1 00:00:00,560 --> 00:00:02,520 This is my nephew, 2 00:00:03,280 --> 00:00:04,576 Yuan Yuan. 3 00:00:04,600 --> 00:00:06,096 He's five years old, 4 00:00:06,120 --> 00:00:07,400 super adorable. 5 00:00:08,360 --> 00:00:10,336 I asked him the other day, 6 00:00:10,360 --> 00:00:12,720 "What would you like for your birthday this year?" 7 00:00:13,360 --> 00:00:17,440 He said, "I want to have a one-way mirror Spider-Man mask." 8 00:00:18,000 --> 00:00:20,776 I had absolutely no idea what he was talking about, 9 00:00:20,800 --> 00:00:22,776 so I said, "Wow, that's really cool, 10 00:00:22,800 --> 00:00:24,372 but how are you going to get it?" 11 00:00:25,120 --> 00:00:28,016 He told me, without a blink of his eyes, 12 00:00:28,040 --> 00:00:32,119 "I'm going to tell my mom and make a wish before I go to bed. 13 00:00:32,759 --> 00:00:34,720 My mom will go to shake her mobile phone. 14 00:00:35,400 --> 00:00:39,680 The next morning, the delivery uncle will give it to me when I wake up." 15 00:00:41,320 --> 00:00:43,296 I was about to tease him, 16 00:00:43,320 --> 00:00:45,096 but suddenly I realized 17 00:00:45,120 --> 00:00:47,456 he was simply telling me the truth, 18 00:00:47,480 --> 00:00:51,616 the truth of what shopping looks like for this generation. 19 00:00:51,640 --> 00:00:55,256 If you think of it, for a child like Yuan Yuan, 20 00:00:55,280 --> 00:00:57,576 shopping is a very different idea 21 00:00:57,600 --> 00:01:00,496 compared to what my generation had in mind. 22 00:01:00,520 --> 00:01:02,776 Shopping is always done on mobile, 23 00:01:02,800 --> 00:01:04,879 and payment is all virtual. 24 00:01:06,000 --> 00:01:10,480 A huge shopping revolution is happening in China right now. 25 00:01:11,120 --> 00:01:14,976 Shopping behaviors, and also technology platforms, 26 00:01:15,000 --> 00:01:17,856 have evolved differently than elsewhere in the world. 27 00:01:17,880 --> 00:01:21,776 For instance, e-commerce in China is soaring. 28 00:01:21,800 --> 00:01:24,616 It's been growing at twice the speed of the United States 29 00:01:24,640 --> 00:01:27,280 and a lot of the growth is coming from mobile. 30 00:01:27,920 --> 00:01:32,696 Every month, 500 million consumers 31 00:01:32,720 --> 00:01:34,816 are buying on mobile phones, 32 00:01:34,840 --> 00:01:36,576 and to put that into context, 33 00:01:36,600 --> 00:01:39,816 that is a total population of the United States, 34 00:01:39,840 --> 00:01:42,280 UK and Germany combined. 35 00:01:43,040 --> 00:01:46,896 But it is not just about the scale of the e-commerce, 36 00:01:46,920 --> 00:01:51,496 it is the speed of adoption and the aggregation of the ecosystems. 37 00:01:51,520 --> 00:01:56,016 It took China less than five years to become a country of mobile commerce, 38 00:01:56,040 --> 00:02:01,176 and that is largely because of the two technology platforms, 39 00:02:01,200 --> 00:02:02,720 Alibaba and Tencent. 40 00:02:03,120 --> 00:02:06,696 They own 90 percent of the e-commerce -- 41 00:02:06,720 --> 00:02:08,376 pretty much the whole market -- 42 00:02:08,400 --> 00:02:10,735 85 percent of social media, 43 00:02:10,759 --> 00:02:13,896 85 percent of internet payment. 44 00:02:13,920 --> 00:02:20,456 And they also own large volumes of digital content, video, online movie, 45 00:02:20,480 --> 00:02:23,640 literature, travel information, gaming. 46 00:02:25,200 --> 00:02:28,456 When this huge base of mobile shoppers 47 00:02:28,480 --> 00:02:30,936 meets with aggregated ecosystems, 48 00:02:30,960 --> 00:02:32,816 chemical reactions happen. 49 00:02:32,840 --> 00:02:35,456 Today, China is like a huge laboratory 50 00:02:35,480 --> 00:02:38,296 generating all sorts of experiments. 51 00:02:38,320 --> 00:02:39,776 You should come to China, 52 00:02:39,800 --> 00:02:43,400 because here you will get a glimpse into the future. 53 00:02:44,520 --> 00:02:48,760 One of the trends I have seen concerns the spontaneity of shopping. 54 00:02:49,440 --> 00:02:51,496 Five years ago, in a fashion study, 55 00:02:51,520 --> 00:02:52,976 we found that on average, 56 00:02:53,000 --> 00:02:56,936 a Chinese consumer would be buying five to eight pairs of shoes. 57 00:02:56,960 --> 00:03:01,336 This number tripled to reach about 25 pairs of shoes a year. 58 00:03:01,360 --> 00:03:03,920 Who would need so many pairs of shoes? 59 00:03:04,520 --> 00:03:07,656 So I asked them, "What are the reasons you buy?" 60 00:03:07,680 --> 00:03:10,336 They told me a list of inspirations: 61 00:03:10,360 --> 00:03:15,016 blogs, celebrity news, fashion information. 62 00:03:15,040 --> 00:03:18,496 But really, for many of them, there was no particular reason to buy. 63 00:03:18,520 --> 00:03:21,016 They were just browsing on their mobile site 64 00:03:21,040 --> 00:03:23,160 and then buying whatever they saw. 65 00:03:24,560 --> 00:03:28,816 We have observed the same level of spontaneity in everything, 66 00:03:28,840 --> 00:03:32,520 from grocery shopping to buying insurance products. 67 00:03:34,240 --> 00:03:37,816 But it is not very difficult to understand if you think about it. 68 00:03:37,840 --> 00:03:40,576 A lot of the Chinese consumers are still very new 69 00:03:40,600 --> 00:03:43,816 in their middle-class or upper-middle-class lifestyles, 70 00:03:43,840 --> 00:03:46,816 with a strong desire to buy everything new, 71 00:03:46,840 --> 00:03:48,896 new products, new services. 72 00:03:48,920 --> 00:03:51,616 And with this integrated ecosystem, 73 00:03:51,640 --> 00:03:56,120 it is so easy for them to buy, one click after another. 74 00:03:57,520 --> 00:04:02,016 However, this new shopping behavior is creating a lot of challenges 75 00:04:02,040 --> 00:04:04,776 for those once-dominant businesses. 76 00:04:04,800 --> 00:04:08,656 The owner of a fashion company told me that he's so frustrated 77 00:04:08,680 --> 00:04:12,800 because his customers keep complaining that his products are not new enough. 78 00:04:13,320 --> 00:04:16,120 Well, for a fashion company, really bad comment. 79 00:04:17,519 --> 00:04:20,976 And he already increased the number of products in each collection. 80 00:04:21,000 --> 00:04:22,200 It doesn't seem to work. 81 00:04:22,800 --> 00:04:26,216 So I told him there's something more important than that. 82 00:04:26,240 --> 00:04:29,696 You've got to give your consumer exactly what they want 83 00:04:29,720 --> 00:04:30,960 when they still want it. 84 00:04:31,720 --> 00:04:36,256 And he can learn something from the online apparel players in China. 85 00:04:36,280 --> 00:04:39,536 These companies, they collect real consumer feedback 86 00:04:39,560 --> 00:04:42,056 from mobile sites, from social media, 87 00:04:42,080 --> 00:04:45,376 and then their designers will translate this information 88 00:04:45,400 --> 00:04:47,096 into product ideas, 89 00:04:47,120 --> 00:04:50,600 and then send them to microstudios for production. 90 00:04:51,160 --> 00:04:54,976 These microstudios are really key in this overall ecosystem, 91 00:04:55,000 --> 00:04:57,176 because they take small orders, 92 00:04:57,200 --> 00:04:59,376 30 garments at a time, 93 00:04:59,400 --> 00:05:02,600 and they can also make partially customized pieces. 94 00:05:03,800 --> 00:05:06,976 The fact that all these production designs 95 00:05:07,000 --> 00:05:08,456 are done locally, 96 00:05:08,480 --> 00:05:13,016 the whole process, from transporting to product on shelf or online 97 00:05:13,040 --> 00:05:15,616 sometimes takes only three to four days. 98 00:05:15,640 --> 00:05:17,336 That is super fast, 99 00:05:17,360 --> 00:05:20,976 and that is highly responsive to what is in and hot on the market. 100 00:05:21,000 --> 00:05:25,296 And that is giving enormous headaches to traditional retailers 101 00:05:25,320 --> 00:05:28,160 who are only thinking about a few collections a year. 102 00:05:30,280 --> 00:05:33,680 Then there's a consumer's need for ultraconvenience. 103 00:05:34,240 --> 00:05:37,456 A couple of months ago, I was shopping with a friend in Tokyo. 104 00:05:37,480 --> 00:05:38,736 We were in the store, 105 00:05:38,760 --> 00:05:41,576 and there were three to four people standing in front of us 106 00:05:41,600 --> 00:05:43,056 at the checkout counter. 107 00:05:43,080 --> 00:05:44,616 Pretty normal, right? 108 00:05:44,640 --> 00:05:47,416 But both of us dropped our selection 109 00:05:47,440 --> 00:05:48,640 and walked away. 110 00:05:49,440 --> 00:05:51,680 This is how impatient we have become. 111 00:05:52,560 --> 00:05:56,416 Delivering ultraconvenience is not just something nice to have. 112 00:05:56,440 --> 00:05:59,520 It is crucial to make sure your consumer actually buys. 113 00:06:00,360 --> 00:06:02,536 And in China, we have learned 114 00:06:02,560 --> 00:06:06,696 that convenience is really the glue that will make online shopping 115 00:06:06,720 --> 00:06:09,696 a behavior and a habit that sticks. 116 00:06:09,720 --> 00:06:13,296 It is sometimes more effective than a loyalty program alone. 117 00:06:13,320 --> 00:06:15,016 Take Hema. 118 00:06:15,040 --> 00:06:19,080 It's a retail grocery concept developed by Alibaba. 119 00:06:19,600 --> 00:06:21,576 They deliver a full basket of products 120 00:06:21,600 --> 00:06:24,856 from 4,000 SKUs to your doorstep 121 00:06:24,880 --> 00:06:26,736 within 30 minutes. 122 00:06:26,760 --> 00:06:30,856 What is amazing is that they deliver literally everything: 123 00:06:30,880 --> 00:06:33,096 fruits, vegetables, of course. 124 00:06:33,120 --> 00:06:35,456 They also deliver live fish 125 00:06:35,480 --> 00:06:37,800 and also live Alaska king crab. 126 00:06:38,960 --> 00:06:41,216 Like my friend once told me, 127 00:06:41,240 --> 00:06:42,936 "It's really my dream coming true. 128 00:06:42,960 --> 00:06:45,896 Finally, I can impress my mother-in-law 129 00:06:45,920 --> 00:06:48,896 when she comes to visit me for dinner unexpectedly." 130 00:06:48,920 --> 00:06:52,216 (Laughter) 131 00:06:52,240 --> 00:06:54,896 Well, companies like Amazon and FreshDirect 132 00:06:54,920 --> 00:06:57,816 are also experimenting in the same field. 133 00:06:57,840 --> 00:07:01,416 The fact that Hema is part of the Alibaba ecosystem 134 00:07:01,440 --> 00:07:04,960 makes it faster and also a bit easier to implement. 135 00:07:05,760 --> 00:07:07,656 For an online grocery player, 136 00:07:07,680 --> 00:07:10,496 it is very difficult, very costly, 137 00:07:10,520 --> 00:07:13,296 to deliver a full basket quickly, 138 00:07:13,320 --> 00:07:15,936 but for Hema, it's got a mobile app, 139 00:07:15,960 --> 00:07:17,616 it's got mobile payment, 140 00:07:17,640 --> 00:07:23,336 and also it's built 20 physical stores in high-density areas in Shanghai. 141 00:07:23,360 --> 00:07:27,256 These stores are built to ensure the freshness of the product -- 142 00:07:27,280 --> 00:07:30,176 they actually have fish tanks in the store -- 143 00:07:30,200 --> 00:07:34,480 and also to give locations that will enable high-speed delivery. 144 00:07:34,920 --> 00:07:36,936 I know the question you have on your mind. 145 00:07:36,960 --> 00:07:38,216 Are they making money? 146 00:07:38,240 --> 00:07:39,576 Yes, they are making money. 147 00:07:39,600 --> 00:07:40,856 They are breaking even, 148 00:07:40,880 --> 00:07:44,456 and what is also amazing is that the sales revenue per store 149 00:07:44,480 --> 00:07:48,496 is three to four times higher than the traditional grocery store, 150 00:07:48,520 --> 00:07:52,160 and half of the revenue orders are coming from mobile. 151 00:07:53,040 --> 00:07:55,896 This is really proof that a consumer, 152 00:07:55,920 --> 00:07:59,496 if you give them ultraconvenience that really works in grocery shopping, 153 00:07:59,520 --> 00:08:02,376 they're going to switch their shopping behaviors online, 154 00:08:02,400 --> 00:08:03,600 like, in no time. 155 00:08:05,480 --> 00:08:08,576 So ultraconvenience and spontaneity, 156 00:08:08,600 --> 00:08:10,456 that's not the full story. 157 00:08:10,480 --> 00:08:12,616 The other trend I have seen in China 158 00:08:12,640 --> 00:08:13,880 is social shopping. 159 00:08:14,440 --> 00:08:17,056 If you think of social shopping elsewhere in the world, 160 00:08:17,080 --> 00:08:18,520 it is a linear process. 161 00:08:19,560 --> 00:08:21,696 You pick up something on Facebook, 162 00:08:21,720 --> 00:08:24,336 watch it, and you switch to Amazon 163 00:08:24,360 --> 00:08:27,056 or brand.com to complete the shopping journey. 164 00:08:27,080 --> 00:08:28,736 Clean and simple. 165 00:08:28,760 --> 00:08:31,856 But in China it is a very different thing. 166 00:08:31,880 --> 00:08:36,616 On average, a consumer would spend one hour on their mobile phone shopping. 167 00:08:36,640 --> 00:08:39,296 That's three times higher than the United States. 168 00:08:39,320 --> 00:08:41,256 Where does the stickiness come from? 169 00:08:41,280 --> 00:08:44,680 What are they actually doing on this tiny little screen? 170 00:08:45,120 --> 00:08:47,576 So let me take you on a mobile shopping journey 171 00:08:47,600 --> 00:08:49,520 that I usually would be experiencing. 172 00:08:51,000 --> 00:08:53,960 11pm, yes, that's usually when I shop. 173 00:08:54,800 --> 00:08:58,416 I was having a chat in a WeChat chatroom with my friends. 174 00:08:58,440 --> 00:09:00,536 One of them took out a pack of snack 175 00:09:00,560 --> 00:09:03,840 and posted the product link in that chatroom. 176 00:09:04,320 --> 00:09:08,016 I hate it, because usually I would just click that link 177 00:09:08,040 --> 00:09:10,656 and then land on the product page. 178 00:09:10,680 --> 00:09:12,936 Lots of information, very colorful, 179 00:09:12,960 --> 00:09:14,376 mind-blowing. 180 00:09:14,400 --> 00:09:17,136 Watched it and then a shop assistant came online 181 00:09:17,160 --> 00:09:20,216 and asked me, "How can I help you tonight?" 182 00:09:20,240 --> 00:09:22,416 Of course I bought that pack of snack. 183 00:09:22,440 --> 00:09:26,496 What is more beautiful is I know that the next day, around noontime, 184 00:09:26,520 --> 00:09:29,376 that pack of snack will be delivered to my office. 185 00:09:29,400 --> 00:09:32,016 I can eat it and share it with my colleagues 186 00:09:32,040 --> 00:09:34,920 and the cost of delivery, maximum one dollar. 187 00:09:36,240 --> 00:09:39,176 Just when I was about to leave that shopping site, 188 00:09:39,200 --> 00:09:41,056 another screen popped up. 189 00:09:41,080 --> 00:09:45,736 This time it is the livestreaming of a grassroots celebrity 190 00:09:45,760 --> 00:09:49,016 teaching me how to wear a new color of lipstick. 191 00:09:49,040 --> 00:09:52,136 I watched for 30 seconds -- very easy to understand -- 192 00:09:52,160 --> 00:09:55,216 and also there is a shopping link right next to it, 193 00:09:55,240 --> 00:09:57,880 clicked it, bought it in a few seconds. 194 00:09:58,600 --> 00:10:00,096 Back to the chatroom. 195 00:10:00,120 --> 00:10:01,976 The gossiping is still going on. 196 00:10:02,000 --> 00:10:04,856 Another friend of mine posted the QR code 197 00:10:04,880 --> 00:10:06,536 of another pack of snack. 198 00:10:06,560 --> 00:10:08,080 Clicked it, bought it. 199 00:10:09,080 --> 00:10:10,656 So the whole experience 200 00:10:10,680 --> 00:10:14,456 is like you're exploring in an amusement park. 201 00:10:14,480 --> 00:10:17,096 It is chaotic, it is fun 202 00:10:17,120 --> 00:10:19,520 and it's even a little bit addictive. 203 00:10:20,520 --> 00:10:24,936 This is what's happening when you have this integrated ecosystem. 204 00:10:24,960 --> 00:10:27,656 Shopping is embedded in social, 205 00:10:27,680 --> 00:10:32,376 and social is evolving into a multidimensional experience. 206 00:10:32,400 --> 00:10:36,096 The integration of ecosystems reaches a whole new level. 207 00:10:36,120 --> 00:10:39,440 So does its dominance in all aspects of our life. 208 00:10:40,720 --> 00:10:44,336 And of course, there are huge commercial opportunities behind it. 209 00:10:44,360 --> 00:10:47,176 A Chinese snack company, Three Squirrels, 210 00:10:47,200 --> 00:10:50,976 built a half-a-billion-dollar business in just three years 211 00:10:51,000 --> 00:10:54,816 by investing in 300 to 500 shop assistants 212 00:10:54,840 --> 00:10:58,976 who are going to be online to provide services 24/7. 213 00:10:59,000 --> 00:11:01,016 In the social media environment, 214 00:11:01,040 --> 00:11:02,976 they are like your neighborhood friends. 215 00:11:03,000 --> 00:11:04,696 Even when you are not buying stuff, 216 00:11:04,720 --> 00:11:08,120 they will be happy to just tell you a few jokes and make you happy. 217 00:11:09,000 --> 00:11:11,096 In this integrated ecosystem, 218 00:11:11,120 --> 00:11:15,576 social media can really redefine the relationship between brand, 219 00:11:15,600 --> 00:11:17,600 retailer and consumer. 220 00:11:19,440 --> 00:11:22,896 These are only fragments of the massive changes 221 00:11:22,920 --> 00:11:24,616 I have seen in China. 222 00:11:24,640 --> 00:11:26,616 In this huge laboratory, 223 00:11:26,640 --> 00:11:30,320 a lot of experiments are generated every single day. 224 00:11:31,040 --> 00:11:33,536 The ecosystems are reforming, 225 00:11:33,560 --> 00:11:37,736 supply chain distribution, marketing, product innovation, 226 00:11:37,760 --> 00:11:38,976 everything. 227 00:11:39,000 --> 00:11:43,256 Consumers are getting the power to decide what they want to buy, 228 00:11:43,280 --> 00:11:44,576 when they want to buy it, 229 00:11:44,600 --> 00:11:47,616 how they want to buy it, how they want to social. 230 00:11:47,640 --> 00:11:51,056 It is now back to business leaders of the world 231 00:11:51,080 --> 00:11:54,416 to really open their eyes, see what's happening in China, 232 00:11:54,440 --> 00:11:57,440 think about it and take actions. 233 00:11:58,320 --> 00:11:59,536 Thank you. 234 00:11:59,560 --> 00:12:02,360 (Applause) 235 00:12:07,760 --> 00:12:10,240 Massimo Portincaso: Angela, what you shared with us 236 00:12:10,260 --> 00:12:12,380 is truly impressive and almost incredible, 237 00:12:12,400 --> 00:12:17,656 but I think many in the audience had the same question that I had, 238 00:12:17,680 --> 00:12:18,896 which is: 239 00:12:18,920 --> 00:12:22,256 Is this kind of impulsive consumption 240 00:12:22,280 --> 00:12:26,496 both economically and environmentally sustainable over the longer term? 241 00:12:26,520 --> 00:12:30,256 And what is the total price to be paid 242 00:12:30,280 --> 00:12:34,976 for such an automized and ultraconvenient retail experience? 243 00:12:35,000 --> 00:12:37,896 Angela Wang: Yeah. One thing we have to keep in mind 244 00:12:37,920 --> 00:12:41,640 is really, we are at the very beginning of a huge transformation. 245 00:12:42,200 --> 00:12:45,336 So with this trading up needs of the consumer, 246 00:12:45,360 --> 00:12:48,496 together with the evolution of the ecosystem, 247 00:12:48,520 --> 00:12:52,296 there are a lot of opportunities and also challenges. 248 00:12:52,320 --> 00:12:53,896 So I've seen some early signs 249 00:12:53,920 --> 00:12:56,776 that the ecosystems are shifting their focus 250 00:12:56,800 --> 00:12:59,376 to pay attention to solve these challenges. 251 00:12:59,400 --> 00:13:03,656 For example, paying more consideration to sustainability 252 00:13:03,680 --> 00:13:05,616 alongside just about speed, 253 00:13:05,640 --> 00:13:08,496 and also quality over quantity. 254 00:13:08,520 --> 00:13:11,456 But there are really no simple answers to these questions. 255 00:13:11,480 --> 00:13:14,096 That is exactly why I'm here to tell everyone 256 00:13:14,120 --> 00:13:19,000 that we need to watch it, study it, and play a part in this evolution. 257 00:13:19,680 --> 00:13:21,216 MP: Thank you very much. 258 00:13:21,240 --> 00:13:22,456 AW: Thank you. 259 00:13:22,480 --> 00:13:25,120 (Applause)