How China is changing the future of shopping
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0:01 - 0:03This is my nephew,
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0:03 - 0:05Yuan Yuan.
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0:05 - 0:06He's five years old,
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0:06 - 0:07super adorable.
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0:08 - 0:10I asked him the other day,
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0:10 - 0:13"What would you like
for your birthday this year?" -
0:13 - 0:17He said, "I want to have
a one-way mirror Spider-Man mask." -
0:18 - 0:21I had absolutely no idea
what he was talking about, -
0:21 - 0:23so I said, "Wow, that's really cool,
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0:23 - 0:24but how are you going to get it?"
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0:25 - 0:28He told me, without a blink of his eyes,
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0:28 - 0:32"I'm going to tell my mom
and make a wish before I go to bed. -
0:33 - 0:35My mom will go to shake her mobile phone.
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0:35 - 0:40The next morning, the delivery uncle
will give it to me when I wake up." -
0:41 - 0:43I was about to tease him,
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0:43 - 0:45but suddenly I realized
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0:45 - 0:47he was simply telling me the truth,
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0:47 - 0:52the truth of what shopping
looks like for this generation. -
0:52 - 0:55If you think of it,
for a child like Yuan Yuan, -
0:55 - 0:58shopping is a very different idea
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0:58 - 1:00compared to what
my generation had in mind. -
1:01 - 1:03Shopping is always done on mobile,
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1:03 - 1:05and payment is all virtual.
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1:06 - 1:10A huge shopping revolution
is happening in China right now. -
1:11 - 1:15Shopping behaviors,
and also technology platforms, -
1:15 - 1:18have evolved differently
than elsewhere in the world. -
1:18 - 1:22For instance, e-commerce
in China is soaring. -
1:22 - 1:25It's been growing at twice the speed
of the United States -
1:25 - 1:27and a lot of the growth
is coming from mobile. -
1:28 - 1:33Every month, 500 million consumers
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1:33 - 1:35are buying on mobile phones,
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1:35 - 1:37and to put that into context,
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1:37 - 1:40that is a total population
of the United States, -
1:40 - 1:42UK and Germany combined.
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1:43 - 1:47But it is not just about
the scale of the e-commerce, -
1:47 - 1:51it is the speed of adoption
and the aggregation of the ecosystems. -
1:52 - 1:56It took China less than five years
to become a country of mobile commerce, -
1:56 - 2:01and that is largely because
of the two technology platforms, -
2:01 - 2:03Alibaba and Tencent.
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2:03 - 2:07They own 90 percent of the e-commerce --
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2:07 - 2:08pretty much the whole market --
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2:08 - 2:1185 percent of social media,
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2:11 - 2:1485 percent of internet payment.
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2:14 - 2:20And they also own large volumes
of digital content, video, online movie, -
2:20 - 2:24literature, travel information, gaming.
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2:25 - 2:28When this huge base of mobile shoppers
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2:28 - 2:31meets with aggregated ecosystems,
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2:31 - 2:33chemical reactions happen.
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2:33 - 2:35Today, China is like a huge laboratory
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2:35 - 2:38generating all sorts of experiments.
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2:38 - 2:40You should come to China,
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2:40 - 2:43because here you will get
a glimpse into the future. -
2:45 - 2:49One of the trends I have seen
concerns the spontaneity of shopping. -
2:49 - 2:51Five years ago, in a fashion study,
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2:52 - 2:53we found that on average,
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2:53 - 2:57a Chinese consumer would be buying
five to eight pairs of shoes. -
2:57 - 3:01This number tripled
to reach about 25 pairs of shoes a year. -
3:01 - 3:04Who would need so many pairs of shoes?
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3:05 - 3:08So I asked them,
"What are the reasons you buy?" -
3:08 - 3:10They told me a list of inspirations:
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3:10 - 3:15blogs, celebrity news,
fashion information. -
3:15 - 3:18But really, for many of them,
there was no particular reason to buy. -
3:19 - 3:21They were just browsing
on their mobile site -
3:21 - 3:23and then buying whatever they saw.
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3:25 - 3:29We have observed the same level
of spontaneity in everything, -
3:29 - 3:33from grocery shopping
to buying insurance products. -
3:34 - 3:38But it is not very difficult
to understand if you think about it. -
3:38 - 3:41A lot of the Chinese consumers
are still very new -
3:41 - 3:44in their middle-class
or upper-middle-class lifestyles, -
3:44 - 3:47with a strong desire
to buy everything new, -
3:47 - 3:49new products, new services.
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3:49 - 3:52And with this integrated ecosystem,
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3:52 - 3:56it is so easy for them to buy,
one click after another. -
3:58 - 4:02However, this new shopping behavior
is creating a lot of challenges -
4:02 - 4:05for those once-dominant businesses.
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4:05 - 4:09The owner of a fashion company
told me that he's so frustrated -
4:09 - 4:13because his customers keep complaining
that his products are not new enough. -
4:13 - 4:16Well, for a fashion company,
really bad comment. -
4:18 - 4:21And he already increased the number
of products in each collection. -
4:21 - 4:22It doesn't seem to work.
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4:23 - 4:26So I told him there's something
more important than that. -
4:26 - 4:30You've got to give your consumer
exactly what they want -
4:30 - 4:31when they still want it.
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4:32 - 4:36And he can learn something
from the online apparel players in China. -
4:36 - 4:40These companies, they collect
real consumer feedback -
4:40 - 4:42from mobile sites, from social media,
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4:42 - 4:45and then their designers
will translate this information -
4:45 - 4:47into product ideas,
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4:47 - 4:51and then send them
to microstudios for production. -
4:51 - 4:55These microstudios are really key
in this overall ecosystem, -
4:55 - 4:57because they take small orders,
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4:57 - 4:5930 garments at a time,
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4:59 - 5:03and they can also make
partially customized pieces. -
5:04 - 5:07The fact that all these production designs
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5:07 - 5:08are done locally,
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5:08 - 5:13the whole process, from transporting
to product on shelf or online -
5:13 - 5:16sometimes takes only three to four days.
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5:16 - 5:17That is super fast,
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5:17 - 5:21and that is highly responsive
to what is in and hot on the market. -
5:21 - 5:25And that is giving enormous headaches
to traditional retailers -
5:25 - 5:28who are only thinking
about a few collections a year. -
5:30 - 5:34Then there's a consumer's need
for ultraconvenience. -
5:34 - 5:37A couple of months ago,
I was shopping with a friend in Tokyo. -
5:37 - 5:39We were in the store,
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5:39 - 5:42and there were three to four people
standing in front of us -
5:42 - 5:43at the checkout counter.
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5:43 - 5:45Pretty normal, right?
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5:45 - 5:47But both of us dropped our selection
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5:47 - 5:49and walked away.
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5:49 - 5:52This is how impatient we have become.
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5:53 - 5:56Delivering ultraconvenience
is not just something nice to have. -
5:56 - 6:00It is crucial to make sure
your consumer actually buys. -
6:00 - 6:03And in China, we have learned
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6:03 - 6:07that convenience is really the glue
that will make online shopping -
6:07 - 6:10a behavior and a habit that sticks.
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6:10 - 6:13It is sometimes more effective
than a loyalty program alone. -
6:13 - 6:15Take Hema.
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6:15 - 6:19It's a retail grocery concept
developed by Alibaba. -
6:20 - 6:22They deliver a full basket of products
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6:22 - 6:25from 4,000 SKUs to your doorstep
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6:25 - 6:27within 30 minutes.
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6:27 - 6:31What is amazing is that they deliver
literally everything: -
6:31 - 6:33fruits, vegetables, of course.
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6:33 - 6:35They also deliver live fish
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6:35 - 6:38and also live Alaska king crab.
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6:39 - 6:41Like my friend once told me,
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6:41 - 6:43"It's really my dream coming true.
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6:43 - 6:46Finally, I can impress my mother-in-law
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6:46 - 6:49when she comes to visit me
for dinner unexpectedly." -
6:49 - 6:52(Laughter)
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6:52 - 6:55Well, companies
like Amazon and FreshDirect -
6:55 - 6:58are also experimenting in the same field.
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6:58 - 7:01The fact that Hema
is part of the Alibaba ecosystem -
7:01 - 7:05makes it faster and also
a bit easier to implement. -
7:06 - 7:08For an online grocery player,
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7:08 - 7:10it is very difficult, very costly,
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7:11 - 7:13to deliver a full basket quickly,
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7:13 - 7:16but for Hema, it's got a mobile app,
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7:16 - 7:18it's got mobile payment,
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7:18 - 7:23and also it's built 20 physical stores
in high-density areas in Shanghai. -
7:23 - 7:27These stores are built
to ensure the freshness of the product -- -
7:27 - 7:30they actually have
fish tanks in the store -- -
7:30 - 7:34and also to give locations
that will enable high-speed delivery. -
7:35 - 7:37I know the question you have on your mind.
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7:37 - 7:38Are they making money?
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7:38 - 7:40Yes, they are making money.
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7:40 - 7:41They are breaking even,
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7:41 - 7:44and what is also amazing
is that the sales revenue per store -
7:44 - 7:48is three to four times higher
than the traditional grocery store, -
7:49 - 7:52and half of the revenue orders
are coming from mobile. -
7:53 - 7:56This is really proof that a consumer,
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7:56 - 7:59if you give them ultraconvenience
that really works in grocery shopping, -
8:00 - 8:02they're going to switch
their shopping behaviors online, -
8:02 - 8:04like, in no time.
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8:05 - 8:09So ultraconvenience and spontaneity,
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8:09 - 8:10that's not the full story.
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8:10 - 8:13The other trend I have seen in China
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8:13 - 8:14is social shopping.
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8:14 - 8:17If you think of social shopping
elsewhere in the world, -
8:17 - 8:19it is a linear process.
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8:20 - 8:22You pick up something on Facebook,
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8:22 - 8:24watch it, and you switch to Amazon
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8:24 - 8:27or brand.com to complete
the shopping journey. -
8:27 - 8:29Clean and simple.
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8:29 - 8:32But in China it is a very different thing.
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8:32 - 8:37On average, a consumer would spend
one hour on their mobile phone shopping. -
8:37 - 8:39That's three times higher
than the United States. -
8:39 - 8:41Where does the stickiness come from?
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8:41 - 8:45What are they actually doing
on this tiny little screen? -
8:45 - 8:48So let me take you
on a mobile shopping journey -
8:48 - 8:50that I usually would be experiencing.
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8:51 - 8:5411pm, yes, that's usually when I shop.
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8:55 - 8:58I was having a chat in a WeChat
chatroom with my friends. -
8:58 - 9:01One of them took out a pack of snack
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9:01 - 9:04and posted the product link
in that chatroom. -
9:04 - 9:08I hate it, because usually
I would just click that link -
9:08 - 9:11and then land on the product page.
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9:11 - 9:13Lots of information, very colorful,
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9:13 - 9:14mind-blowing.
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9:14 - 9:17Watched it and then
a shop assistant came online -
9:17 - 9:20and asked me, "How can I
help you tonight?" -
9:20 - 9:22Of course I bought that pack of snack.
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9:22 - 9:26What is more beautiful is I know
that the next day, around noontime, -
9:27 - 9:29that pack of snack
will be delivered to my office. -
9:29 - 9:32I can eat it and share it
with my colleagues -
9:32 - 9:35and the cost of delivery,
maximum one dollar. -
9:36 - 9:39Just when I was about to leave
that shopping site, -
9:39 - 9:41another screen popped up.
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9:41 - 9:46This time it is the livestreaming
of a grassroots celebrity -
9:46 - 9:49teaching me how to wear
a new color of lipstick. -
9:49 - 9:52I watched for 30 seconds --
very easy to understand -- -
9:52 - 9:55and also there is
a shopping link right next to it, -
9:55 - 9:58clicked it, bought it in a few seconds.
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9:59 - 10:00Back to the chatroom.
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10:00 - 10:02The gossiping is still going on.
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10:02 - 10:05Another friend of mine posted the QR code
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10:05 - 10:07of another pack of snack.
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10:07 - 10:08Clicked it, bought it.
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10:09 - 10:11So the whole experience
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10:11 - 10:14is like you're exploring
in an amusement park. -
10:14 - 10:17It is chaotic, it is fun
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10:17 - 10:20and it's even a little bit addictive.
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10:21 - 10:25This is what's happening
when you have this integrated ecosystem. -
10:25 - 10:28Shopping is embedded in social,
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10:28 - 10:32and social is evolving
into a multidimensional experience. -
10:32 - 10:36The integration of ecosystems
reaches a whole new level. -
10:36 - 10:39So does its dominance
in all aspects of our life. -
10:41 - 10:44And of course, there are huge
commercial opportunities behind it. -
10:44 - 10:47A Chinese snack company, Three Squirrels,
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10:47 - 10:51built a half-a-billion-dollar business
in just three years -
10:51 - 10:55by investing in 300 to 500 shop assistants
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10:55 - 10:59who are going to be online
to provide services 24/7. -
10:59 - 11:01In the social media environment,
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11:01 - 11:03they are like your neighborhood friends.
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11:03 - 11:05Even when you are not buying stuff,
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11:05 - 11:08they will be happy to just tell you
a few jokes and make you happy. -
11:09 - 11:11In this integrated ecosystem,
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11:11 - 11:16social media can really redefine
the relationship between brand, -
11:16 - 11:18retailer and consumer.
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11:19 - 11:23These are only fragments
of the massive changes -
11:23 - 11:25I have seen in China.
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11:25 - 11:27In this huge laboratory,
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11:27 - 11:30a lot of experiments
are generated every single day. -
11:31 - 11:34The ecosystems are reforming,
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11:34 - 11:38supply chain distribution,
marketing, product innovation, -
11:38 - 11:39everything.
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11:39 - 11:43Consumers are getting the power
to decide what they want to buy, -
11:43 - 11:45when they want to buy it,
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11:45 - 11:48how they want to buy it,
how they want to social. -
11:48 - 11:51It is now back to business
leaders of the world -
11:51 - 11:54to really open their eyes,
see what's happening in China, -
11:54 - 11:57think about it and take actions.
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11:58 - 12:00Thank you.
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12:00 - 12:02(Applause)
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12:08 - 12:10Massimo Portincaso: Angela,
what you shared with us -
12:10 - 12:12is truly impressive and almost incredible,
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12:12 - 12:18but I think many in the audience
had the same question that I had, -
12:18 - 12:19which is:
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12:19 - 12:22Is this kind of impulsive consumption
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12:22 - 12:26both economically and environmentally
sustainable over the longer term? -
12:27 - 12:30And what is the total price to be paid
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12:30 - 12:35for such an automized
and ultraconvenient retail experience? -
12:35 - 12:38Angela Wang: Yeah.
One thing we have to keep in mind -
12:38 - 12:42is really, we are at the very beginning
of a huge transformation. -
12:42 - 12:45So with this trading up
needs of the consumer, -
12:45 - 12:48together with the evolution
of the ecosystem, -
12:49 - 12:52there are a lot of opportunities
and also challenges. -
12:52 - 12:54So I've seen some early signs
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12:54 - 12:57that the ecosystems
are shifting their focus -
12:57 - 12:59to pay attention
to solve these challenges. -
12:59 - 13:04For example, paying more
consideration to sustainability -
13:04 - 13:06alongside just about speed,
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13:06 - 13:08and also quality over quantity.
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13:09 - 13:11But there are really
no simple answers to these questions. -
13:11 - 13:14That is exactly why
I'm here to tell everyone -
13:14 - 13:19that we need to watch it, study it,
and play a part in this evolution. -
13:20 - 13:21MP: Thank you very much.
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13:21 - 13:22AW: Thank you.
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13:22 - 13:25(Applause)
- Title:
- How China is changing the future of shopping
- Speaker:
- Angela Wang
- Description:
-
China is a huge laboratory of innovation, says retail expert Angela Wang, and in this lab, everything takes place on people's phones. Five hundred million Chinese consumers -- the equivalent of the combined populations of the US, UK and Germany -- regularly make purchases via mobile platforms, even in brick-and-mortar stores. What will this transformation mean for the future of shopping? Learn more about the new business-as-usual, where everything is ultra-convenient, ultra-flexible and ultra-social.
- Video Language:
- English
- Team:
- closed TED
- Project:
- TEDTalks
- Duration:
- 13:38
Brian Greene edited English subtitles for How China is changing the future of shopping | ||
Brian Greene edited English subtitles for How China is changing the future of shopping | ||
Brian Greene approved English subtitles for How China is changing the future of shopping | ||
Brian Greene edited English subtitles for How China is changing the future of shopping | ||
Brian Greene edited English subtitles for How China is changing the future of shopping | ||
Joanna Pietrulewicz accepted English subtitles for How China is changing the future of shopping | ||
Joanna Pietrulewicz edited English subtitles for How China is changing the future of shopping | ||
Joanna Pietrulewicz edited English subtitles for How China is changing the future of shopping |