New Silk Road has global retailers revving up for action
Updated: 2015-06-12 07:28
By Emma Dai in Hong Kong(HK Edition)
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Corporate heads, academics hail trade initiative's potential at China Daily co-branded session of Omni Channel gathering of the continent's retail luminaries
The Chinese mainland's "New Silk Road" initiative is poised to boost the development of retail business in the region and the key to success is to be adaptive, innovative and add value to the product range.
That is according to a panel of leading retailers and scholars who came together for China Daily's co-branded session at the Omni Channel Retailing Conference in Hong Kong.
"Asia's retail industry is to benefit tremendously as China revitalizes the centuries-old Silk Road trading route. Various trades may find their niche from the rich cultural and social environments in the region, as well as cash in on the spending power of Asian countries," Zhou Li, publisher and editor-in-chief of China Daily Asia Pacific, said in his welcome address to the co-branded session at the Hong Kong Convention and Exhibition Centre on Wednesday.
Held alongside Retail Asia Expo, the Omni Channel Retailing Conference is a platform for industry leaders to share new strategies and solutions to manage evolving technologies, social media trends and changing consumer expectations in Asia Pacific markets.
"Ultimately with the New Silk Road, retailers will have access to 4.4 billion people in one big marketplace, where people, capital, goods, knowledge can flow freely. It would be a great stimulus for all the participants," said Jeroen de Groot, managing director of Metro Jinjiang Cash & Carry Co Ltd.
"One of the gold mines in Asia is e-commerce, which is twice the size of the US online retailing market," noted Dou Wenyu, associate dean of the College of Business at City University of Hong Kong.
However, Dou also pointed out that Chinese e-retailers, no matter how successful at home, have never won any major battle in overseas markets. "To replicate their domestic glory, they have to adopt the right strategy," he said.
Dou emphasized that "retailers should look at Asia not only as a single homogeneous continent, but as a diverse collection of national markets." He added that the business environment in Asia varies from country to country, and each market is different in terms of culture, language, economic system and infrastructure, all key elements that determine business success. "To be truly successful, retailers have to drive localization to the deepest level, go to the cultural roots of the customers in each market, understand their behaviors thoroughly and find the 'touch points'," he advised.
"It might take a few years for the New Silk Road to bear fruit. But retailers need to look into the growing force of the new generation of consumers, who are much more comfortable with social media and the Internet," Dou added.
"The incremental exposure to different cultures and products will reshape consumer behavior and thus, in turn, reshape retailers' market strategies as well."
Changing shapes
And the reshaping of retailers is already unfolding. De Groot told the audience that it is now a trend to build up a brand on the Chinese mainland with physical as well as online presence.
"As a traditional retailer, we have to think outside traditional boundaries. The Internet giants are competitors as well as partners," said de Groot. Metro Jinjiang Cash & Carry, a supermarket operator, has opened an online platform on Tmall, Alibaba's B2C (business-to-consumer) shopping site.
"We have been using big data to reach our customers. Compared with online retailers, the trust consumers have in us is our biggest advantage," he added.
Meanwhile, Yu Fuping, deputy general manager of Joy City Property Ltd, a leading Chinese shopping mall developer and operator, believes that innovation is critical for every brick-and-mortar retailer today.
He added that Joy City has been pursuing interaction between its traditional retail spaces and e-commerce, in order to strengthen the shopping experience and raise management efficiency.
"Through our partnerships with Alibaba and Tencent, consumers can shop in our malls online. They can book parking space and reserve restaurant seats through (messaging app) WeChat. During various online shopping festivals such as the Nov 11 'Singles' Day', we secured up to 30 percent on-year revenue growth last year," Yu told the audience.
Online-offline synergy
While some retailers have benefited from their efforts to draw consumers online, others said on-site experience and value-added services are key ingredients for their success.
"Operating as a dealer, our business is no longer just about products any more. It's about the overall consumer experience - no matter whether in the showroom or during after-sales services," said Bianca Wong, human resources and corporate communications director at Jebsen Group, a Hong Kong-based company with 120 years of history in the region.
"In terms of functionality of products, competition is fierce. But what we are selling are the technology and lifestyle. We look into what our customers want and adapt to change. We bring products relevant to our customers and enrich their lifestyles. The way we differentiate from others has to be through the customer relationship and experience," she added.
And Lars Hardboe Galsgaard, managing director for Greater China and South Korea at Bang & Olufsen, a high-end audio-video products manufacturer, had this to say:"China's transformation into a domestic consumption-driven economy is a good opportunity for us. Apart from offering great products, we believe customer service is critical."
"We are turning our stores into domestic showrooms, as fantastic products need to be shown in an equally fantastic environment," Galsgaard said, adding the Danish brand has expanded significantly in the past few years to boost physical presence in the regional market. "Beyond shop floors, we add value to customers through a variety of services, such as offering home visits, engaging with customer-appointed designers and customized installations."
emmadai@chinadailyhk.com
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Zhou Li (center), publisher and editor-in-chief of China Daily Asia Pacific, and speakers at the China Daily co-branded session at the Omni Channel Retailing Conference give the thumbs-up to new opportunities of retail business brought by the Chinese mainland's "New Silk Road" initiative. Parker Zheng / China Daily |
(HK Edition 06/12/2015 page10)