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How China is changing the future of shopping | Angela Wang

How China is changing the future of shopping | Angela Wang


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. I hate it, 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)

35 comments

I first watch this Ted Talk early this year and i didn´t understand the relevance of what she was saying. But later I saw a few videos about what is today AliPay (owned by Alibaba) and WeChat in China, and now i understand the big picture. Facebook, Amazon,Paypal are way behind the Chinese giants, because they are not an integrated platform. WeChat and Alibaba companies integrate social aspect, e-comerce and mobile paymants in a way that we don´t have in the west because their are all separate companies. This lead to a new way of shopping. If you want to know about the future look to China and what AliAbaba and WeChat are doing.

Unless you are in the showbiz, only stupid people will buy 25+ pairs of shoes a year! Think in the context if you got 4 people in a household….and I mean not only shoes but all the junks sold in Alibaba and the like! Alibaba etc. are actually promoting cocaine and marijuana to the people in China and the world by nourishing their "impulsive consumption" habits and stuff their houses full of garbages eventually, which in turn transfer their hard earned money to the pocket of infamous Ma Yu. Do not believe such blind China-promo BS talks without thinking!

兄弟,你这有点过时了把。这都多少年前的事了。
dude, it's so out dated. nobody talks about ecommerce anymore. it's like years ago.

I'm laughing so hard at all this people who want to scream about dystopianism. This will make everything more efficient. Not to mention all of this is concentrated in the major cities. Major cities in which use bike sharing, high speed train, and car pool. This also reduces the need for supermarkets to overstock and waste large quantities of food because no one bought them. China is the future.

I’m impressed of the changes happening to how people in China shop, but at a point of her speech, I feel that she hints something like “if you are not big enough, you are no likely to change the way people do things” when she mentioned what the giants like alibaba and tencent can and the small retailers couldn’t.

It is hilarious to find some over package, environment damage comments here.
In fact, Japan's over package issue is much worse than China.
And speak of wasting, no one can compare with the US on this planet.
Consuming behaviour is influenced also by culture.
Chinese always advocate frugality.
Most Chinese prefer saving. Highest saving rate in the world!

She didn't mention how Chinese e-commercial company monopolize internet shopping business. Also didn't mention why foreign IT company was banned such as Google, Facebook, Twitter and Line. She just boast she's country without truth. Just said without real thing.

蛤蛤蛤蛤蛤评论智商感人,卧槽你不去发展新事物怎么去解决问题,因噎废食的煞笔

The Chinese social network looks a great idea to generate a collective society of thinking which will improve the level of the whole society and lead to next level of advancement: non-gene philosophy. China is terrific in strategic thinking.
Everyone is struggle in the first level of philosophy: gene philosophy, in which our behavior are determined by our genes.

what amazes me most are all the utterly ignorant and stupid comments from yanks and others in the west. What ALL of you will and never can do is understand the CHINESE mind. You think that they are just mindless robots buying everything and anything. YOU and your western mind would do this and actually do this. Chinese people think EVERYTHING through, rapidly and buy because they WANT to buy. As far as 'damage' to the environment is concerned, how many billions of ltrs of fuel is saved by people not having to go to your massive polluting malls to buy? How many of your countries have spent $80 trillion on saving their environment and have closed down 48,000 coal plants and 4,8 million factories that do not adhere to the new and very strict antipollution laws of China? How many of your countries have planted 730 million trees to RE-forest deserts and areas that they have turned into green oasis's to clean the air? How many of your countries have made it LAW that by 2025 ALL public transport on most major cities will me electric?? How many of your countries have, like the hypocritical/criminal regime of USA opened up and spent millions on NEW coal mines and fracking?? WHAT HAVE YOUR COUNTRIES DONE TO CUT EMISSIONS AND FORCE ELECTRIC CARS ONTO THE ROADS INSTEAD OF HAMPERING IT AS THE USA HAS DONE FOR DECADES. You USA, what are you doing about the millions of tons of nuclear waste you have stockpiled in and crumbling dumps all over the USA that is now leaking and alarming rates and which your trump has cut the maintenance budget of BY HALF? ETC ETC ETC ETC ETC ETC.

Here in China I have seen a girl order a single elastic hairband from Taobao. The box arrives larger than the size of two fists clenched together, a thick layer of industrial plastic bubble wrap wrapped around a tiny little hair elastic. I asked her why. 'It was only 2 yuan (25 cents), shipping 2 yuan'. For the small cost of 50 cents you have earned yourself a hairband and a small pile of plastic that will take 400+ years to break down in the natural environment. And that was one of100+ that showed up in the office that week.
This is not a joke.

Lots of comments are about comparing china vs the west or US.
Well, 2 points I have in mind:
1. It's not about who creates more wastes. it is about we are throwing more trash to the earth. SO stop saying the west did this, did that, we do this do that. Start saving the earth.

2. It is scary that one day, your whole life, your whole world is on a piece of chips (namely your phone). Because by then, your life is not your anymore. it is free because you are the product!

This video although informative is a sad glimpse into the future of humanity. People are more interested in the quick buzz of an unfulfilling purchase than human interaction. I will never be a fast fashion consumer I will never purchase without thought or meaning. I don't want to see a world where the only interaction is staring at a screen.

WeChat and Alibaba have been extremely slow to expand overseas into western markets. This is really holding them back as global brands.

Just be careful with China policy. You can't sell your stuff into their country so easily and yet they can export so easily. So Trump is right in some way

It is impressive on how much retail or customer shopping experience has changed. How does this affect the retail industry today outside of China?

I think 2 groups of people, 1 group will be haters.. who are always wanting to earn everything by themselves, other 1 group will see opportunity in this new ecosystem and grow together.

Which one will you choose to be?

网购的兴盛也促进了国内资源回收产业的发展,甚至创造了更多的相关就业,真不懂这帮外国人酸什么。论人均资源消耗,美国人是中国人的53倍,凭什么他们可以消耗这么多资源,我们用一点就要被说三道四

我们连接世界,连接未来,建立一个独立的未来互联网社交网络帝国: https://ketpro.fn.xyz/info

Consumerism is definitely over the top in China now. Traditional value such as saving has been laughed at by this new culture of purchasing.

Please Changing behavior in public first before changing shopping blah blah. And also please dont spitting at all the department store floor when you visit Korea..i saw one Chinese guy who spitting in Balenciaga store

I made it a point to read 560 comments. I would say 90% are from salty people that can't stand to admit they are getting behind.

Only at 1/3 of the video. You're amazing Angela, very entertaining presentation and great information. Thank you so much!

Do Chinese really buy what they need? Or eventually those products just go to the trash can and create more trash?

Actually when the speakers mentioned the delivery convenience had already changed the shopping mind of Chinese,I felt a little bit concerned about the future of this convenience.As we know, the current convenience is based on the low average cost of labor in China.Once our privilege lose its way ,as the consequence of our social development, the shopping would be totally different.That is something the speaker did not or mean not to talk.All the case she mentioned is about the current situation of shopping in China , which is not suitable for her title “the future of shopping “.In other wordy, this kind of shopping model might be just the baby of the current China,which can not shape the shopping world in future.

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