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 coined 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. Get more insights on Singles’ Day 2019 from our series of in-depth reports here to learn more about what has in just five short years grown to be the planet’s single largest shopping festival.

What’s New in New Retail

JD.com Opens an Automated Beverage House in Beijing JD.com opened a robot-operated café in Central Beijing that serves bubble tea and coffee. The robotic arms do everything: Grasping cups, mixing and stirring drinks, sealing the cups with plastic film and cleaning the workstation. The store has some staff to serve pastries and desserts, but only a few drinks require human work. The robotic arms were design by from JD Logistics to pack and sort packages: JD-X, JD’s logistics and automation lab, reprogrammed and adapted the arms to make drinks. Automation not only streamlines operations and improves efficiency, it also minimizes the chance of human error, improving product consistency. Coresight Research insight: China’s beverage market continues to expand, driven by demand from younger generations. A number of beverage brands have upgraded stores with automation. Luckin Coffee opened a space-themed store in Beijing equipped with robotic arms to make coffee in October. In March, Bubble tea chain Happy Lemon also partnered with Alibaba’s Koubei to open its first smart store in Shanghai, which uses robotic tea mixer and intelligent pickup lockers, and plans to open more similar stores. Alibaba Partners with Universal Beijing Resort to Digitalize Operations Alibaba has announced a strategic partnership with Universal Parks & Resorts to digitalize operations at the Universal Beijing Resort, set to open in 2021. The park will use the Alibaba Business Operating System, a service package that assists brands accelerate digital transformation in branding, sales, logistics and on-demand local services. Alibaba will support Universal Beijing Resort by in a variety of ways:

• Universal Beijing Resort will launch its flagship on Fliggy, Alibaba’s online travel platform, which also allows customers to book tickets and hotels.
• Alibaba’s video streaming platform Youku will showcase resort-related videos and Universal movies to promote the Universal brand.
• Universal Beijing Resort will use Alipay’s facial recognition payment technology across the park from entry, storage lockers to express-lane and food and retail locations.
• Alibaba will expand features of mini programs in the Alipay app to improve the customer experience, such as showing easier trip planning or parking.
• Alibaba’s local service app Koubei will offer personalized food and beverage recommendations, which users can use to order ahead to reduce wait time.
• Tmall will collaborate with Universal Beijing Resort to release co-marketing campaigns.
• Alibaba Cloud will support the resort’s digitalization and technology infrastructure.

[caption id="attachment_98880" align="aligncenter" width="700"] Source: Alizia[/caption]   JD.com Helps Beijing’s New Daxing Airport Improve the Travel Experience JD.com is using its capabilities in logistics and technology to enhance the travel experience in Beijing’s newly opened Daxing Airport. As the logistics service provider for airport’s dining business, JD Logistics uses its cold-chain system to deliver fresh and frozen food, supported by a nearby cold chain warehouse. The company also manages storage and delivery for retail businesses in the airport and services for excess baggage: Travelers can ship products anywhere in China from one of two JD Express delivery stations in the airport. There are also two JD Retail Experience Shops in the airport that offer an omnichannel shopping experience. Customers can place an order online by scanning a product's QR code and have it delivered to any destination in China. And, customers can even on JD Retail Shop’s mini program on WeChat in advance and pickup in in the airport store. The shops sell electronics, smart devices and computers, headphones, and drone, as well as cosmetics and personal care products. The smart shelf displays product information and reviews when customers touch the product. JD is helping even outside the airport: Finding a parking space. Partnering with Shougang Fund S-PARK, the parking lot operator, JD will implement a smart parking system that lets drivers check a real-time map of available slots and pay via an app. [caption id="attachment_98881" align="aligncenter" width="700"] JD Express delivery station in Beijing Daxing Airport
Source: Jdcorporateblog.com[/caption]   Appendix: New Retail Developments New Retail developments in China are listed in Figure 1. [caption id="attachment_98952" 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_98956" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]   [caption id="attachment_98960" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]   [caption id="attachment_98885" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]