Terry von Bibra en el IV Congreso DEC

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Ponencia de Terry von Bibra, General Manager Europe en Alibaba Group, durante el IV Congreso Internacional sobre Experiencia de Cliente celebrado el 3 de octubre de 2017 en Madrid.

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  • You might be more or less familiar with Alibaba Group, and if not, let me outline some key figures for you.
  • Our mission: To Make It Easy To Do Business Anywhere (Video - 45 seconds)
  • Alibaba is much more than an e-commerce company, but a full-fledged technology company—one with a complex digital ecosystem of new, mature and interconnected businesses, as well as initiatives into cloud computing, artificial intelligence and other cutting-edge technologies.

    We are now moving to new areas like digital entertainment. Together with all the partners, all the participants in the ecosystem—buyers, sellers, service providers, content providers—today, altogether, we actually constitute a real economy.

    Let me give you a quick overview.
  • Our mission is very simple, yet ambitious: “To make it easy to do business anywhere”
  • China is changing, and so do Chinese consumers.

    The rise of the internet caused a shift in the way Chinese consumers purchase:
    Internet penetration China 1999 – 0.7% (Source: World Bank - https://www.google.co.uk/publicdata/explore?ds=d5bncppjof8f9_&met_y=it_net_user_p2&idim=country:CHN:USA:IND&hl=en&dl=en)
    Internet penetration today – 53.1% (Source: China Internet Network Information Center)

    But, this has barely started: the total number of internet users represents little more than half of China’s population of over 1.3 billion compared with the UK where there were 60m internet users in 2016 (a 92% penetration)

    Mobile has exploded in China and many consumers go straight to the smartphone never engaging directly with a website:

    Chinese consumers will spend on average, at least 2 hours per day on their smartphones (https://www.marketingweek.com/2017/01/31/china-mobile-commerce/)
    695 million of those users, 95.1%, accessed the internet on a mobile device. In the US, there are 225m (Statista)

    Europe vs China:
    China: 102 cities above 1 million people (https://www.theguardian.com/cities/2017/mar/20/china-100-cities-populations-bigger-Liverpool)
    Europe: 18 cities above 1 million people (https://en.wikipedia.org/wiki/List_of_cities_in_the_European_Union_by_population_within_city_limits)

    While e-commerce sales represent around 7% of overall retail in the western world, that number is more than double (15%) in China and only HALF of the population is online so really, it’s 30% or 4X what it is here.

    Internet users in China: China Internet Network Information Center 39th “China Internet Development Statistics Report”
    Population of Europe: Worldometers (http://www.worldometers.info/world-population/europe-population/)
    Population of US: Worldometers (http://www.worldometers.info/world-population/us-population/)
  • The incredible transformation of the Chinese consumer
    It’s not just infrastructure that’s changing – these are Chinese consumers in the 1970s

    RIGHT HAND SIDE: Baochu Pagoda and surrounding landscape, Hangzhou

  • Fast-forward 25 years - this is the present

    So where to now? How does the Chinese consumer experience impact Europe?

    The Chinese consumer went from having no variety to having everything at once. E.g. Alipay has been so successful because there were no other options, whereas in Europe we have a number of different payment options available.

    As a result, Chinese consumers are the most sophisticated consumer group in the world demanding innovation and new technology from retailers.

    RIGHT HAND SIDE: Hangzhou downtown
  • The Human Brain & Omnichannel Retail: Two Continuums
    Can AI design a brain that truly replicates our own human’s organ?  In my view the answer is “no”: the continuum connecting our minds and our bodies and how each influence the other, makes this impossible.

    Will online shopping replace the world of offline retail? No, as the two also represent a continuum which has quickly made each inseparable from the other.

    In my talk I will explore both of these continuums and the parallels between them when it comes to understanding how we think, experience, and yes, shop.
  • Perception v reality
  • Hawkers is a Spanish brand that sells sunglasses exclusively via the Internet. Hawkers was founded in December of 2013 in Elche (Valencia) and it is part of the Saldum Ventures group.

    LEFT HAND SIDE = Hawkers’ Western website (10 pages)
    RIGHT HAND SIDE = Tmall (13 pages)

    Main differentiators
    Hawkers’ Tmall store not only showcases products, but features relevant content that can make the difference for shoppers, such as the sunglasses lines exclusively designed in collaboration with Barcelona footballer Lionel Messi and international DJ and producer Steve Aoki. The look and feel of the Tmall store is definitely richer and more crowded, which also reflects in the usage of photos and female/male models adding a glamorous and “human” touch to the page.

    On the other side, Hawkers’ official website is very linear and dry, and simply features products and prices. Instead of looking to catch the emotional side of consumers, it adopts a pragmatic and functional approach.
  • Dyson is a British technology company established by James Dyson in 1987. It designs and manufactures household appliances such as vacuum cleaners, hand dryers, bladeless fans, heaters and hair dryers.

    LEFT HAND SIDE = Dyson Western website (6 pages)
    RIGHT HAND SIDE = Tmall (20 pages)

    Main differentiators
    Dyson’s store on Tmall is a great example of how an electronics brand can touch all the right chords and build a great relationship with consumers, going beyond the simple sales channel. Dyson has incorporated a vast range of diverse content, from innovative features of the product (hairdryer), suggestions from professional hair stylists on how to use it to obtain the best result, information on the hair structure and how to take care of it. This offers shoppers a comprehensive, relevant experience.

    On the other side, Dyson UK website is very plain and short, and only showcases some main information in the homepage.
  • Ocean Spray is a North American agricultural cooperative of growers of cranberries and grapefruit headquartered in Lakeville/Middleborough, Massachusetts. It was formed in 1930 by three cranberry growers with a simple love of cranberries, and currently has over 700 member growers. Their offering includes juices and drinks, sauces, cordials, dry-fruit snacks.

    LEFT HAND SIDE = Ocean Spray Western website (4 pages)
    RIGHT HAND SIDE = Tmall (13 pages)

    Main differentiators
    The length of the webpage is only one of the elements that differentiates Ocean Spray presence on Tmall vs official website. The Tmall store features various content including recipes and consumption suggestions. Moreover, it presents the story of the growers and their families behind the brand, helping to create an emotional connection and supporting the storytelling beyond the product itself. Chinese consumers are increasingly more sophisticated and opinionated in their purchases, in particular when it’s about food products for their families and themselves. In this case, the guaranteed quality is also validated by showing the real faces of the people cultivating such produce.
  • From left to right:

    MARTIDERM (Cosmetics)
    DESIGUAL (Fashion)
    SESDERMA (Cosmetics)
    CORREOS (Spanish Post Office) – includes among others wineries, supplement brands, olive oil
    ISDIN (Cosmetics)
  • Is the physical store dead? Many of the predictions indicate this. However, Spain presents a peculiar situation:

    A recent report by GFK “European Retail in 2017” estimates that physical retail in Spain will grow by 2.9% in 2017 (above the EU average of 1.4%).
    At the same time, Spain ranks 4th among the European countries with the highest online retail spending. Analysis made by ICEMD (Instituto de Economía Digital), the trade magazine D/A Retail and Adigital (Asociación Española de la Economía Digital), say that e-Commerce in Spain could reach a growth of up to 30% in 2017.

    Spain is a great example of how the physical retail is not dead. It is however changing and the role of the physical store will be different in the future.

    What can the Chinese consumer tell us about the future of the physical store?
  • E-commerce in China only counts for 15% of the retail landscape, 85% of retail is still offline, demonstrating there is an even larger opportunity for retailers in the offline space (http://www.alizila.com/joe-tsai-alibaba-economy-new-retail/)
    Regardless, the role the smartphone plays in the Chinese experience has become crucial - the Chinese consumer does not distinguish between a physical location and their smart phone – they always have their smart phones in their hands, wherever they are – malls, home, public transport, instore:
    70% look up a product on their smartphone or tablet while in a physical shop, further underpinning the convergence of the online and offline world
    Two-thirds went online to search for reviews and recommendations when researching products, compared with 50% in Austria (Source: Marketagent Umfrage, Auftraggeber: Handelsverband, Post und Google)
    The number of consumers who bought a product after seeing it in an online shop increased from 19% in 2015, to 43% in 2016. Similarly, 31% of consumers were triggered by something they saw in a physical shop in 2016, up from 24% in 2015.
    In response to this, Alibaba has adopted a ‘New Retail’ strategy. This is one of the ‘5 News’ – a new model of online and offline (the other ‘News’ are New Manufacturing, New Energy, New Technology, New Finance)
    Our New Retail strategy anticipates and catalyses changes in consumer behaviour, where the time, place and method of purchase and consumption will be different from what we were used to before.
    Retail is no longer about a single format, or sector, it is about consumers seeking different formats - driven by consumer-specific need at that moment.
    Consumers no longer make any distinction between online and offline, they expect to be able to purchase what they want, when they want and how they want. In this new world of consumer expectations, the distinction between online and offline will disappear.
    We’ll explore how Alibaba is entering the online and offline experience.
  • Electronic Store: Suning

    In August 2015, Alibaba announced an investment of US$4.63bn for a 19.99% stake in Suning.

    The strategic collaboration between Alibaba and Suning marks a milestone that signals the further integration of digital and offline retail
    Suning will open a flagship store on Alibaba’s Tmall.com platform, focusing on consumer electronics, home appliances and baby products.

    This collaboration highlight’s how Alibaba Group’s unrivaled leadership in mobile commerce and payments makes it possible for offline retailers to have an aggressive and successful omni-channel strategy.

  • Intime
    Department stores have struggled in past years to cope as Chinese consumers frustrated with lacklustre, poorly managed shopping malls migrate to online bazaars. Unlike in the U.S., which is dominated by a clutch of mega-chains, the Chinese retail experience is far more fragmented and inconsistent.
    Intime, one of the better-known players, operated and managed just 29 department stores and 17 shopping malls across the country.
    Alibaba currently owns 28 percent of Intime following an initial investment in the retailer in 2014. If shareholders approve the deal, Alibaba would become the controlling shareholder of Intime with an expected stake of approximately 74 percent.
  • PLACEHOLDER – Hometime
  • Rural Taobao

    Alibaba Group’s Rural Taobao program is helping to raise living standards in China’s countryside by providing e-commerce access to millions of the country’s poorer residents.
    More than 16,000 Taobao Rural Service Centres are already in place and in the next 3-5 years, Alibaba plans to expand the program to 100,000 villages and 1,000 rural counties, enough to cover one-sixth of all Chinese villages and one-third of all counties.
  • Placeholder – Hema storefront
  • Hema app
  • Hema

    One shopping experience that is very important to Chinese consumers is the ability to pick out their own selection when buying fresh seafood. If we were a typical online company, we would go off and try to build some kind of online application in our app to best mimic this experience, with live cam, etc. But this is the whole idea of New Retail: there are certain parts of the consumer experience that are not only better done offline, but also more easily – so this is a good example where the physical store has a specific role to play in improving a particular part of how we deliver value to our customers.
  • Hema
  • Delivery

    All options can be fresh or cooked
    Order at home and delivered at home
    Order at home, pick up in store
    Order and choose own selection in store to deliver at home
    Order, select in store and eat in or take away
    Go into store, choose yourself, have delivered to office
    Order from anywhere to have delivered anywhere
    And any mixed combination of all of the above. E.g. I’m going to eat fresh crab with friends in store but will have the rest of my groceries delivered to my home
  • Terry von Bibra en el IV Congreso DEC

    1. 1. Terry Von Bibra General Manager Europe at Alibaba Group Alibaba Group: China & the consumer quality of life transformation #CongresoDEC
    2. 2. Alibaba Group China & The Consumer Quality of Life Transformation •Terry von Bibra •General Manager Europe, Alibaba
    3. 3. Alibaba Group In Numbers US$ 547Bn annual GMV in 2017 fiscal year +10M active sellers 466M annual active consumers 55M packages every day 1Billion product and service listings
    4. 4. Our Ecosystem Core Commerce Mobile Media & Entertainment Local Services Cloud Computing OTT Tickets Logistics Payment & Financial services Marketing services Data Management Platform
    5. 5. Our Mission: “To make it easy to do business anywhere”
    6. 6. Which is equivalent to… Europe (739m) US (326m) Internet Users in China 731m
    7. 7. Chinese Consumers: 1970Hangzhou, China
    8. 8. Hangzhou, China Chinese Consumers: 2017
    9. 9. E-commerce Best Practices - HAWKERS
    10. 10. E-commerce Best Practices - DYSON
    11. 11. E-commerce Best Practices - OCEAN SPRAY
    12. 12. …and more great Spanish brands on our platforms
    13. 13. Spanish high street sales increased only by 2.5 %, whereas online sales grew by 23 % (2015 to 2016)
    14. 14. Cosmetic Store Hyper Market Baby Store Corner Shop Electronic Store Fresh Food Market Grocery Store Rural Store Shopping Mall Café
    15. 15. Electronic Store
    16. 16. Shopping Mall
    17. 17. Brand Store
    18. 18. Rural Taobao
    19. 19. Fresh Food Market - HEMA
    20. 20. Fresh Food Market - HEMA
    21. 21. Fresh Food Market - HEMA
    22. 22. Fresh Food Market - HEMA
    23. 23. Fresh Food Market - HEMA