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