Deep Dive: New Retail – The Key To Unlocking Pent-Up Chinese Consumer Demand

Executive Summary

The Fung Global Retail & Technology team attended the 5th China E-commerce and Retail Innovation Summit 2017 in Shanghai. The theme of the conference was “using big data and internet technology to explore the future of New Retail.”

• AliResearch unveiled the details of “New Retail,” which is expected to hold the solution for physical retailers and pure-play e-tailers and propel the industry’s transformation. It refers to the integration of online, offline, logistics and data across a single value chain.
• New Retail addresses the bottleneck of China’s stagnating physical retail industry, which is defined by low operational efficiency, mall supply that is below most developed markets and a supply-demand imbalance between the top-tier and the lower tier cities. China is “New Retail”-ready, given its solid digital infrastructure and digitally-literate consumer base.
• The best way for retailers to position themselves is by providing a consumer-centric, data-driven offering which is focused on content. Retailers’ value chain will need to extend upstream to product design, innovation and merchandizing to satisfy consumers’ preferences. On the other hand, retailers that are slow to adapt will be marginalized. Those undermined are likely to be: 1) traditional retail; 2) traditional manufacturing; and 3)
  pure-play e-commerce.