on Tmall Luxury Pavilion

Swiss watchmaker Omega launched a pop-up store on Tmall Luxury Pavilion, an app-only platform dedicated to luxury brands operated by Alibaba. From June 15 to August 7, Omega will hold pre-sales for its new “Seamaster Aqua Terra Beijing 2022” limited-edition wristwatch exclusively on the pop-up site. This edition will be limited to only 2,022 watches in tribute to the coming 2022 Winter Olympic Games in Beijing.

[caption id="attachment_92101" align="aligncenter" width="700"] Omega’s pop-up store on Tmall Luxury Pavilion
Source: Alizila[/caption]  

With Omega’s recent participation, Tmall Luxury Pavilion now offers 113 brands, ranging from apparel, beauty products and watches to luxury cars, with brands including Bottega Veneta, Valentino, Burberry, Tod’s, Versace and Stella McCartney, according to Alizila, the news hub for Alibaba Group.

 

Appendix: New Retail Developments

New Retail developments in China are listed in Figure 1.

  [caption id="attachment_92106" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption] Investments and Acquisitions in New Retail To expand New Retail abilities, Alibaba, Tencent and JD.com have invested in logistics firms, online marketplaces, content-creation companies and even brick-and-mortar stores. See selected transactions in the following tables: [caption id="attachment_92109" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption] [caption id="attachment_92112" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]   [caption id="attachment_92113" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]