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ChinaRetail&E-commerceWeeklyUpdates24February–2March2017Retailingeneralp2Nielsen:Consumers'confidencelevelinChinain4Q16hit4-yearhighE-commercep2Alibabaurgestoughercounterfeitinglaws,enforcementandpenaltiesAlibababuys25.
25%equityofHaierMultimediawith656millionyuanTmalldebutsARshoppinginitshomeproductsshoppingfestivalAlipaylaunchesnewQRcodefunctionthatsupportspaymenttransferJD.
comnetrevenuereaches260.
2billionyuaninFY2016,up44%yoyJD.
comtoopen10,000homeappliancesphysicalstoresacrossChinain2017BaiduandChinaLifeInsurancesignstrategicpartnershipagreementJapaneseRakutenplanstoditchitsChinesenametodrawalinebetweenitselfandSouthKoreanLotteSFDA:OnlinefoodserviceproviderswithoutphysicalrestaurantcannotprovidecateringservicesE-commercelogisticsp4JD.
comannouncessmartsupplychainstrategiesDepartmentstoresandshoppingmallsp4Linkshop:185departmentstores,shoppingmallsandlarge-scalesupermarketsclosein2016iziRetail:2016resultsof200large-scaleretailersinChinaannounceWandateamsupwithChinaUnionPaytoprovideomni-channelexperienceChongqingDepartmentStoretoclose12storesMarksandSpencerclosestwoShanghaibranchesConsumerelectronicsp6iResearch:Offlineretailsalesbounceback;SuningscoreshighestintermsofO2OimplementationApparelp6JNBYGrouprecords1.
3billionrevenueinthefirsthalfofFY17,63.
6%generatedfromWeChatH&MpartnerswithWeChatPayandAlipayCosmeticsp6Closeto80%ofbrandsundertheworld'stopninecosmeticsandhealthcareproductgroupsopenstoresonTmallWatsonsChinastorestolaunch2-4-hourexpressdeliveryservicesTeresaLamVicePresidentE:teresalam@fung1937.
comT:(852)23002466FungBusinessIntelligence10/FLiFungTower888CheungShaWanRoadKowloon,HongKongT:(852)23002470F:(852)26351598E:fbicgroup@fung1937.
comAsiaDistribution&Retail24Feb2017–2Mar2017|2ChinaRetail&E-commerceWeeklyUpdatesNielsen:Consumers'confidencelevelinChinain4Q16hit4-yearhighAccordingtotheNielsenGlobalSurveyofConsumerConfidenceandSpendingIntentionsfor4Q16,theconsumerconfidencelevelinChinawas108,upsignificantlyfrom106inthepreviousquarter.
Itwasthehighestlevelrecordedinthelastfouryears.
Theboostinconsumerconfidencewasaresultofthepositiveemploymentoutlookperceivedbythesurveyedrespondents.
Statisticsfrom2016showedthatdemandforhighqualityproductsareincreasing.
Meanwhile,thereportalsopointedoutthatfreshproducewasthefastestgrowingproductcategoryinonlineretailingin20161.
Alibabaurgestoughercounterfeitinglaws,enforcementandpenaltiesAlibabaGroupcalledfortougherlaws,stricterenforcementandstifferpenaltiestocrackdownonpurveyorsofcounterfeitgoodsinChina.
AlibabasaidinapublicappealthatChina'sambiguouscounterfeitinglawshavehamperedauthorities'abilitytobuildlegalcasesagainstcounterfeiters,resultinginalessthan1%convictionraterelatedtocounterfeitingcasesreportedbyAlibaba'splatform.
Alibabasaidthatcriminalsshouldnotbeabletoescapelegalconsequenceifthesocietywantstoefficientlycombatcounterfeiting2.
Alibababuys25.
25%equityofHaierMultimediawith656millionyuanQingdaoHaierMultimediaCo.
announceditsequitytransferandcapitalboostplans,inwhichthetransfereesinvolvedwereAlibabaGroupandQingdaoHaierCo.
HaierElectronics,thecurrentshareholderofHaierMultimediaCo.
,willtransfer88,755,981yuanworthofregisteredcapitalofHaierMultimediatoQingdaoHaierandAlibaba.
Also,thetwocompanieswillfinanceanincreaseof123,947,369yuaninQingdaoMultimedia'sregisteredcapital.
Afterthetransactioniscompleted,HaierElectronicswillremainHaierMultimedia'smajorshareholderwith50.
51%ofshares,whileAlibabaandQingdaoHaierwillhold25.
25%and20.
2%ofthecompanyrespectively.
Accordingtotheannouncement,Alibabawillinvest656millionyuaninthetransaction.
AlibabaandHaierwillworktogetherinthedevelopmentofsmarttelevisionsetsandotherrelatedbusinessareas3.
TmalldebutsARshoppinginitshomeproductsshoppingfestivalTmalldebuteditsproprietaryARshoppingtechnology"AR-GO"initshomeproductsshoppingfestival.
Byusing"AR-GO",consumerscanviewthe3DmodeloftheproductrecreatedinARmodeinapproximateproportionthroughusers'phonecamera,thusimprovingshoppingexperience.
Afterthehomeproductsshoppingfestivalends,"AR-GO"willcontinuetobeadoptedonTmallandwillbegraduallyappliedinotherproductcategories.
GoodsthatsupportARviewingfeaturewillbeindicatedbyaspecificicon4.
24Feb2017–2Mar2017|3ChinaRetail&E-commerceWeeklyUpdatesAlipaylaunchesnewQRcodefunctionthatsupportspaymenttransferAlipaylauncheditsnewQRcodefunctionforuserstoreceivepaymenttransfer.
Priortotheofficiallaunch,Alipayreceivedadailyaverageofcloseto200,000userapplicationstoparticipateinthetwo-weekbetatestingofthenewfunction.
ThecompanyhopedthatChinacanbecomeacashlesssocietyinfiveyears'timeanditbelievedthisnewQRcodefunctionwillbeaninitialsteptowardsachievingtheendgoal.
Meanwhile,non-AlipayuserscanalsoaccessthefundtransferfunctionbyenteringtherelevantinformationafterscanningtheuniqueAlipayQRcodeofthefundrecipient5.
JD.
comnetrevenuereaches260.
2billionyuaninFY2016,up44%yoyOn2March,JD.
comannounceditsunauditedfinancialresultsforFY2016endedDecember31,2016.
Belowaresomekeyhighlightsofthefinancialresults:NetrevenueforFY2016reached260.
2billionyuan,up44%yoy.
Revenuefromservicesandothersincreasedby66%in2016.
Grossprofitforthefullyearof2016was39.
5billionyuan,whilenon-GAAPgrossprofitwas38.
6billionyuan,anincreaseof62%yoy.
LossfromoperationsforFY2016was2.
1billionyuan;non-GAAPincomefromoperationswasRMB1.
0billion,up0.
6%yoy.
GMVforFY2016wasRMB658.
2billion,anincreaseof47%yoy.
No.
ofannualactivecustomeramountedto226.
6millioninthetwelvemonthsendedDecember31,2016,up46%yoyfrom2015,excludinguniquecustomersfromPaipai.
com.
FulfilledordersexcludingvirtualitemsforFY2016were1.
6billion,anincreaseof55%yoy.
Fulfilledordersplacedthroughmobiledevicesaccountedfor78.
3%oftotalordersfulfilledinFY2016,anincreaseofmorethan110%comparedtothepreviousyear6.
JD.
comtoopen10,000homeappliancesphysicalstoresacrossChinain2017JD.
complanstoexpanditsofflinepresencebyopening10,000homeappliancephysicalstoresacrossChinathisyeartosupportitsgoaltoexpanditspresenceintier3andtier4cities.
Third-partypartnersareinvitedtoenterintofranchiseagreementtosetupofflineexperientialstorewithJD.
com.
JD.
comsaiditwillprovidesupporttoitsfranchiseesinareassuchasstockprocurement,marketing,logisticsandproductinstallation.
Asoftheendof2016,JD.
comhasopenedmorethan1,700servicestoresinruralareas,coveringaround450,000villagesintotal7.
BaiduandChinaLifeInsurancesignstrategicpartnershipagreementBaiduGroupandChinaLifeInsurance(Group)Companyenteredintoastrategicpartnership.
ThetwocompanieswillreportedlyworktogetherinexploringtechnologiessuchasAI,BigData,CloudComputing,andInternetofVehicles.
Keybusinesscollaborationsbetweenthetwowillbecarriedoutinareassuchasonlinefinancialplatform,brandingandmarketing,investmentandfinance,insurance,banking,andcorporateannuity,aswellaspersonneltrainingandideasexchange8.
24Feb2017–2Mar2017|4ChinaRetail&E-commerceWeeklyUpdatesJapaneseRakutenplanstoditchitsChinesenametodrawalinebetweenitselfandSouthKoreanLotteJapaneseonlineretailplatformRakutenannouncedonitsofficialWeiboaccountthatthecompanyshouldnotbeconfusedwithSouthKoreanretailerLotteGroup,whichisadifferentcompanybutholdsthesameChinesename.
Accordingtomediareports,RakutenplanstostopusingitsChinesenameandwilloperateinChinainitsEnglishnameRakuten,soastodifferentiateitselffromtheSouthKoreanretailer9.
SFDA:OnlinefoodserviceproviderswithoutphysicalrestaurantcannotprovidecateringservicesTheStateFoodandDrugAdministration(SFDA)saidthatfoodserviceprovidersmustpayattentiontofouroperationareastomaintainthequalityandsafetyofcateringservices:firstly,thesourceoffoodingredientsneedtobeverified;secondly,caterersneedtofollowstrictlytheregulationsgoverningfoodoperations;thirdly,restaurantsshouldbeabletoshowcasethesanitaryprocessaswellasthefoodpreparationprocess;lastly,restaurantsneedtoberesponsiblefortheappropriatedisposalorreuseofkitchenwasteandconsumersmustbeprotectedfromharmfulfoodingredientssuchasgutteroil.
TheofficialfromSFDAalsorestatedtherequirementforonlinefoodservicesproviders.
Theymusthavealicensedphysicalrestaurantinordertoprovideonlinefoodservices.
Theyshouldmakesurethequalityoftheirfoodonlineandofflinearethesame10.
JD.
comannouncessmartsupplychainstrategiesLiuQiangdong,founderofJD.
com,talkedabouttheconceptof"SmartCommercialSupplyChain"inapressconference.
Theconceptaimstoincorporateconsumerinsights,bigdataanalytics,artificialintelligence,aswellaspastretailexperienceofJD.
comtocreateagile,smart,andopensupplychainsforJD.
com'sretailpartners.
JD.
comestimatedthatbytheendof2017,80%ofinventoryreplenishmentwillbedonethroughalgorithmsand80%ofpriceadjustment(asidefromnon-standardpriceadjustmentsuchassalesevent)willbeautomated.
JD.
comsaidthatbyendof2017,100companieswillbeconnectedtoJD.
com'ssmartsupplychainsystemtoimprovetheiroperationefficiency11.
Linkshop:185departmentstores,shoppingmallsandlarge-scalesupermarketsclosein2016AccordingtotheasurveybyLinkshop,185departmentstores,shoppingmallsandlarge-scalesupermarketswereclosedin2016,involving46companies.
Byretailformat,thestoreclosuretotalincluded56departmentstoresandshoppingmalls,aswellas129large-scalesupermarkets.
Storeclosureis24Feb2017–2Mar2017|5ChinaRetail&E-commerceWeeklyUpdateshappeningcrosstheentireretailindustry.
Majorplayers,suchasPacificDepartmentStore,MarksandSpencer,Wal-martChina,CRVanguardandRT-Mart,alsoappearedonthestoreclosurelist.
Over80%ofthestoreclosureswereintier1andtier2cities,butthephenomenonwasalsograduallyspreadingtotier3andtier4cities12.
iziRetail:2016resultsof200large-scaleretailersinChinaannouncediziRetail,amarketresearchcompanyinChina,carriedoutasurveyonkeylarge-scaleretailersinChinaandstudiedtheirrespectivebusinessperformance.
Thestudycovered200large-scaleretailersin54citiesinChina,whichincluded109departmentstores,78shoppingmalls,12outlets,aswellasoneduty-freestore.
Thesurveylookedatthe2016salesofthesampledlarge-scaleretailerswhichhavebeenopenedfortwoyearsorabove,andfoundthatthetotalsalesofthesampledretailersincreasedby4%yoy.
Byretailformats,departmentstores,shoppingmallsandoutletsrecordeda1.
5%yoydrop,10%yoyincrease,and7.
3%yoyincreaseintotalsalesrespectivelyin2016.
Intheperiod,16largescaleretailersrecordedover10%ofloss;allofthemweredepartmentstores13.
WandateamsupwithChinaUnionPaytoprovideomni-channelexperienceOn2March,Wandaannouncedanomni-channelstrategicpartnershipwithUnionPayinBeijing.
Thetwoenterpriseswillworktogethertoprovideomni-channelexperienceforcustomersbysettinguplifestyle-basedscenarios,andtohelpphysicalstorestorevampandtransform.
Atthesametime,UnionPayQuickPasswillbeintroducedto187WandaPlazas,51departmentstores,102hotels,fivethemeparksandmillionsofWandapartnermerchants14.
ChongqingDepartmentStoretoclose12storesChongqingDepartmentStoreannouncedthatitwillclose12stores.
Thedepartmentstoreoperatorclosedatotalof16storesin2016.
Also,inthecontextofomni-channelbeingthedevelopmenttrendfortheindustry,e-commercebeingstronglysupportedandencouragedbythegovernment,ande-commercemarketcontinuedtogrowinsize,thecompanywillinvestaround700millionyuantobuildanomni-channelsalesplatform,includinganonlineplatformthatsellsproducts,thecompany'sphysicalstores,logisticsnetworkandsupplychainresources15.
MarksandSpencerclosestwoShanghaibranchesU.
K.
departmentstoreMarksandSpencerhasbeensufferingfromcontinuedlossesinitsChinabusiness.
On26February,itclosedtwoofitsphysicalstoresinShanghai–theWandabranchandtheSkymallbranch.
MarksandSpencer'se-commerceoperationsinChinawillcontinue.
Previously,MarksandSpencerhasopenedfouronlinestoresonTmallandJD.
com,includingtheTmallofficialflagshipstore,theTmallmskidswearflagshipstore,theTmallimportedfoodstore,andtheJD.
comimportedgrapewineflagshipstore.
InNovember2016,MarksandSpencerannounceditsplantocloseallofitstenphysicalstoresinChina.
Currently,eightstoresarestillinoperation16.
24Feb2017–2Mar2017|6ChinaRetail&E-commerceWeeklyUpdatesiResearch:Offlineretailsalesbounceback;SuningscoreshighestintermsofO2OimplementationiResearchpublishedthe"ReportonSpendingTrendsonHomeElectronicAppliancesin2017",whichpointedoutthatinthelasttwoyearsthegrowthofonlinespendingofChina'shomeelectronicmarkethassloweddownwhileofflinesalesrecovered.
Thereportsaidthatthemarkethasentereda"plateau"phasewithfeaturessuchassalesoftraditionalhomeelectronicappliancesstalled,consumerdemographicsinChinachanged,aswellasO2Oemergedasagrowingretailtrendthatcouldappealtoyoungconsumers.
Accordingtothesurveyofthereportonretailers'performanceintermsofbranding,channeldevelopmentandinformationtechnology,Suning.
comcametopwiththehighestcomprehensivescores,suggestingthatithasthebestO2OimplementationmodelamongvariousretailersinChina17.
JNBYGrouprecords1.
3billionrevenueinthefirsthalfofFY17,63.
6%generatedfromWeChatJNBYGroupannouncedinterimresultsforthesixmonthsended31December2016.
Revenuefortheperiodamountedto1.
31billionyuan,upby22.
4%yoy.
Samestoresalesgrowthreached11.
3%forthefirsthalfofFY17.
RetailssalescontributedbyitsWeChatmembersaccountedfor63.
6%ofthetotal.
Asof31December2016,JNBYGrouphadover1.
6millionmembers,1.
1millionofwhichwerefromWeChatandthenumberofactiveuserswasover230,000.
AsaresultoftheincreasedsalesinitsvariousproductlinessuchasCROQUIS,jnbybyJNBY,and'less',profitattributabletoshareholdersofthecompanyintheperiodincreased24%yoyto227millionyuan.
JNBYGrouphas1,498retailstoresglobally.
Over60%ofretailstoresunderJNBY'sbrandsareself-operated18.
H&MpartnerswithWeChatPayandAlipayH&MannounceditsplantopartnerwithWeChatPayandAlipaytoacceptmobilepaymentinitsChinastores.
Thefirstbatchof85H&MstoreshavealreadystartedacceptingWeChatPayandAlipaysince27Jan2017.
ByMarch,allH&MstoresinChinawillacceptmobilepayment.
H&MalsoplanstocollaboratewithWeChatandAlipayinfuturemarketingcampaign.
H&MsaidthatthepartnershipswillhelpthebrandstrengthenitsinteractionwithChinesecustomers19.
Closeto80%ofbrandsunderthetopninecosmeticsandhealthcareproductgroupsintheworldopenstoresonTmallIntheannualTmallBeautyAwardsCeremony,anumberofcosmeticsbrands,includingEstéeLauder'sM.
A.
C,L'Oréal'sKiehl's,LVMH'sFresh,AmorePacific'sHera,SHISEIDO'sELIXIR,andtheKoreanhitJayjunsignedpartnershipagreementwithTmalltoopenflagshipstoresontheplatform.
AsofFebruary2017,over3,000cosmeticsbrandsfromaroundtheworldhasenteredtheTmallplatform,includingover70high-end24Feb2017–2Mar2017|7ChinaRetail&E-commerceWeeklyUpdatesbrands;around80%ofthebrandsareunderthetopninecosmeticsandhealthcareproductgroupsintheworld,namelyLVMH,EstéeLauder,L'Oréal,P&G,SHISEIDO,AmorePacific,LGHousehold&HealthcareandUnilever20.
WatsonsChinastorestolaunch2-4-hourexpressdeliveryservicesWatsonsChinaistolaunchanexpressdeliveryservicethatcoulddeliverordersin2-4hours.
AfteranorderisplacedinWatsons'Tmallflagshipstore,thephysicalretailstoreclosesttothecustomer'slocationwilldelivertheproductstothecustomer.
Also,WatsonsChinaplanstodisplaythetrendingsalesitemslistofitsTmallstoreTmallBeauty(mei.
tmall.
com)initsphysicalstore21.
References1"Nielsen:Consumers'confidencelevelinChinain4Q16hit4-yearhigh",23February2017,gov.
cnhttp://www.
gov.
cn/xinwen/2017-02/23/content_5170307.
htm(inChineseonly)2"Alibabaurgestoughercounterfeitinglaws,enforcementandpenalties",27February2017,ebrunhttp://www.
ebrun.
com/20170227/217223.
shtml(inChineseonly)20February2017,Linkshophttp://www.
linkshop.
com.
cn/web/archives/2017/370911.
shtml(inChineseonly)3"Alibababuys25.
25%equityofHaierMultimediawith656millionyuan",27February2017,Linkshophttp://www.
linkshop.
com.
cn/web/archives/2017/371534.
shtml(inChineseonly)4"TmalldebutsARshoppinginitshomeproductsshoppingfestival",28February2017,ebrunhttp://www.
ebrun.
com/20170228/219100.
shtml(inChineseonly)5"AlipaylaunchesnewQRcodefunctionthatsupportspaymenttransfer",1March2017,news.
xinhuanet.
comhttp://news.
xinhuanet.
com/tech/2017-03/01/c_1120546440.
htm(inChineseonly)6"JD.
comnetrevenuereaches260.
2billionyuaninFY2016,up44%yoy",Officialpressrelease,2March2017,JD.
comhttp://ir.
jd.
com/phoenix.
zhtmlc=253315&p=irol-newsArticle&ID=22509237"JD.
comtoopen10,000homeappliancesphysicalstoresacrossChinain2017",1March2017,ebrunhttp://www.
ebrun.
com/20170301/219344.
shtml(inChineseonly)8"BaiduandChinaLifesignstrategicpartnershipagreement",27February2017,ebrunhttp://www.
ebrun.
com/20170227/217296.
shtml(inChineseonly)9"JapaneseRakutenplanstoditchitsChinesenametodrawalinebetweenitselfandSouthKoreanLotte",2March2017,ebrunhttp://www.
ebrun.
com/20170302/219370.
shtml(inChineseonly)10"SFDA:Onlinefoodserviceproviderswithoutphysicalrestaurantcannotprovidecateringservices",27February2017,Linkshophttp://www.
linkshop.
com.
cn/web/archives/2017/371477.
shtml(inChineseonly)11"JD.
comannouncessmartsupplychainstrategies",2March2017,Linkshophttp://www.
linkshop.
com.
cn/web/archives/2017/371783.
shtml(inChineseonly)12"Linkshop:185departmentstores,shoppingmallsandlarge-scalesupermarketsclosein2016",23February2017,Linkshophttp://www.
linkshop.
com.
cn/web/archives/2017/371265.
shtml(inChineseonly)13"2016resultsof200large-scaleretailersinChinaannounced",1March2017,Linkshophttp://www.
linkshop.
com.
cn/web/archives/2017/371674.
shtml(inChineseonly)14"ChinapropertygiantWandapartnerswithUnionPaytoexpandmobilepaymentscheme",2March2017,SCMP.
comhttp://www.
scmp.
com/business/companies/article/2075510/china-property-giant-wanda-partners-unionpay-expand-mobilefrom=groupmessage&isappinstalled=015"ChongqingDepartmentStoretoclose12stores",2March2017,Linkshophttp://www.
linkshop.
com.
cn/web/archives/2017/371754.
shtml(inChineseonly)16"MarksandSpencerclosestwoShanghaibranches",27February2017,ebrunhttp://www.
ebrun.
com/20170227/217261.
shtml(inChineseonly)17"iResearch:Offlineretailsalesbounceback;SuningscoreshighestintermsofO2Oimplementation",27February2017,news.
xinhuanet.
comhttp://news.
xinhuanet.
com/tech/2017-02/27/c_1120538119.
htm(inChineseonly)18"JNBYGrouprecords1.
3billionrevenueinthefirsthalfofFY17,63.
6%generatedfromWeChat",24February2017,ebrunhttp://www.
ebrun.
com/20170224/216930.
shtml(inChineseonly)19"H&MpartnerswithWeChatPayandAlipay",27February2017,news.
winshang.
comhttp://news.
winshang.
com/html/060/8092.
html(inChineseonly)20"Closeto80%ofbrandsunderthetopninecosmeticsandhealthcareproductgroupsintheworldopenstoresonTmall",1March2017,news.
ladymax.
cnhttp://news.
ladymax.
cn/201703/01-32043.
html(inChineseonly)21"WatsonsChinastorestolaunch2-4-hourexpressdeliveryservices",1March2017,news.
zgswcn.
comhttp://news.
zgswcn.
com/2017/0301/765663.
shtml(inChineseonly)
25%equityofHaierMultimediawith656millionyuanTmalldebutsARshoppinginitshomeproductsshoppingfestivalAlipaylaunchesnewQRcodefunctionthatsupportspaymenttransferJD.
comnetrevenuereaches260.
2billionyuaninFY2016,up44%yoyJD.
comtoopen10,000homeappliancesphysicalstoresacrossChinain2017BaiduandChinaLifeInsurancesignstrategicpartnershipagreementJapaneseRakutenplanstoditchitsChinesenametodrawalinebetweenitselfandSouthKoreanLotteSFDA:OnlinefoodserviceproviderswithoutphysicalrestaurantcannotprovidecateringservicesE-commercelogisticsp4JD.
comannouncessmartsupplychainstrategiesDepartmentstoresandshoppingmallsp4Linkshop:185departmentstores,shoppingmallsandlarge-scalesupermarketsclosein2016iziRetail:2016resultsof200large-scaleretailersinChinaannounceWandateamsupwithChinaUnionPaytoprovideomni-channelexperienceChongqingDepartmentStoretoclose12storesMarksandSpencerclosestwoShanghaibranchesConsumerelectronicsp6iResearch:Offlineretailsalesbounceback;SuningscoreshighestintermsofO2OimplementationApparelp6JNBYGrouprecords1.
3billionrevenueinthefirsthalfofFY17,63.
6%generatedfromWeChatH&MpartnerswithWeChatPayandAlipayCosmeticsp6Closeto80%ofbrandsundertheworld'stopninecosmeticsandhealthcareproductgroupsopenstoresonTmallWatsonsChinastorestolaunch2-4-hourexpressdeliveryservicesTeresaLamVicePresidentE:teresalam@fung1937.
comT:(852)23002466FungBusinessIntelligence10/FLiFungTower888CheungShaWanRoadKowloon,HongKongT:(852)23002470F:(852)26351598E:fbicgroup@fung1937.
comAsiaDistribution&Retail24Feb2017–2Mar2017|2ChinaRetail&E-commerceWeeklyUpdatesNielsen:Consumers'confidencelevelinChinain4Q16hit4-yearhighAccordingtotheNielsenGlobalSurveyofConsumerConfidenceandSpendingIntentionsfor4Q16,theconsumerconfidencelevelinChinawas108,upsignificantlyfrom106inthepreviousquarter.
Itwasthehighestlevelrecordedinthelastfouryears.
Theboostinconsumerconfidencewasaresultofthepositiveemploymentoutlookperceivedbythesurveyedrespondents.
Statisticsfrom2016showedthatdemandforhighqualityproductsareincreasing.
Meanwhile,thereportalsopointedoutthatfreshproducewasthefastestgrowingproductcategoryinonlineretailingin20161.
Alibabaurgestoughercounterfeitinglaws,enforcementandpenaltiesAlibabaGroupcalledfortougherlaws,stricterenforcementandstifferpenaltiestocrackdownonpurveyorsofcounterfeitgoodsinChina.
AlibabasaidinapublicappealthatChina'sambiguouscounterfeitinglawshavehamperedauthorities'abilitytobuildlegalcasesagainstcounterfeiters,resultinginalessthan1%convictionraterelatedtocounterfeitingcasesreportedbyAlibaba'splatform.
Alibabasaidthatcriminalsshouldnotbeabletoescapelegalconsequenceifthesocietywantstoefficientlycombatcounterfeiting2.
Alibababuys25.
25%equityofHaierMultimediawith656millionyuanQingdaoHaierMultimediaCo.
announceditsequitytransferandcapitalboostplans,inwhichthetransfereesinvolvedwereAlibabaGroupandQingdaoHaierCo.
HaierElectronics,thecurrentshareholderofHaierMultimediaCo.
,willtransfer88,755,981yuanworthofregisteredcapitalofHaierMultimediatoQingdaoHaierandAlibaba.
Also,thetwocompanieswillfinanceanincreaseof123,947,369yuaninQingdaoMultimedia'sregisteredcapital.
Afterthetransactioniscompleted,HaierElectronicswillremainHaierMultimedia'smajorshareholderwith50.
51%ofshares,whileAlibabaandQingdaoHaierwillhold25.
25%and20.
2%ofthecompanyrespectively.
Accordingtotheannouncement,Alibabawillinvest656millionyuaninthetransaction.
AlibabaandHaierwillworktogetherinthedevelopmentofsmarttelevisionsetsandotherrelatedbusinessareas3.
TmalldebutsARshoppinginitshomeproductsshoppingfestivalTmalldebuteditsproprietaryARshoppingtechnology"AR-GO"initshomeproductsshoppingfestival.
Byusing"AR-GO",consumerscanviewthe3DmodeloftheproductrecreatedinARmodeinapproximateproportionthroughusers'phonecamera,thusimprovingshoppingexperience.
Afterthehomeproductsshoppingfestivalends,"AR-GO"willcontinuetobeadoptedonTmallandwillbegraduallyappliedinotherproductcategories.
GoodsthatsupportARviewingfeaturewillbeindicatedbyaspecificicon4.
24Feb2017–2Mar2017|3ChinaRetail&E-commerceWeeklyUpdatesAlipaylaunchesnewQRcodefunctionthatsupportspaymenttransferAlipaylauncheditsnewQRcodefunctionforuserstoreceivepaymenttransfer.
Priortotheofficiallaunch,Alipayreceivedadailyaverageofcloseto200,000userapplicationstoparticipateinthetwo-weekbetatestingofthenewfunction.
ThecompanyhopedthatChinacanbecomeacashlesssocietyinfiveyears'timeanditbelievedthisnewQRcodefunctionwillbeaninitialsteptowardsachievingtheendgoal.
Meanwhile,non-AlipayuserscanalsoaccessthefundtransferfunctionbyenteringtherelevantinformationafterscanningtheuniqueAlipayQRcodeofthefundrecipient5.
JD.
comnetrevenuereaches260.
2billionyuaninFY2016,up44%yoyOn2March,JD.
comannounceditsunauditedfinancialresultsforFY2016endedDecember31,2016.
Belowaresomekeyhighlightsofthefinancialresults:NetrevenueforFY2016reached260.
2billionyuan,up44%yoy.
Revenuefromservicesandothersincreasedby66%in2016.
Grossprofitforthefullyearof2016was39.
5billionyuan,whilenon-GAAPgrossprofitwas38.
6billionyuan,anincreaseof62%yoy.
LossfromoperationsforFY2016was2.
1billionyuan;non-GAAPincomefromoperationswasRMB1.
0billion,up0.
6%yoy.
GMVforFY2016wasRMB658.
2billion,anincreaseof47%yoy.
No.
ofannualactivecustomeramountedto226.
6millioninthetwelvemonthsendedDecember31,2016,up46%yoyfrom2015,excludinguniquecustomersfromPaipai.
com.
FulfilledordersexcludingvirtualitemsforFY2016were1.
6billion,anincreaseof55%yoy.
Fulfilledordersplacedthroughmobiledevicesaccountedfor78.
3%oftotalordersfulfilledinFY2016,anincreaseofmorethan110%comparedtothepreviousyear6.
JD.
comtoopen10,000homeappliancesphysicalstoresacrossChinain2017JD.
complanstoexpanditsofflinepresencebyopening10,000homeappliancephysicalstoresacrossChinathisyeartosupportitsgoaltoexpanditspresenceintier3andtier4cities.
Third-partypartnersareinvitedtoenterintofranchiseagreementtosetupofflineexperientialstorewithJD.
com.
JD.
comsaiditwillprovidesupporttoitsfranchiseesinareassuchasstockprocurement,marketing,logisticsandproductinstallation.
Asoftheendof2016,JD.
comhasopenedmorethan1,700servicestoresinruralareas,coveringaround450,000villagesintotal7.
BaiduandChinaLifeInsurancesignstrategicpartnershipagreementBaiduGroupandChinaLifeInsurance(Group)Companyenteredintoastrategicpartnership.
ThetwocompanieswillreportedlyworktogetherinexploringtechnologiessuchasAI,BigData,CloudComputing,andInternetofVehicles.
Keybusinesscollaborationsbetweenthetwowillbecarriedoutinareassuchasonlinefinancialplatform,brandingandmarketing,investmentandfinance,insurance,banking,andcorporateannuity,aswellaspersonneltrainingandideasexchange8.
24Feb2017–2Mar2017|4ChinaRetail&E-commerceWeeklyUpdatesJapaneseRakutenplanstoditchitsChinesenametodrawalinebetweenitselfandSouthKoreanLotteJapaneseonlineretailplatformRakutenannouncedonitsofficialWeiboaccountthatthecompanyshouldnotbeconfusedwithSouthKoreanretailerLotteGroup,whichisadifferentcompanybutholdsthesameChinesename.
Accordingtomediareports,RakutenplanstostopusingitsChinesenameandwilloperateinChinainitsEnglishnameRakuten,soastodifferentiateitselffromtheSouthKoreanretailer9.
SFDA:OnlinefoodserviceproviderswithoutphysicalrestaurantcannotprovidecateringservicesTheStateFoodandDrugAdministration(SFDA)saidthatfoodserviceprovidersmustpayattentiontofouroperationareastomaintainthequalityandsafetyofcateringservices:firstly,thesourceoffoodingredientsneedtobeverified;secondly,caterersneedtofollowstrictlytheregulationsgoverningfoodoperations;thirdly,restaurantsshouldbeabletoshowcasethesanitaryprocessaswellasthefoodpreparationprocess;lastly,restaurantsneedtoberesponsiblefortheappropriatedisposalorreuseofkitchenwasteandconsumersmustbeprotectedfromharmfulfoodingredientssuchasgutteroil.
TheofficialfromSFDAalsorestatedtherequirementforonlinefoodservicesproviders.
Theymusthavealicensedphysicalrestaurantinordertoprovideonlinefoodservices.
Theyshouldmakesurethequalityoftheirfoodonlineandofflinearethesame10.
JD.
comannouncessmartsupplychainstrategiesLiuQiangdong,founderofJD.
com,talkedabouttheconceptof"SmartCommercialSupplyChain"inapressconference.
Theconceptaimstoincorporateconsumerinsights,bigdataanalytics,artificialintelligence,aswellaspastretailexperienceofJD.
comtocreateagile,smart,andopensupplychainsforJD.
com'sretailpartners.
JD.
comestimatedthatbytheendof2017,80%ofinventoryreplenishmentwillbedonethroughalgorithmsand80%ofpriceadjustment(asidefromnon-standardpriceadjustmentsuchassalesevent)willbeautomated.
JD.
comsaidthatbyendof2017,100companieswillbeconnectedtoJD.
com'ssmartsupplychainsystemtoimprovetheiroperationefficiency11.
Linkshop:185departmentstores,shoppingmallsandlarge-scalesupermarketsclosein2016AccordingtotheasurveybyLinkshop,185departmentstores,shoppingmallsandlarge-scalesupermarketswereclosedin2016,involving46companies.
Byretailformat,thestoreclosuretotalincluded56departmentstoresandshoppingmalls,aswellas129large-scalesupermarkets.
Storeclosureis24Feb2017–2Mar2017|5ChinaRetail&E-commerceWeeklyUpdateshappeningcrosstheentireretailindustry.
Majorplayers,suchasPacificDepartmentStore,MarksandSpencer,Wal-martChina,CRVanguardandRT-Mart,alsoappearedonthestoreclosurelist.
Over80%ofthestoreclosureswereintier1andtier2cities,butthephenomenonwasalsograduallyspreadingtotier3andtier4cities12.
iziRetail:2016resultsof200large-scaleretailersinChinaannouncediziRetail,amarketresearchcompanyinChina,carriedoutasurveyonkeylarge-scaleretailersinChinaandstudiedtheirrespectivebusinessperformance.
Thestudycovered200large-scaleretailersin54citiesinChina,whichincluded109departmentstores,78shoppingmalls,12outlets,aswellasoneduty-freestore.
Thesurveylookedatthe2016salesofthesampledlarge-scaleretailerswhichhavebeenopenedfortwoyearsorabove,andfoundthatthetotalsalesofthesampledretailersincreasedby4%yoy.
Byretailformats,departmentstores,shoppingmallsandoutletsrecordeda1.
5%yoydrop,10%yoyincrease,and7.
3%yoyincreaseintotalsalesrespectivelyin2016.
Intheperiod,16largescaleretailersrecordedover10%ofloss;allofthemweredepartmentstores13.
WandateamsupwithChinaUnionPaytoprovideomni-channelexperienceOn2March,Wandaannouncedanomni-channelstrategicpartnershipwithUnionPayinBeijing.
Thetwoenterpriseswillworktogethertoprovideomni-channelexperienceforcustomersbysettinguplifestyle-basedscenarios,andtohelpphysicalstorestorevampandtransform.
Atthesametime,UnionPayQuickPasswillbeintroducedto187WandaPlazas,51departmentstores,102hotels,fivethemeparksandmillionsofWandapartnermerchants14.
ChongqingDepartmentStoretoclose12storesChongqingDepartmentStoreannouncedthatitwillclose12stores.
Thedepartmentstoreoperatorclosedatotalof16storesin2016.
Also,inthecontextofomni-channelbeingthedevelopmenttrendfortheindustry,e-commercebeingstronglysupportedandencouragedbythegovernment,ande-commercemarketcontinuedtogrowinsize,thecompanywillinvestaround700millionyuantobuildanomni-channelsalesplatform,includinganonlineplatformthatsellsproducts,thecompany'sphysicalstores,logisticsnetworkandsupplychainresources15.
MarksandSpencerclosestwoShanghaibranchesU.
K.
departmentstoreMarksandSpencerhasbeensufferingfromcontinuedlossesinitsChinabusiness.
On26February,itclosedtwoofitsphysicalstoresinShanghai–theWandabranchandtheSkymallbranch.
MarksandSpencer'se-commerceoperationsinChinawillcontinue.
Previously,MarksandSpencerhasopenedfouronlinestoresonTmallandJD.
com,includingtheTmallofficialflagshipstore,theTmallmskidswearflagshipstore,theTmallimportedfoodstore,andtheJD.
comimportedgrapewineflagshipstore.
InNovember2016,MarksandSpencerannounceditsplantocloseallofitstenphysicalstoresinChina.
Currently,eightstoresarestillinoperation16.
24Feb2017–2Mar2017|6ChinaRetail&E-commerceWeeklyUpdatesiResearch:Offlineretailsalesbounceback;SuningscoreshighestintermsofO2OimplementationiResearchpublishedthe"ReportonSpendingTrendsonHomeElectronicAppliancesin2017",whichpointedoutthatinthelasttwoyearsthegrowthofonlinespendingofChina'shomeelectronicmarkethassloweddownwhileofflinesalesrecovered.
Thereportsaidthatthemarkethasentereda"plateau"phasewithfeaturessuchassalesoftraditionalhomeelectronicappliancesstalled,consumerdemographicsinChinachanged,aswellasO2Oemergedasagrowingretailtrendthatcouldappealtoyoungconsumers.
Accordingtothesurveyofthereportonretailers'performanceintermsofbranding,channeldevelopmentandinformationtechnology,Suning.
comcametopwiththehighestcomprehensivescores,suggestingthatithasthebestO2OimplementationmodelamongvariousretailersinChina17.
JNBYGrouprecords1.
3billionrevenueinthefirsthalfofFY17,63.
6%generatedfromWeChatJNBYGroupannouncedinterimresultsforthesixmonthsended31December2016.
Revenuefortheperiodamountedto1.
31billionyuan,upby22.
4%yoy.
Samestoresalesgrowthreached11.
3%forthefirsthalfofFY17.
RetailssalescontributedbyitsWeChatmembersaccountedfor63.
6%ofthetotal.
Asof31December2016,JNBYGrouphadover1.
6millionmembers,1.
1millionofwhichwerefromWeChatandthenumberofactiveuserswasover230,000.
AsaresultoftheincreasedsalesinitsvariousproductlinessuchasCROQUIS,jnbybyJNBY,and'less',profitattributabletoshareholdersofthecompanyintheperiodincreased24%yoyto227millionyuan.
JNBYGrouphas1,498retailstoresglobally.
Over60%ofretailstoresunderJNBY'sbrandsareself-operated18.
H&MpartnerswithWeChatPayandAlipayH&MannounceditsplantopartnerwithWeChatPayandAlipaytoacceptmobilepaymentinitsChinastores.
Thefirstbatchof85H&MstoreshavealreadystartedacceptingWeChatPayandAlipaysince27Jan2017.
ByMarch,allH&MstoresinChinawillacceptmobilepayment.
H&MalsoplanstocollaboratewithWeChatandAlipayinfuturemarketingcampaign.
H&MsaidthatthepartnershipswillhelpthebrandstrengthenitsinteractionwithChinesecustomers19.
Closeto80%ofbrandsunderthetopninecosmeticsandhealthcareproductgroupsintheworldopenstoresonTmallIntheannualTmallBeautyAwardsCeremony,anumberofcosmeticsbrands,includingEstéeLauder'sM.
A.
C,L'Oréal'sKiehl's,LVMH'sFresh,AmorePacific'sHera,SHISEIDO'sELIXIR,andtheKoreanhitJayjunsignedpartnershipagreementwithTmalltoopenflagshipstoresontheplatform.
AsofFebruary2017,over3,000cosmeticsbrandsfromaroundtheworldhasenteredtheTmallplatform,includingover70high-end24Feb2017–2Mar2017|7ChinaRetail&E-commerceWeeklyUpdatesbrands;around80%ofthebrandsareunderthetopninecosmeticsandhealthcareproductgroupsintheworld,namelyLVMH,EstéeLauder,L'Oréal,P&G,SHISEIDO,AmorePacific,LGHousehold&HealthcareandUnilever20.
WatsonsChinastorestolaunch2-4-hourexpressdeliveryservicesWatsonsChinaistolaunchanexpressdeliveryservicethatcoulddeliverordersin2-4hours.
AfteranorderisplacedinWatsons'Tmallflagshipstore,thephysicalretailstoreclosesttothecustomer'slocationwilldelivertheproductstothecustomer.
Also,WatsonsChinaplanstodisplaythetrendingsalesitemslistofitsTmallstoreTmallBeauty(mei.
tmall.
com)initsphysicalstore21.
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cnhttp://www.
gov.
cn/xinwen/2017-02/23/content_5170307.
htm(inChineseonly)2"Alibabaurgestoughercounterfeitinglaws,enforcementandpenalties",27February2017,ebrunhttp://www.
ebrun.
com/20170227/217223.
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linkshop.
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cn/web/archives/2017/370911.
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25%equityofHaierMultimediawith656millionyuan",27February2017,Linkshophttp://www.
linkshop.
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cn/web/archives/2017/371534.
shtml(inChineseonly)4"TmalldebutsARshoppinginitshomeproductsshoppingfestival",28February2017,ebrunhttp://www.
ebrun.
com/20170228/219100.
shtml(inChineseonly)5"AlipaylaunchesnewQRcodefunctionthatsupportspaymenttransfer",1March2017,news.
xinhuanet.
comhttp://news.
xinhuanet.
com/tech/2017-03/01/c_1120546440.
htm(inChineseonly)6"JD.
comnetrevenuereaches260.
2billionyuaninFY2016,up44%yoy",Officialpressrelease,2March2017,JD.
comhttp://ir.
jd.
com/phoenix.
zhtmlc=253315&p=irol-newsArticle&ID=22509237"JD.
comtoopen10,000homeappliancesphysicalstoresacrossChinain2017",1March2017,ebrunhttp://www.
ebrun.
com/20170301/219344.
shtml(inChineseonly)8"BaiduandChinaLifesignstrategicpartnershipagreement",27February2017,ebrunhttp://www.
ebrun.
com/20170227/217296.
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ebrun.
com/20170302/219370.
shtml(inChineseonly)10"SFDA:Onlinefoodserviceproviderswithoutphysicalrestaurantcannotprovidecateringservices",27February2017,Linkshophttp://www.
linkshop.
com.
cn/web/archives/2017/371477.
shtml(inChineseonly)11"JD.
comannouncessmartsupplychainstrategies",2March2017,Linkshophttp://www.
linkshop.
com.
cn/web/archives/2017/371783.
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linkshop.
com.
cn/web/archives/2017/371265.
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linkshop.
com.
cn/web/archives/2017/371674.
shtml(inChineseonly)14"ChinapropertygiantWandapartnerswithUnionPaytoexpandmobilepaymentscheme",2March2017,SCMP.
comhttp://www.
scmp.
com/business/companies/article/2075510/china-property-giant-wanda-partners-unionpay-expand-mobilefrom=groupmessage&isappinstalled=015"ChongqingDepartmentStoretoclose12stores",2March2017,Linkshophttp://www.
linkshop.
com.
cn/web/archives/2017/371754.
shtml(inChineseonly)16"MarksandSpencerclosestwoShanghaibranches",27February2017,ebrunhttp://www.
ebrun.
com/20170227/217261.
shtml(inChineseonly)17"iResearch:Offlineretailsalesbounceback;SuningscoreshighestintermsofO2Oimplementation",27February2017,news.
xinhuanet.
comhttp://news.
xinhuanet.
com/tech/2017-02/27/c_1120538119.
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3billionrevenueinthefirsthalfofFY17,63.
6%generatedfromWeChat",24February2017,ebrunhttp://www.
ebrun.
com/20170224/216930.
shtml(inChineseonly)19"H&MpartnerswithWeChatPayandAlipay",27February2017,news.
winshang.
comhttp://news.
winshang.
com/html/060/8092.
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ladymax.
cnhttp://news.
ladymax.
cn/201703/01-32043.
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comhttp://news.
zgswcn.
com/2017/0301/765663.
shtml(inChineseonly)
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