WEBVTT

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This is my nephew,

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Yuan Yuan.

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He's five years old,

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super adorable.

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I asked him the other day,

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"What would you like
for your birthday this year?"

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He said, "I want to have
a one-way mirror Spider-Man mask."

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I had absolutely no idea
what he was talking about,

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so I said, "Wow, that's really cool,

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but how are you going to get it?"

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He told me, without a blink of his eyes,

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"I'm going to tell my mom
and make a wish before I go to bed.

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My mom will go to shake her mobile phone.

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The next morning, the delivery uncle
will give it to me when I wake up."

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I was about to tease him,

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but suddenly I realized

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he was simply telling me the truth,

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the truth of what shopping
looks like for this generation.

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If you think of it,
for a child like Yuan Yuan,

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shopping is a very different idea

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compared to what
my generation had in mind.

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Shopping is always done on mobile,

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and payment is all virtual.

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A huge shopping revolution
is happening in China right now.

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Shopping behaviors,
and also technology platforms,

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have evolved differently
than elsewhere in the world.

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For instance, e-commerce
in China is soaring.

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It's been growing at twice the speed
of the United States

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and a lot of the growth
is coming from mobile.

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Every month, 500 million consumers

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are buying on mobile phones,

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and to put that into context,

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that is a total population
of the United States,

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UK and Germany combined.

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But it is not just about
the scale of the e-commerce,

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it is the speed of adoption
and the aggregation of the ecosystems.

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It took China less than five years
to become a country of mobile commerce,

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and that is largely because
of the two technology platforms,

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Alibaba and Tencent.

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They own 90 percent of the e-commerce --

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pretty much the whole market --

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85 percent of social media,

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85 percent of internet payment.

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And they also own large volumes
of digital content, video, online movie,

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literature, travel information, gaming.

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When this huge base of mobile shoppers

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meets with aggregated ecosystems,

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chemical reactions happen.

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Today, China is like a huge laboratory

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generating all sorts of experiments.

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You should come to China,

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because here you will get
a glimpse into the future.

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One of the trends I have seen
concerns the spontaneity of shopping.

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Five years ago, in a fashion study,

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we found that on average,

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a Chinese consumer would be buying
five to eight pairs of shoes.

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This number tripled
to reach about 25 pairs of shoes a year.

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Who would need so many pairs of shoes?

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So I asked them,
"What are the reasons you buy?"

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They told me a list of inspirations:

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blogs, celebrity news,
fashion information.

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But really, for many of them,
there was no particular reason to buy.

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They were just browsing
on their mobile site

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and then buying whatever they saw.

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We have observed the same level
of spontaneity in everything,

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from grocery shopping
to buying insurance products.

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But it is not very difficult
to understand if you think about it.

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A lot of the Chinese consumers
are still very new

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in their middle-class
or upper-middle-class lifestyles,

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with a strong desire
to buy everything new,

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new products, new services.

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And with this integrated ecosystem,

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it is so easy for them to buy,
one click after another.

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However, this new shopping behavior
is creating a lot of challenges

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for those once-dominant businesses.

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The owner of a fashion company
told me that he's so frustrated

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because his customers keep complaining
that his products are not new enough.

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Well, for a fashion company,
really bad comment.

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And he already increased the number
of products in each collection.

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It doesn't seem to work.

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So I told him there's something
more important than that.

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You've got to give your consumer
exactly what they want

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when they still want it.

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And he can learn something
from the online apparel players in China.

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These companies, they collect
real consumer feedback

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from mobile sites, from social media,

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and then their designers
will translate this information

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into product ideas,

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and then send them
to microstudios for production.

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These microstudios are really key
in this overall ecosystem,

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because they take small orders,

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30 garments at a time,

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and they can also make
partially customized pieces.

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The fact that all these production designs

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are done locally,

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the whole process, from transporting
to product on shelf or online

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sometimes takes only three to four days.

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That is super fast,

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and that is highly responsive
to what is in and hot on the market.

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And that is giving enormous headaches
to traditional retailers

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who are only thinking
about a few collections a year.

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Then there's a consumer's need
for ultraconvenience.

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A couple of months ago,
I was shopping with a friend in Tokyo.

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We were in the store,

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and there were three to four people
standing in front of us

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at the checkout counter.

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Pretty normal, right?

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But both of us dropped our selection

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and walked away.

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This is how impatient we have become.

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Delivering ultraconvenience
is not just something nice to have.

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It is crucial to make sure
your consumer actually buys.

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And in China, we have learned

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that convenience is really the glue
that will make online shopping

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a behavior and a habit that sticks.

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It is sometimes more effective
than a loyalty program alone.

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Take Hema.

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It's a retail grocery concept
developed by Alibaba.

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They deliver a full basket of products

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from 4,000 SKUs to your doorstep

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within 30 minutes.

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What is amazing is that they deliver
literally everything:

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fruits, vegetables, of course.

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They also deliver live fish

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and also live Alaska king crab.

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Like my friend once told me,

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"It's really my dream coming true.

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Finally, I can impress my mother-in-law

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when she comes to visit me
for dinner unexpectedly."

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(Laughter)

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Well, companies
like Amazon and FreshDirect

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are also experimenting in the same field.

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The fact that Hema
is part of the Alibaba ecosystem

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makes it faster and also
a bit easier to implement.

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For an online grocery player,

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it is very difficult, very costly,

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to deliver a full basket quickly,

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but for Hema, it's got a mobile app,

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it's got mobile payment,

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and also it's built 20 physical stores
in high-density areas in Shanghai.

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These stores are built
to ensure the freshness of the product --

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they actually have
fish tanks in the store --

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and also to give locations
that will enable high-speed delivery.

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I know the question you have on your mind.

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Are they making money?

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Yes, they are making money.

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They are breaking even,

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and what is also amazing
is that the sales revenue per store

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is three to four times higher
than the traditional grocery store,

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and half of the revenue orders
are coming from mobile.

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This is really proof that a consumer,

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if you give them ultraconvenience
that really works in grocery shopping,

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they're going to switch
their shopping behaviors online,

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like, in no time.

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So ultraconvenience and spontaneity,

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that's not the full story.

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The other trend I have seen in China

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is social shopping.

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If you think of social shopping
elsewhere in the world,

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it is a linear process.

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You pick up something on Facebook,

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watch it, and you switch to Amazon

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or brand.com to complete
the shopping journey.

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Clean and simple.

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But in China it is a very different thing.

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On average, a consumer would spend
one hour on their mobile phone shopping.

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That's three times higher
than the United States.

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Where does the stickiness come from?

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What are they actually doing
on this tiny little screen?

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So let me take you
on a mobile shopping journey

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that I usually would be experiencing.

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11pm, yes, that's usually when I shop.

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I was having a chat in a WeChat
chatroom with my friends.

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One of them took out a pack of snack

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and posted the product link
in that chatroom.

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I hate it, because usually
I would just click that link

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and then land on the product page.

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Lots of information, very colorful,

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mind-blowing.

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Watched it and then
a shop assistant came online

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and asked me, "How can I
help you tonight?"

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Of course I bought that pack of snack.

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What is more beautiful is I know
that the next day, around noontime,

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that pack of snack
will be delivered to my office.

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I can eat it and share it
with my colleagues

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and the cost of delivery,
maximum one dollar.

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Just when I was about to leave
that shopping site,

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another screen popped up.

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This time it is the livestreaming
of a grassroots celebrity

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teaching me how to wear
a new color of lipstick.

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I watched for 30 seconds --
very easy to understand --

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and also there is
a shopping link right next to it,

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clicked it, bought it in a few seconds.

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Back to the chatroom.

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The gossiping is still going on.

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Another friend of mine posted the QR code

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of another pack of snack.

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Clicked it, bought it.

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So the whole experience

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is like you're exploring
in an amusement park.

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It is chaotic, it is fun

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and it's even a little bit addictive.

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This is what's happening
when you have this integrated ecosystem.

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Shopping is embedded in social,

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and social is evolving
into a multidimensional experience.

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The integration of ecosystems
reaches a whole new level.

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So does its dominance
in all aspects of our life.

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And of course, there are huge
commercial opportunities behind it.

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A Chinese snack company, Three Squirrels,

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built a half-a-billion-dollar business
in just three years

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by investing in 300 to 500 shop assistants

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who are going to be online
to provide services 24/7.

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In the social media environment,

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they are like your neighborhood friends.

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Even when you are not buying stuff,

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they will be happy to just tell you
a few jokes and make you happy.

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In this integrated ecosystem,

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social media can really redefine
the relationship between brand,

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retailer and consumer.

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These are only fragments
of the massive changes

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I have seen in China.

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In this huge laboratory,

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a lot of experiments
are generated every single day.

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The ecosystems are reforming,

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supply chain distribution,
marketing, product innovation,

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everything.

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Consumers are getting the power
to decide what they want to buy,

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when they want to buy it,

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how they want to buy it,
how they want to social.

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It is now back to business
leaders of the world

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to really open their eyes,
see what's happening in China,

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think about it and take actions.

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Thank you.

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(Applause)

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Massimo Portincaso: Angela, 
what you shared with us

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is truly impressive and almost incredible,

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but I think many in the audience
had the same question that I had,

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which is:

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Is this kind of impulsive consumption

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both economically and environmentally
sustainable over the longer term?

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And what is the total price to be paid

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for such an automized
and ultraconvenient retail experience?

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Angela Wang: Yeah.
One thing we have to keep in mind

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is really, we are at the very beginning
of a huge transformation.

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So with this trading up
needs of the consumer,

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together with the evolution
of the ecosystem,

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there are a lot of opportunities
and also challenges.

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So I've seen some early signs

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that the ecosystems
are shifting their focus

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to pay attention
to solve these challenges.

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For example, paying more
consideration to sustainability

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alongside just about speed,

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and also quality over quantity.

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But there are really
no simple answers to these questions.

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That is exactly why
I'm here to tell everyone

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that we need to watch it, study it,
and play a part in this evolution.

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MP: Thank you very much.

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AW: Thank you.

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(Applause)