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?

Farming Initiative “Jutudi” to Offer Customers Fresh Produce at a Lower Price

On June 22 Alibaba’s flash-sale and group-buying platform Juhuasuan launched an updated version of Jutudi, an initiative to offer fresh farm produce at a lower price. Jutudi first debuted in 2014 and enabled customers buy fresh produces directly from farmers. Since Jutudi works directly with the cooperatives and farmers, the transaction bypasses wholesalers and distributors, customers can get farm produce at a lower price. Jutudi says it offers fresh produce at prices 30-50% lower.

With this updated version, Jutudi will provide farmers with consumer data. Jutudi leverages an algorithm to give farmers insights to help them better predict consumers’ long-term demand so they can better plan which crops or how much crops to plant.

Traditionally, farmers plan their crops based on sales of the previous season. This often incurs the risk of over-production or under-production. However, by using data and scientific insights provided by Jutudi, farmers can more accurately predict how much crops to plant.

[caption id="attachment_93815" align="aligncenter" width="613"] Jutudi page
Source: Alizila [/caption]  

Coresight Research Insight: Juhuasuan’s latest move is to tap into China’s booming fresh food market, which is expected to reach $150 billion by 2025, a CAGR of 5.3% from 2017-2025, according to Goldstein Research.

Tmall Launches Experiential Center

On July 16, Tmall launched an experiential center in popular Shanghai shopping mall K11. Customers can participate in pop-up activities, plays and live band performances. Brands such as Vans, Bobbi Brown, Oral-B, Abercrombie & Fitch, Make Up Forever and whisky brand Ballantine’s were among the first companies to use the venue to engage Chinese consumers.

[caption id="attachment_93816" align="aligncenter" width="700"] Van’s urban art exhibition at Tmall Experiential Center
Source: Alizila [/caption]  

For each event, Tmall sends invitations to the brands’ premium customers whom Tmall identifies through its 88 VIP members, a top tier within Alibaba’s 88 membership club. Tmall also lets any customer to sign up to join the event via the Tmall Club website, Tmall’s experiential-marketing unit. Gathering data from Tmall and Tmall Club, brands can gauge initial consumer interest and which customers are likely to participate.

Tory Burch Launches Flagship Store on Tmall Luxury Pavilion

On July 23, American fashion brand Tory Burch launched a flagship store on Tmall Luxury Pavilion to sell apparel, shoes, accessories and bags. The brand is also introducing a capsule collection for Chinese Valentine’s Day (August 7), also known as the Qixi Festival.

The Chinese Valentine’s Day capsule consists of four special handbags, a case for business cards (very popular in Asia), the brand’s signature ballet flats in pink and red blocked colors and stripe prints. The collection is modeled by popular Chinese model Liu Wen in the online store.

[caption id="attachment_93817" align="aligncenter" width="700"] Tory Burch’s special edition bags for Chinese Valentine’s Day (left) and Liu Wen modeling the new collection (right)
Source: Alizila [/caption]  

With Tory Burch’s recent entry, Tmall Luxury Pavilion now offers 115 brands, ranging from apparel, beauty products and watches to luxury cars, and including Bottega Veneta, Valentino, Burberry, Tod’s, Versace and Stella McCartney.

Appendix: New Retail Developments New Retail developments in China are listed in Figure 1. [caption id="attachment_93818" 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_93819" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]     [caption id="attachment_93820" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]     [caption id="attachment_93821" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]