HONG KONG — The inaugural Asian E-tailing Summit, organised by the Hong Kong Trade Development Council (HKTDC), concluded yesterday. The one-day event offered a one-stop platform to explore the future development of e-commerce and was attended by more than 1,000 e-tailers and business professionals from other related sectors.
The rapid growth of e-tailing has transformed the retail landscape, becoming a crucial engine driving global consumption. The Summit’s plenary session discussed the impact of rising digital consumption on the global economy. Speakers included Kiril Popov, Senior Analyst, Fung Global Retail & Technology; Dai Feng Jun, General Manager, Hong Kong Suning Commerce Co, Ltd; Yang Tao, founder and CEO, Kilimall International Ltd; Giulio Xiloyannis, Managing Director, ZALORA; and William Ip, Director, Large Enterprise, Hong Kong, Korea and Taiwan, PayPal.
Chairing the session, Mr Popov kicked off the discussion with the latest US retail trends. He said that 6,885 retail stores closed in 2017, up by 22 per cent over a year earlier, due to growing online retail traffic and declining sales at physical stores. Meanwhile, merger and acquisition activities among big retailers and e-tailers has grown more prevalent. For example, international luxury handbag brand Coach acquired rival, Kate Spade New York, while pet supplies store PetSmart Inc acquired pet supplies e-tailer Chewy.com.
Mr Popov also stated that Amazon.com is now the largest online retailer in the United States accounting for 55 per cent of online sales over the US Thanksgiving period last month. The company is expanding to a variety of retail categories, including apparel. In a bid to offset competition from Amazon, Walmart has acquired a number of fashion and apparel brands, while leveraging its physical retail space and introducing pick-up and delivery services with its newly acquired New York subsidiary Jet.com.
On global trends, Mr Popov confirmed that the Chinese mainland is an e-tail pioneer, bringing in such innovative concepts as the experimental cashier-less and cash-less coffee shop Tao Cafe and the state-of-the-art supermarket Hema, which combines online and offline shopping allowing customers to shop, dine and order groceries for delivery from their mobile phones and using Alipay to settle payments.
Mr Popov added that big data, e-tailing allows enhanced and direct customer connection for marketing and promotional purposes. He also predicted that more and more global luxury brands will start selling online, and the use of voice-controlled digital assistants and artificial intelligence assistants will become more prevalent, drastically transforming the shopping experience. “To adapt to the new changing retail landscape, more collaborations between big corporations and start-ups, with the former providing capital and resources, and the latter offering the technology required,” he said.
– Right product, right timing, right customers
Dai Feng Jun, General Manager, Hong Kong Suning Commerce Co, Ltd, said that smart retail will be among the global retail trends. Defined as adopting smart solution to provide personalised and tailor-made products to the right customers at the right time, smart retail leverages data-driven solutions to offer the right products to end users while giving them the best shopping experience.
He stressed that smart solutions, using big data, allow retailers to collect information on consumer shopping behaviour, which can be shared with manufacturers and suppliers in order to tailor the product to meet the needs of consumers. “With good use of big data, retailers can also figure out the potential products and the best pricing strategy. As a result, the entire production-to-retail supply chain can be more efficient and sophisticated,” he added.
Mr Dai shared Suning’s own experience, saying that the company was also technology-oriented when it launched its online retail platform in 2012. But when it comes to smart retailing, he believed that only customer-oriented strategy can offer users the best shopping experience.
– Exploring e-tailing potential of emerging markets
Mr Tao shared his experience in Africa, where he started working on the Kilimall project in 2014. Unlike his initial image of a poverty-stricken continent, consumers in African cities such as Nigeria and Kenya enjoy lifestyles similar to those in developed economies. He noted that there are currently 360 million Internet users, out of the total 1.2 billion population in Africa, with the number expected to double every 15 years.
Mr Tao added that Africa is one of the fastest growing economies, posting a 4.5 per cent annual GDP growth, with GDP per capita reaching US$3,000 in 10 African countries. The continent also has the world’s youngest population, with the median age of below 18. He said growing retail demand and insufficient supply has led to expensive offerings in various retail categories that opens new e-commerce business opportunities in Africa. Many African consumers are regular smartphone and computer users, a trend that global suppliers can tap by offering the right products with reliable logistic and delivery services and payment system.
– Privacy is key to digital payments
Mr Ip said that digital payment systems are reliable means of demonetisation, providing secure money transfers. The evolution of payment methods, from cash, credit cards to mobile and various contactless payment systems has helped unlock opportunities in the digital economy.
When it comes to concerns about digital payment, Mr Ip said that while 89 per cent of interviewees surveyed opted for digital payment methods, they are concerned about privacy and security issue. He reiterated that traders should note the importance of privacy and security, when tapping e-tailing opportunities.
– Brand Exclusivity and Extensiveness is Key to Success
Leading online fashion retail platform Zalora launched its Southeast Asian operation five years ago. The company’s Managing Director Giulio Xiloyannis shared his e-tailing experience in fast fashion. He highlighted the importance of exclusivity and extensiveness in brand partners. “Zalora’s offerings range from international brands to home grown ones and small brands,” he added.
Mr Xiloyannis pointed out that different trade barriers exist for different markets, as well as varying customer behaviour. In response, Zalora adopted the localisation approach in the last five years, in terms of payment methods and supply chain management, including by introducing direct payments through local banks. Zalora also offers in-house supply chain expertise to its brand partners and suppliers to ensure an efficient and speedy delivery solution to end-users of different markets.
He emphasised that Zalora will not own a physical store that would compete with its brand partners, but the company has initiated a wide variety of marketing activities, including crossovers with fashion events to drive visitor traffic to its online platforms. He concluded that Hong Kong plays a key role in e-tailing as it serves as a hub for many fashion brands and is the gateway for Chinese brands to enter Southeast Asia. Importantly, Hong Kong is the biggest sourcing hub in the region, and possesses a deep talent pool in the creative and distribution sectors, which contributes to the development of the e-tailing business in the city.